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                              Lindberg Crossing Senior Living, DAB CR5930 (2021)
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Lindberg Crossing Senior Living, DAB CR5930 (2021)








  
  
    

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





Lindberg Crossing Senior Living
(CCN: 155690),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-19-836Decision No. CR5930August 19, 2021

        
              
    

      DECISION

Employees at Lindberg Crossing Senior Living (Petitioner or facility), a skilled nursing facility (SNF), failed to comply with reporting requirements for sexual abuse allegations involving a resident and an employee.  Resident B texted the facility activity director at 10:32 p.m. one evening and alleged that a facility employee performed an oral sexual act on him.  The activity director did not report Resident B's allegation of sexual abuse to the administrator until the next morning.  Further, rather than reporting the sexual abuse allegation within two hours to the Indiana State Department of Health (state agency), as required by applicable regulations, the facility administrator conducted an investigation.  The administrator fired the employee who perpetrated the sexual act and reported the incident to the police.  However, the administrator concluded the sexual contact was consensual and did not report the results of the investigation to the state agency.

The state agency eventually learned of Resident B's allegation through a complaint filed with the state agency.  Following receipt of the complaint, the state agency conducted a survey of the facility.  Based on the state agency's findings that Petitioner failed to protect Resident B from sexual abuse and to report Resident B's sexual abuse allegations, the Centers for Medicare & Medicaid Services (CMS) found that Petitioner was not in

**Page 2**

substantial compliance with the Medicare requirements for SNFs at 42 C.F.R. § 483.12(a)(1) (Tag F600) (Free From Abuse and Neglect) and 42 C.F.R. § 483.12(c)(1), (4) (Tag F609) (Reporting of Alleged Violations).  CMS further determined that Petitioner's noncompliance immediately jeopardized the health and safety of its residents.  As a result, CMS imposed a one-day civil monetary penalty (CMP) of $16,044 for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124.

Petitioner disputes that sexual abuse occurred, both because it disputes sexual contact took place between Resident B and the employee or, in the alternative, because Petitioner's sexual contact with the employee was consensual.  Petitioner also argues that CMS is basing the deficiencies in this case on the facility's policies, which are more stringent than the regulations.  Petitioner further asserts that it is not responsible for the employee's conduct because the employee was acting outside the scope of her employment when she allegedly engaged in sexual contact with Resident B.

As explained below, the record supports CMS's contention that Petitioner failed to report allegations of sexual abuse in accordance with Medicare regulations, state agency policies, and its own abuse and reporting policies.  Petitioner's various arguments and excuses do not change the clear facts in this case.  The facility activity director did not immediately report to the facility administrator an allegation from a resident that a facility employee engaged in a sexual act with the resident.  Further, after the activity director reported it to the facility administrator, the facility administrator never reported the allegation to the state agency.  Finally, although the administrator conducted an investigation into the alleged abuse, the administrator did not report the results of the investigation to the state agency.  Therefore, I conclude CMS appropriately determined that Petitioner was not in substantial compliance, at the immediate jeopardy level, with 42 C.F.R. § 483.12(c)(1) and (4).  I further conclude that a $16,044 one‐day CMP for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124, are appropriate under the statutory and regulatory factors for setting a CMP amount.

I.  Legal Framework

The Medicare program "provides basic protection against the costs of . . . related post-hospital . . . care" for individuals over the age of 65 who are eligible for Social Security retirement benefits and for individuals under 65 who meet other criteria.  42 U.S.C. § 1395c.  Post-hospital care includes extended care services provided at an SNF.  42 U.S.C. §§ 1395f(a)(2)(B), 1395x(h)-(i).

For Medicare program purposes, an SNF is an institution that is primarily engaged in providing skilled nursing care and/or rehabilitation services for its residents but is not primarily engaged in the care and treatment of mental diseases.  42 U.S.C. §§ 1395x(j),

**Page 3**

1395i-3(a)(1).  Because an SNF is a "provider of services" in the Medicare program, each SNF that participates in the program must file a provider agreement with the Secretary of Health and Human Services (Secretary).  42 U.S.C. §§ 1395cc(a), 1395x(u).  Further, a participating SNF must meet a variety of ongoing requirements related to how it provides services, maintains the rights of its residents, and administers its facility.  42 U.S.C. § 1395i-3(a)(3), (b)-(d); 42 C.F.R. pt. 483, subpt. B.1

When an SNF fails to meet a statutory or regulatory participation requirement, then the SNF has a "deficiency."  42 C.F.R. § 488.301; *see* 42 U.S.C. § 1395i-3(h)(1).  "Noncompliance" means "any deficiency that causes a facility to not be in substantial compliance."  42 C.F.R. § 488.301; *see also* 42 U.S.C. § 1395i-3(h)(3).  To maintain "substantial compliance," an SNF'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.

Broadly, noncompliance that subjects an SNF to enforcement remedies is divided into two levels.  One level is comprised of deficiencies that immediately jeopardize the health or safety of residents and the other level is composed of deficiencies that do not.  42 U.S.C. § 1395i-3(h)(1).  "Immediate jeopardy" exists when "the provider's noncompliance with one or more requirements of participation has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident."  42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct surveys to determine whether SNFs are in substantial compliance.  42 U.S.C. §§ 1395aa(a), 1395i-3(g); 42 C.F.R. § 488.10.  These surveys can be unannounced surveys that occur at least once every 15 months or can be in response to a complaint.  42 U.S.C. § 1395i-3(g).  When the results of a survey show that an SNF is not in substantial compliance with program participation requirements, the Secretary may impose enforcement remedies on the SNF.  42 U.S.C. § 1395i-3(h)(2); 42 C.F.R. § 488.406.  When CMS selects an enforcement remedy to impose on an SNF, it determines the scope (i.e., the number of residents affected or potentially affected) and severity (i.e., the degree of harm or potential harm) for each deficiency.  *See* 42 C.F.R. § 488.404(a)-(b);2
*see also* 42 U.S.C. § 1395i-3(h)(2)(B)(ii)(III)(bb).

**Page 4**

One such remedy is a CMP.  42 U.S.C. § 1395i-3(h)(2)(B)(ii).CMS may impose a per‐instance CMP for each instance of an SNF's noncompliance, or a per‐day CMP for the number of days an SNF is not in substantial compliance.  42 U.S.C. § 1395i‐3(h)(2)(A), (h)(2)(B)(ii)(I); 42 C.F.R. § 488.430(a).  For CMPs assessed on or after February 3, 2017, and for deficiencies that occurred after November 2, 2015, the CMP amounts may range as follows:  $2,140 to $21,393 for per-instance CMPs; $107 to $6,418 per day for less serious noncompliance; or $6,525 to $21,393 per day for more serious noncompliance that poses immediate jeopardy to the health and safety of residents.  45 C.F.R. § 102.3 (2019); 83 Fed. Reg. 51,369, 51,369-90 (Oct. 11, 2018); *see* 42 C.F.R. § 488.438(a)(1) (original CMP amounts before statutory inflation adjustments).

If CMS imposes a CMP based on a finding of substantial noncompliance, then the SNF may request a hearing before an administrative law judge (ALJ) to challenge CMS's initial determination of noncompliance that led to the imposition of an enforcement remedy and/or the level of noncompliance (if a successful challenge to the level would affect the range of CMP amounts imposed on the SNF).  42 U.S.C. §§ 1320a-7a(c)(2), 1395i‐3(h)(2)(B)(ii); 42 C.F.R. §§ 488.330(e)(3)(ii), 488.408(g)(1), 488.434(a)(2)(viii), 498.3(b)(13)-(14), (d)(10); *see also* 5 U.S.C. §§ 554, 556.  However, CMS's choice of remedies is not reviewable.  42 C.F.R. §§ 488.438(e)(2), 488.408(g)(2), 498.3(b)(13).

If an SNF challenges the existence of a deficiency, CMS must make a prima facie case that the SNF failed to substantially comply with federal participation requirements and, if such a showing is made, the SNF must then prove substantial compliance by a preponderance of the evidence.  *Hillman Rehab. Ctr.*, DAB No. 1611 at 8 (1997); *see* *Batavia Nursing & Convalescent Inn*, DAB No. 1911 (2004); *Batavia Nursing & Convalescent Ctr.*, DAB No. 1904 (2004), *aff'd,* *Batavia Nursing & Convalescent Ctr. v. Thompson*, 129 F. App'x 181 (6th Cir. 2005); *Emerald Oaks*, DAB No. 1800 (2001).  If an SNF challenges CMS's determination as to the level of noncompliance, CMS's determination must be upheld unless it is clearly erroneous.  42 C.F.R. § 498.60(c)(2).

If an ALJ concludes that there was a basis for imposing a CMP on an SNF, then the SNF may dispute the amount of the CMP.  The ALJ's review of the CMP amount is limited to considering the statutory and regulatory factors for setting a CMP amount.  42 C.F.R. § 488.438(e)(3); *see*42 U.S.C. §§ 1320a-7a(d), 1395i-3(h)(2)(B)(ii)(I); 42 C.F.R. § 488.438(f).  The ALJ may not reduce a CMP to zero.  42 C.F.R. § 488.438(e)(1).

Either the SNF or CMS may request Departmental Appeals Board (DAB) review of an ALJ's decision.  42 C.F.R. § 498.80.

**Page 5**

II.  Background and Procedural History

Petitioner is an SNF that operates in Anderson, Indiana.  Based on a complaint, the state agency conducted a survey of Petitioner's facility on January 24 and 25, 2019.  CMS Exs. 1, 10.  On January 24, 2019, the state agency surveyor gave Petitioner verbal notice that the survey revealed the existence of immediate jeopardy level deficiencies and that the immediate jeopardy began on January 8, 2019.  CMS Ex. 14.  On January 25, 2019, the state agency surveyor gave notice that Petitioner had abated the immediate jeopardy situation on January 25, 2019.  CMS Ex. 15.  Based on its survey, the state agency issued a Statement of Deficiencies (SOD) noting the following deficiencies:

42 C.F.R. § 483.12(a)(1) (Tag F600) (Free From Abuse and Neglect) at a scope and severity level of "J."
	42 C.F.R. § 483.12(c)(1), (4) (Tag F609) (Reporting of Alleged Violations) at a scope and severity level of "J."CMS Ex. 10.

The state agency issued a February 1, 2019 notice stating that the January 25, 2019 survey resulted in immediate jeopardy level deficiencies involving abuse and neglect (42 C.F.R. § 483.12(a)(1) (Tag F600)) and reporting alleged abuse and neglect (42 C.F.R. § 483.12(c)(1), (4) (Tag F609)).  CMS Ex. 1 at 1.  The state agency further stated that the immediate jeopardy lasted 17 days, beginning January 8, 2019, through January 24, 2019.  CMS Ex. 1 at 1.  The letter also notified Petitioner that the facility's noncompliance constituted substandard quality of care.  CMS Ex. 1 at 1.  Due to the deficiencies, the state agency imposed a denial of payment for new admissions (DPNA), effective March 3, 2019, and recommended that CMS impose a CMP.  CMS Ex. 1 at 2.

On February 12 and 13, 2019, the state agency conducted another complaint survey at Petitioner's facility and issued a SOD indicating that it found additional deficiencies related to another resident, all at scope and severity level "D" involving:  42 C.F.R. § 483.12(c)(1), (4) (Tag F609) (Reporting of Alleged Violations); 42 C.F.R. § 483.12(c)(2)‐(4) (Tag F610) (Investigate/Prevent/Correct Alleged Violation); and 42 C.F.R. § 483.15(c)(1)(i)(ii)(2)(i)‐(iii) (Tag F622) (Transfer and Discharge Requirements).  CMS Ex. 24.

On February 15, 2019, CMS issued an initial determination adopting the state agency survey findings.  CMS's initial determination referenced a survey cycle start date of January 2, 2019, and a complaint survey completed on January 2, 2019.  CMS Ex. 2 at 1.  CMS imposed a $16,044 one‐day CMP for January 24, 2019, and a $110 per‐day CMP beginning on January 25, 2019, which would continue until substantial compliance with participation requirements was achieved.  CMS also imposed a DPNA, effective March 3, 2019.  The initial determination further stated that, because Petitioner was subject to a

**Page 6**

partially extended survey, Petitioner was prohibited from offering or conducting a Nurse Aide Training and/or Competency Program (NATCEP) for two years beginning January 25, 2019.  CMS Ex. 2.

Based on Petitioner's request for informal dispute resolution, the state agency issued a February 19, 2019 letter indicating that it changed the DPNA's effective date from March 3, 2019 to March 26, 2019.  Further, the state agency notified Petitioner it deleted a deficiency (i.e., 42 C.F.R. § 483.45 (Tag F758) (Free from Unnecessary Psychotropic Meds/PRN Use)), found in a January 2, 2019 survey.  Finally, the state agency notified Petitioner that it changed the survey cycle start date from January 2, 2019 to January 25, 2019.  CMS Ex. 3.

On February 28, 2019, the state agency conducted a survey based on a complaint; however, the survey did not reveal any deficiencies.  P. Ex. 12.

In a March 28, 2019 letter, the state agency indicated that it had revisited Petitioner's facility and determined that, in relation to the deficiencies found during the January 25, 2019 and February 13, 2019 surveys, Petitioner had returned to substantial compliance as of February 22, 2019.  CMS Exs. 5-7.

On March 29, 2019, Petitioner filed an extensive request for hearing (First RFH) before an ALJ to dispute the February 15, 2019 initial determination.  P. Ex. 4.  The First RFH referenced the state agency's February 1, 2019 initial determination and summarized the findings of the survey completed on January 25, 2019, including the finding of substandard quality of care, the imposition of a DPNA effective March 3, 2019, and recommended remedies to CMS.  P. Ex. 4 at 1‐2.  In the First RFH, Petitioner challenged both alleged deficiencies, the immediate jeopardy determination, and the imposed CMPs.  P. Ex. 4 at 10‐11, 23.

On April 4, 2019, the Civil Remedies Division docketed the First RFH under docket number C‐19‐623 and I issued an Acknowledgment and Prehearing Order, which established deadlines and procedures for prehearing submissions.

CMS issued a disposition of remedies notice on April 11, 2019.  The notice indicated that it related to the January 25, 2019 survey cycle, which also included the state agency surveys concluded on February 13 and 28, 2019.  The notice acknowledged Petitioner's return to substantial compliance on February 22, 2019.  Due to the substantial noncompliance found during the February 13, 2019 survey, CMS agreed with the state agency that Petitioner remained out of compliance and that previously imposed enforcement remedies should continue through February 21, 2019.  CMS noted that the DPNA did not go into effect, but due to the ongoing substantial noncompliance, continued to impose a $110 per-day CMP from January 25, 2019 through February 21, 2019.  Therefore, the notice concluded that CMS had imposed a total CMP of $19,124 on

**Page 7**

Petitioner based on a $16,044 CMP for one‐day of immediate jeopardy on January 24, 2019, and $110 per‐day from January 25, 2019 through February 21, 2019.  CMS Ex. 8.  The April 11, 2019 notice stated that CMS received Petitioner's request for an ALJ hearing regarding the February 15, 2019 initial determination and imposition of CMPs.  The notice also stated that it had not received a hearing request concerning the loss of NATCEP approval based on a finding of substandard quality of care.  The notice provided appeal rights based on the continuation of previously imposed remedies.  CMS Ex. 8 at 3.

On May 24, 2019, CMS filed, in the electronic file for the case docketed under C-19-623, a request for an extension (CMS Extension) of its prehearing exchange deadline, noting that CMS had issued the April 11, 2019 notice.  CMS Extension at 2.  In its extension request, CMS indicated it would be more efficient to wait and see if Petitioner requested a hearing based on the April 11, 2019 notice.  CMS Extension at 3.

Petitioner responded (P. Response) to CMS's extension request by asserting that, with the exception of the loss of NATCEP approval, its First RFH already appealed the remedies previously imposed.  P. Response at 2.  Petitioner stated that its First RFH did not appeal the loss of the NATCEP because it does not offer a NATCEP.  P. Response at 2 n.2.  Petitioner opposed an extension because it had filed another hearing request (Second RFH) on May 29, 2019, as a precaution to ensure that it preserved its appeal rights concerning the matters appealed in the First RFH.  P. Response at 2-3; P. Ex. 13.  Petitioner also requested consolidation of the First and Second RFHs.  P. Response at 3.

While Petitioner stated in the Second RFH that Petitioner continued to appeal the matters raised in the First RFH, Petitioner stated that the Second RFH did not appeal the new deficiencies referenced in the April 11, 2019 notice relating to the survey completed on February 13, 2019.  P. Ex. 13 at 2.  However, Petitioner sought as "relief" in the Second RFH a determination that the alleged deficiencies did not constitute substandard quality of care.  P. Ex. 13 at 3.

On May 31, 2019, I acknowledged the Second RFH, consolidated it with the Frist RFH under docket number C-19-836, dismissed docket number C‐19‐623, and granted CMS's request for an extension.

On July 30, 2019, Petitioner moved for summary disposition and filed 13 exhibits (P. Exs. 1‐13).  On September 3, 2019, CMS filed a prehearing brief incorporating a motion to dismiss Petitioner's Second RFH, motion for summary judgment, and opposition to Petitioner's motion for summary disposition (CMS Br.).  CMS also submitted 33 proposed exhibits (CMS Exs. 1‐33), which included the written direct testimony of its one proposed witness, state surveyor Shelly A. Reed, R.N. (CMS Ex. 32).

**Page 8**

In its motion to dismiss, CMS argued that, based on Petitioner's statement in the Second RFH that Petitioner was not appealing the new deficiencies from the February 13, 2019 survey, Petitioner conceded the factual findings in the February 13, 2019 SOD.  CMS Br. at 6-7.  CMS also argued the Second RFH should be dismissed because Petitioner did not appeal the deficiencies found in the February 13, 2019 survey, Petitioner corrected the deficiencies the same day the state agency found the deficiencies, and the deficiencies did not impact the total CMP amount.  CMS Br. at 7-8.  In the alternative, CMS sought summary judgment regarding the deficiencies cited in the February 13, 2019 survey.  CMS Br. at 8-10.  CMS further argued that since Petitioner stated in its response to CMS's extension request that it was not appealing the loss of a NATCEP because it did not offer a NATCEP, Petitioner could no longer dispute the substandard quality of care finding as it has not suffered any harm.  CMS Br. at 10.

On September 19, 2019, Petitioner filed a combined rebuttal (P. Rebuttal) to CMS's motions to dismiss and for summary judgment and an additional exhibit (P. Ex. 14).  Petitioner indicated it opposed the continued imposition of CMPs based on the deficiencies found in the January 25, 2019 survey, which it appealed in the First RFH.  P. Rebuttal at 3-4.  Petitioner further stated that all issues raised in the First RFH should be preserved and any remedy appealed in the First RFH should not be supported in any way by the deficiencies found in the February 13, 2019 survey.  P. Rebuttal at 4.

On September 12, 2019, Petitioner filed an alternative motion for partial summary disposition.  CMS filed a response to Petitioner's motion on September 13, 2019.  On September 26, 2019, Petitioner filed a rebuttal statement to CMS's response.

On October 4, 2019, Petitioner filed a prehearing brief (P. Br.) and additional exhibits (P. Exs. 5A, 14A, and 15).  Petitioner also withdrew P. Exs. 1, 2, 3, 9, 10, and 11 as duplicative of later-filed CMS exhibits or no longer necessary unless I grant summary judgment for Petitioner.  Along with its brief, Petitioner proposed four witnesses.  Petitioner submitted the written  direct testimony for each of these witnesses as follows:  Resident B (P. Exs. 5, 5A); Resident B's mother (P. Ex. 6); Michelle R. O'Daire, Activity Director (P. Ex. 7); and Cindi R. Cooper, Administrator (P. Exs. 8, 14A).  CMS filed a rebuttal (CMS Reply) to P's prehearing brief on October 17, 2019.

III.  Evidentiary Rulings and Decision on the Record

Both parties objected to various proposed exhibits submitted by the parties.  For the reasons stated below, I admit CMS Exhibits 1 through 33 and P. Exhibits 4, 5, 5A, 6 through 8, 12 through 14, 14A, and 15.

Generally, I must admit all relevant and material evidence into the record.  42 C.F.R. § 498.60(b)(1).  Further, I may receive evidence into the record even if it is inadmissible under the rules of evidence used in the courts.  42 C.F.R. § 498.61.

**Page 9**

Petitioner objected to CMS Ex. 10 as inherently unreliable to either prove or otherwise evidence the existence of the alleged violations.  CMS responded that the SOD is admissible as the state agency's observations and investigative findings.  CMS also pointed out that its witness, who drafted the SOD, declared under penalty of perjury that the statements in the SOD are true and accurate summaries of her record review, observations, and interviews.  CMS Ex. 32 ¶ 7.  I overrule Petitioner's objection because the SOD provides the allegations of fact on which the deficiencies in this case are based.  Therefore, it is relevant and material to the issues in this case.

Petitioner objected to CMS Exhibits 1, 2, 4, 5, 6, 7, 8, 9, and 14 to the extent the exhibits are used to prove the existence of the alleged deficiencies.  CMS replied that these documents are agency records and notices issued to Petitioner and that these documents provide relevant and material information about the survey cycle, deficiencies cited, and remedies, as well as the scope of the issues in this case.  I overrule Petitioner's objection because the documents are relevant and material to identifying the survey cycle, cited deficiencies, periods of alleged noncompliance, immediate jeopardy determination, and remedies imposed.

Petitioner objected to CMS Exhibits 21 and 28 because the documents are Petitioner's internal policies and are irrelevant and unfairly prejudicial.  Petitioner asserts its abuse policies exceed the minimum required by the regulations and considering the policies in this case would be against public policy.  CMS argued in response that the DAB has stated in previous cases that a facility's policies may reflect the facility's judgment about how best to achieve compliance with the regulatory requirements.  I overrule Petitioner's objection because the regulations required Petitioner to develop and implement written policies and procedures to prohibit and prevent abuse as well as to investigate allegations of abuse.  42 C.F.R. § 483.12(b)(1), (2).  Therefore, they are relevant and material to the issue of whether Petitioner was in compliance with participation requirements.

Finally, Petitioner objected to CMS Exhibits 31 and 33, which are state and CMS policy documents that Petitioner believes conflict with the regulation concerning sexual abuse.  As CMS points out, Petitioner's policies incorporate the state policy and the CMS State Operations Manual, which represents CMS's interpretation of the regulations.  Therefore, I overrule Petitioner's objections to CMS's exhibits.

CMS objected to Petitioner Exhibit 4, which is the First RFH, and Petitioner Exhibit 13, which is the Second RFH, as legal argument.  Petitioner responded that these documents establish the timeliness of appeal, the issues appealed, and the relief sought.  I overrule CMS's objection for reasons similar to my ruling on Petitioner's objections to state agency and CMS notices, letters, and agency records.  Petitioner's hearing requests assist in defining the issues in this case.  Therefore, I will not exclude Petitioner's exhibits, except for the exhibits that Petitioner withdrew (i.e., Petitioner Exhibits 1, 2, 3, 9, 10, 11).

**Page 10**

I required the parties to submit the written direct testimony for the witnesses they wanted to present in this case and informed the parties that I would only hold a hearing if a party requested to cross-examine a witness from whom written direct testimony had been submitted.  Acknowledgment and Prehearing Order ¶¶ 4(c)(iv), 8-10; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b).  CMS submitted a declaration from one witness (CMS Ex. 32).  Petitioner submitted written direct testimony from four witnesses (P. Exs. 5, 5A, 6, 7, 8, and 14A).  Neither party requested to cross-examine any of the witnesses.  Therefore, I issue this decision based on the written record.  Acknowledgment and Prehearing Order ¶ 10; CRDP § 19(d).

IV.  Issues

In consideration of the parties' various motions and arguments, I conclude that the general issues to be resolved in this case are:

Whether Petitioner was in substantial compliance with the Medicare requirement for SNFs at 42 C.F.R. § 483.12(c)(1) and (4) (Tag F609);3
	If Petitioner was not in substantial compliance with program requirements, whether CMS's determination that the noncompliance immediately jeopardized the facility's residents is clearly erroneous; and
	If Petitioner was not in substantial compliance with Medicare requirements, whether a CMP of $16,044 for one day and $110 per-day for 28 days is appropriate under the statutory and regulatory factors for setting a penalty amount.  42 U.S.C. § 1320a-7a(d); 42 C.F.R. § 488.438(f).The following are **not** issues to be resolved in this case:

The finding of substandard quality of care is not subject to review in this case.  Petitioner was subject to a partially extended survey in January 2019 and CMS imposed a CMP of $19,124 on Petitioner.  CMS Ex. 2 at 1, 3; CMS Ex. 10 at 1.  Based on each of those events, CMS was required by statute to preclude Petitioner**Page 11**

from having a NATCEP.  CMS Ex. 2 at 4-5; 42 U.S.C. § 1395i-3(f)(2)(B)(iii)(I)(b)-(c), (g)(2)(B)(i); 42 C.F.R. §§ 483.151(b)(2)(iii), (iv), (f)(1), 488.301 (definitions of *Extended survey* and *Substandard quality of care*); 45 C.F.R. § 102.3.

The deficiencies found in relation to the survey that concluded on February 13, 2019, are not at issue in this case because Petitioner did not appeal those deficiencies.  P. Ex. 13 at 2.  Therefore, I treat those deficiencies as undisputed.V.  Findings of Fact

Petitioner is an SNF located in Anderson, Indiana that participates in the Medicare program.  CMS Ex. 2 at 1; CMS Ex. 10 at 1.
	Resident B was admitted to the facility in June 2016.  CMS Ex. 19 at 1.  A Psychiatric Progress Note dated January 4, 2019, indicated Resident B's diagnoses included dementia from anoxic brain injury, depression, anxiety, conversion disorder (seizure), impulse control disorder, and insomnia.  CMS Ex. 19 at 14.  A Brief Interview for Mental Status assessment performed in August 2018 and November 2018 indicated Resident B had mild impairment with comprehension, executive function, insight, and judgment.  CMS Ex. 19 at 6, 16.
	The facility assessed Resident B as at risk for complications associated with anoxic brain injury including fever, infection, seizures, nerve damage, poor decision making, mood swings, memory problems, and impacted social skills.  CMS Ex. 19 at 4.  The facility also care-planned for each of the following:  anxiety; cognitive loss; verbal behavior including threatening others, screaming at others, and cursing at others; resident-to-resident altercations; and depression.  CMS Ex. 19 at 5-9.
	Resident B's mother is Resident B's court-appointed guardian.  CMS Ex. 19 at 1‐3; P. Ex. 6 ¶ 5.
	Housekeeper 1 began working for Petitioner on November 27, 2018.  CMS Ex. 22 at 1-2; P. Ex. 14; P. Ex. 14A at 4-5.  A General Employee Orientation Checklist indicated that on November 27, 2018, the housekeeper was instructed and voiced understanding on numerous topics, including "Employee Conduct" and "Resident Abuse."  CMS Ex. 22 at 1.  The checklist stated, "The facility strictly prohibits relationships between an employee and a resident of any type beyond professional caregiver-to-resident interaction."  The housekeeper signed the checklist acknowledging: "I have been instructed and completely understand all of the above information and agree to comply accordingly."  CMS Ex. 22 at 2.**Page 12**

On January 8, 2019, at approximately 10:32 p.m., Resident B texted the facility's activity director, stating: "Hey I just want to let you know that I got a blow job from an employee. . . . I'm terribly sorry but I'm so lonely."  The activity director texted back and asked Resident B which employee he was referring to, but Resident B declined to identify the employee.  The activity director then asked Resident B if he was "serious or yanking [her] chain."  Resident B responded that "I know she's gonna get fired [and] probably arrested," "Yanking your chain," and "LOL sorry."  The activity director texted back, "[Resident B] what am I going to do [with] you."  Resident B replied he is "twisted."  The activity director did not respond further.  CMS Ex. 23; P. Ex. 7 ¶¶ 5-7; P. Ex. 7 at 5; P. Ex. 8 at 5.
	The activity director reported her text conversation with Resident B to Petitioner's administrator on January 9, 2019, at approximately 9:45 a.m.  CMS Ex. 18 at 1, 3; CMS Ex. 23; CMS Ex. 18 at 1; P. Ex. 7 ¶ 7; P. Ex. 7 at 5; P. Ex. 8 at 5.  The administrator informed the activity director that she should have immediately reported the text conversation with Resident B, even though he had indicated he was joking, due to the need to initiate an investigation into possible inappropriate conduct by an employee.  CMS Ex. 18 at 1, 3.
	At 10:15 a.m., the administrator interviewed Resident B.  Resident B told the administrator that, a couple of days earlier, an employee performed an oral sexual act on him in his room.  In response to the administrator's questioning, Resident B identified the employee as Housekeeper 1.  CMS Ex. 18 at 1, 3; P. Ex. 8 ¶ 9.  The administrator noted that during the interview, Resident B "was smiling and appeared ‘happy' about the alleged interaction with the staff member."  CMS Ex. 18 at 3.
	At 10:45 a.m., the administrator notified Housekeeper 1 by telephone that the housekeeper was suspended pending an investigation.  During the telephone call, Housekeeper 1 admitted that she sent naked pictures of herself to resident [B]."  CMS Ex. 18 at 1, 3.
	Petitioner's social services director spoke to Resident B who indicated he had multiple pictures on his phone that the housekeeper had texted to him.  Because the phone was Resident B's personal property and Resident B's legal guardian was not involved in the conversation, the facility did not attempt to authenticate Resident B's statement.  CMS Ex. 18 at 3-4.
	Housekeeper 1 arrived at the facility at 1:30 p.m. for an interview with the administrator, regional director, and nurse consultant.  The housekeeper denied performing oral sex on Resident B, but admitted she sent nude photos of herself to Resident B's phone one evening a few weeks prior when she was off-duty and intoxicated.  CMS Ex. 18 at 2, 4; P. Ex. 8 ¶ 10.  The housekeeper also signed a**Page 13**

written statement on January 9, 2019, admitting she sent nude pictures of herself to Resident B, but denied having any sexual contact with Resident B.  CMS Ex. 22 at 4.  Following the interview, the administrator terminated the housekeeper's employment.  CMS Ex. 17; CMS Ex. 18 at 2, 4; P. Ex. 8 ¶ 10.

At approximately 2:10 p.m., the social services director called Resident B's mother.  Resident B's mother stated that Resident B had already informed her about the incident and Resident B was "not innocent in all of this."  The social services director explained the incident to Resident B's mother and reported that the housekeeper admitted to sending inappropriate texts to Resident B while she was off duty, but denied any sexual contact with Resident B.  He also informed Resident B's mother that the facility had terminated the employee.  CMS Ex. 18 at 2, 4; CMS Ex. 19 at 24; P. Ex. 6 ¶ 7.
	The social services director completed a Possible or Potential Mental Anguish Assessment of Resident B in relation to the allegation.  The assessment indicated Resident B did not show any signs or symptoms of mental anguish.  CMS Ex. 19 at 26.
	The social services director contacted Resident B's mother again at approximately 4:15 p.m. to ask if she wanted to report the incident to the police or pursue any criminal charges against the housekeeper.  Resident B's mother stated that she did not want to file a police report or press charges against the housekeeper.  Resident B's mother also stated, "If anything happened, [Resident B] was a willing participant in all of this."  CMS Ex. 18 at 5; CMS Ex. 20; P. Ex. 6 ¶ 8.
	Petitioner notified the police at 4:50 p.m.  The officer who arrived at the facility declined to investigate or file a report because the officer did not believe that Resident B had alleged abuse and Resident B's legal guardian did not want to pursue an investigation.  CMS Ex. 18 at 2, 5.
	Resident B's mother went to the facility on the evening of January 9, 2019, to retrieve Resident B's personal phone and Kindle.  CMS Ex. 18 at 5; P. Ex. 6 ¶ 8.  Resident B's mother viewed the photos the housekeeper sent to Resident B and noted the photos were sent on January 1, 2019, at approximately 5:30 p.m.  P. Ex. 6 ¶ 9.  The phone number from which the photos were sent is not associated with Petitioner.  P. Ex. 8 ¶ 11.
	A nurse approached Resident B at approximately 7:00 p.m. and asked permission to conduct the weekly full body skin assessment.  Resident B refused the assessment.  CMS Ex. 18 at 2, 5; CMS Ex. 19 at 25.**Page 14**

The administrator did not believe her investigation substantiated Resident B's allegations that Housekeeper 1 had performed a sexual act on Resident B.  *See* CMS Ex. 18 at 5-6.
	In a declaration dated February 20, 2019, Resident B stated, under penalty of perjury, that Housekeeper 1 texted nude photographs of herself after he had requested that she send the photographs.  P. Ex. 5 ¶ 3; P. Ex. 5A ¶ 3.  Resident B also declared that, on another day, he "consented to receiving oral sex from [the housekeeper] and [the housekeeper] gave me that oral sex in my room at Lindberg."  P. Ex. 5 ¶ 4; P. Ex. 5A ¶ 4.  Resident B's mother/guardian read and approved Resident B's declaration.  P. Ex. 6 ¶ 10.
	In a declaration dated February 20, 2019, the activity director stated that, in her opinion, the text messages from Resident B to her on January 8, 2019 did not allege any sexual abuse.  P. Ex. 7 ¶¶ 5, 8.
	The facility's Abuse Prohibition, Reporting and Investigation Policy states that the "facility shall prohibit and prevent abuse" and defines abuse as the "willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish."  The policy further provides that abuse encompasses "verbal abuse, sexual abuse, physical abuse, and mental abuse including abuse facilitated or enabled through the use of technology."  CMS Ex. 21 at 1.
	In its definition of sexual abuse, Petitioner's Abuse Prohibition, Reporting and Investigation Policy specifically states:  "Any staff to resident sexual contact and/or sexual relationship is considered to be abuse."  The policy further states:The relationship between a resident and their caregiver is a **professional relationship**.  The facility strictly prohibits relationships between an employee and a resident of any type beyond professional caregiver-to-resident interaction.  Should there ever be a time when a caregiver acts or speaks in a manner which would be considered trying to establish a relationship beyond that of a professional caregiver, **the caregiver must report** to the nurse or supervisor immediately.

CMS Ex. 21 at 1 (emphasis in original).

The Abuse Prohibition, Reporting and Investigation Policy states, "All reports of abuse must be reported to the Administrator immediately and to the resident's representative (sponsor, resident representative) per policy."  CMS Ex. 21 at 5.**Page 15**

The policy also states:  "It is the responsibility of every employee of this facility to not only report abuse situations, but also suspicion of abuse and unusual observations and/or circumstances, to his or her supervisor.  CMS Ex. 21 at 5.  If resident abuse is reported, Petitioner's policy requires notification of local law enforcement, if warranted, and the resident's family or representative.  CMS Ex. 21 at 6.

The Abuse Prohibition, Reporting and Investigation Policy further states:The facility shall report all reportable incidents, which include allegations of abuse, immediately to the Long Term Care Division of the State Department of Health.  Upon completion of the investigation, which must occur within 5 days of the reporting of an allegation/incident, a report of the investigation must be forwarded to the Long Term Care Division of the State Department of Health.

CMS Ex. 21 at 3.

The Abuse Prohibition, Reporting and Investigation Policy also requires thorough investigation of all alleged violations.  The facility administrator is responsible for coordinating all efforts of the investigation and ensuring all policies and procedures are followed.  The administrator must begin the investigation immediately and compile findings within five days of the initial notification of the incident.  Upon completion of the investigation, the administrator must forward the report of the investigation to the state agency.  CMS Ex. 21 at 2-3, 5-7.
	The facility's Unusual Occurrences policy requires "all alleged violations involving mistreatment, neglect, or abuse . . . are reported immediately to the Administrator of the facility and to other officials as applicable."  CMS Ex. 21 at 10.
	The state agency Division of Long Term Care's Incident Reporting Policy provides guidance on the type of incidents to be reported, timeline for reporting, and information to be included in reports.  The policy lists sexual abuse as a reportable incident under Federal and State rules and includes "any staff to resident sexual contact" in the definition of sexual abuse.  Examples of sexual abuse includes "sharing pornography" and "exhibitionism."  CMS Ex. 31 at 2-3.  Residential care facilities must report incidents within 24 hours after discovery of the incident and must submit a follow-up report within five working days after the initial report.  CMS Ex. 31 at 11.**Page 16**

VI.  Conclusions of Law and Analysis

***1. Petitioner was not in substantial compliance with *42 C.F.R. § 483.12(c)(1) and (4) (Tag F609) because the activity director failed to inform Petitioner's administrator of Resident B's allegation of abuse within two hours of learning of the allegation, and the administrator neither reported the allegation of abuse to the state agency when she learned of it nor after she completed her investigation into the allegation.****

"[S]killed nursing facilit[ies] must protect and promote the rights of each resident, including . . . [t]he right to be free of physical or mental abuse."  42 U.S.C. § 1395i-3(c)(1)(A)(ii).  The Secretary's regulation implementing this requirement states, in pertinent part, that "[t]he resident has the right to be free from abuse, neglect, misappropriation of resident property, and exploitation as defined in this subpart."  42 C.F.R. § 483.12.  The regulations define abuse as "the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish" and "includes verbal abuse, sexual abuse, physical abuse, and mental abuse including abuse facilitated or enabled through the use of technology."  42 C.F.R. § 483.5.

In response to allegations of abuse, the facility must:

Ensure that all alleged violations involving abuse, neglect, exploitation or mistreatment are reported immediately, but not later than 2 hours after the allegation is made, if the events that cause the allegation involve abuse . . . or not later than 24 hours if the events that cause the allegation do not involve abuse . . . to the administrator of the facility and to other officials (including to the State Survey Agency and adult protective services where state law provides for jurisdiction in long-term care facilities) in accordance with State law through established procedures.

42 C.F.R. § 483.12(c)(1).  Indiana regulations are essentially the same, requiring abuse allegations to be immediately reported to the facility administrator and the state agency.  Ind. Admin. Code tit. 410, § 16.2-3.1-28(c).  Federal regulations further require the facility:

Report the results of all investigations to the administrator or his or her designated representative and to other officials in accordance with State law, including to the State Survey Agency, within 5 working days of the incident, and if the

**Page 17**

alleged violation is verified appropriate corrective action must be taken.

42 C.F.R. § 483.12(c)(4).  Again, Indiana regulations adopt the federal standard and require facilities to report the results of its investigation within five working days.  Ind. Admin. Code tit. 410, § 16.2-3.1-28(e).

Consistent with these regulations, Petitioner's Abuse Prohibition, Reporting and Investigation Policy requires every employee to report abuse situations and suspicions of abuse and unusual observations and/or circumstances to his or her supervisor.  CMS Ex. 21 at 5.  All incidents of abuse must then be reported to the administrator and resident's representative immediately.  CMS Ex. 21 at 5.  Petitioner's Unusual Occurrences policy also requires all alleged violations involving mistreatment, neglect, or abuse to be reported immediately to the administrator and other officials as applicable.  CMS Ex. 21 at 10.  The policy further requires immediate reporting of abuse allegations to the Long Term Care Division of the state agency, followed by submission of a report of the investigation within five days of the reporting of the allegation or incident.  CMS Ex. 21 at 3.  The Petitioner's policy is consistent with state agency guidance.  CMS Ex. 31 at 2-3, 11.

CMS asserts that the activity director admitted she did not immediately report the allegations Resident B made in his text messages to the administrator.  CMS Br. at 25.  CMS cites to the testimony of the state surveyor, who is a registered nurse, that her review of Resident B's records did not show he had a history of making false allegations, false reports, or jokes about incidents that did not occur.  CMS Br. at 26; CMS Ex. 32 ¶¶ 1, 14.  Further, CMS contends that even though the activity director thought Resident B was joking, a lack of belief in the allegation of abuse is not a defense.  CMS Br. at 26-27.  CMS argues Resident B's texts to the activity director should have raised suspicions of sexual abuse that were required to be reported to the administrator in accordance with Petitioner's policy defining any staff-to-resident sexual contact as sexual abuse and its Abuse Prohibition, Reporting and Investigation policy.  CMS Br. at 26-27.  CMS also asserts Petitioner was not in substantial compliance because the administrator failed to report the sexual abuse allegations to the state agency, even after Resident B repeated the sexual abuse allegation during an interview and the housekeeper admitted sending nude pictures to Resident B.  CMS Br. at 27.

Petitioner's primary defense is that, as a matter of law, there was no sexual abuse because sexual abuse is only non-consensual sexual contact.  Petitioner emphasizes that under the regulation, sexual abuse is non-consensual sexual contact of any type with a resident.  P. Br. 14.  Petitioner asserts Resident B had a consensual relationship with the housekeeper and consented to the sexual act with the housekeeper.  P. Br. at 11, 13-15.  Petitioner cites Resident B's declaration, which states that:

**Page 18**

One afternoon on a day that [the housekeeper] was not working at Lindberg Crossing I texted [the housekeeper] asking [the housekeeper] to text me naked photos of herself.  [The housekeeper] responded that same night by texting me naked photos of herself.

On a different day, I consented to receiving oral sex from [the housekeeper] and [the housekeeper] gave me that oral sex in my room at Lindberg.

P. Br. at 13; P. Ex. 5 ¶¶ 3-4; P. Ex. 5A ¶¶ 3-4.  Petitioner also relies on Resident B's mother's statements that:

Resident B" is capable of making his own decisions about with whom he may have personal relationships and "Resident B" does make his own decisions about with whom he does have personal relationships.

I had already been told by "Resident B" in actual words or the substance of actual words used that he had a consensual personal relationship with the Housekeeper that included oral sex being given by the Housekeeper to "Resident B."

To be clear, it is my opinion that "Resident B" was not in any way abused by the Housekeeper because the relationship between "Resident B" and the Housekeeper was entirely consensual.

P. Ex. 6 ¶¶ 6-8 (emphasis omitted).  Therefore, according to Petitioner, because Resident B consented to the sexual act, there was no sexual abuse, and consequently, no duty to report anything.  P. Br. at 22.

Petitioner also disputes the sexual act occurred because Resident B was joking when he texted the activity director that an employee had performed oral sex on him.  P. Br. at 15, 21-22.  Petitioner points to the activity director's declaration to support its contention that Resident B was joking.  P. Br. at 8-10, 21-22.  In her declaration, the activity director stated:

"Resident B" did not "report sexual abuse" to me and did not make any allegation of abuse.

**Page 19**

My text messaging with "Resident B" . . . demonstrated to me and still demonstrates to me that "Resident B" had not received [oral sex] and that "Resident B" was joking.

It was my opinion on January 8, 201[9], and remains my opinion that the text messaging made by "Resident B" to me on January 8, 201[9], did not report but rather denied any abuse of "Resident B" and also did not allege any abuse of "Resident B."

P. Ex. 7 ¶¶ 5, 6, 8 (emphasis omitted).

The activity director further declared that, based on her previous communications with Resident B, Resident B "frequently tries to be funny."  P. Ex. 7 ¶ 6.  Petitioner also cites Resident B's mother, who also declared that Resident B "frequently tries to be funny."  P. Br. at 13, 22; P. Ex. 6 ¶ 6.  Petitioner again asserts that because Resident B was joking, no sexual abuse occurred and, therefore, there was no sexual abuse to report to the state agency.  P. Br. at 22.

Finally, Petitioner contends that the facility and state agency's policies defining any sexual contact between a facility employee and resident as sexual abuse is more stringent than the regulations, therefore, holding Petitioner to a higher standard than required by any federal regulation is contrary to public policy.  P. Br. at 19-21.

As an initial matter, the weight of the evidence in the record supports a finding that the sexual act, as initially alleged by Resident B, occurred.  Resident B first reported the sexual contact with the housekeeper to the activity director.  CMS Ex. 23; P. Ex. 7 at 5; P. Ex. 8 at 5.  Although he then indicated he was joking after questioning by the activity director, Resident B later told the facility administrator that a housekeeper performed an act of oral sex on him a couple of days prior in his room.  CMS Ex. 18 at 1, 3; P. Ex. 8 ¶ 9.  Petitioner submitted a declaration from Resident B's mother in which she declared that Resident B had told her that he had a "consensual personal relationship with the Housekeeper that included oral sex being given by the Housekeeper to ‘Resident B.'"  P. Ex. 6 ¶ 7.  Petitioner also submitted Resident B's declaration, made under penalty of perjury, that unequivocally states that the incident happened.  Resident B declared that he "consented to receiving oral sex from [the housekeeper] and [the housekeeper] gave me that oral sex in my room at Lindberg."  P. Ex. 5 ¶¶ 3-4; P. Ex. 5A ¶¶ 3-4.  Although the record contains a statement from Housekeeper 1 denying sexual contact, Petitioner did not procure the housekeeper's written testimony under penalty of perjury or seek a subpoena to compel her testimony at a hearing.  Further, Housekeeper 1 admitted to sending Resident B nude photographs of herself, thus confirming her relationship with Resident B was sexual in nature.  Therefore, I afford Resident B's consistent allegations

**Page 20**

that Housekeeper 1 performed a sexual act on him, confirmed in his written direct testimony in this proceeding, greater weight than the housekeeper's denial.

Even if the oral sex act did not occur, Resident B's text to the activity director alleged sexual abuse as the state agency and facility policy define that term.  The regulations and the facility's own policies broadly define the types of allegations that must be reported and investigated.  All alleged violations must be reported immediately to the facility administrator and appropriate state agency officials.  42 C.F.R. § 483.12(c)(1); CMS Ex. 21 at 2-3, 5, 7, 10.  In determining whether to report allegations of abuse to the state agency, "the salient question is not whether any abuse in fact occurred or whether [a facility] had reasonable cause to believe that any abuse occurred, but whether there was an allegation that facility staff had abused a resident."  *Cedar View Good Samaritan*, DAB No. 1897(2003); *see* *Britthaven, Inc., d/b/a Britthaven of Smithfield*, DAB No. 2018 at 15 (2006).  The state agency and Petitioner quite reasonably interpret the regulations to consider any allegation of a sexual act by a facility employee with a resident as abuse to ensure it is reported and investigated.  *See* *Rosewood Care Ctr. of Swansea v. Price*, 868 F.3d 605, 619 (7th Cir. 2017) ("R6 and his wife initially approached the administrator because R6 had been ‘kissed' by a nurse and felt uncomfortable with the interaction.  Such a complaint could have constituted abuse because facilities must ‘[n]ot use verbal, mental, sexual, or physical abuse, corporal punishment, or involuntary seclusion.") (emphasis omitted).

Although the activity director concluded from her texts with Resident B that he had fabricated the allegation of sexual activity with a facility employee, such a conclusion was unwarranted.  The text conversation between Resident B and the activity director (CMS Ex. 23; P. Ex. 7 at 5; P. Ex. 8 at 5) initially involved Resident B's allegation and the activity director's query as to the name of the employee.  Resident B refused to provide the name, which led the activity director to ask if Resident B was merely "yanking [her] chain."  Significantly, Resident B did not immediately confirm that it was a joke.  Rather, Resident B reflected on the reason he did not want to provide the employee's name, texting that he thought that the employee would be terminated from her job and arrested.  Only after making that assessment did Resident B agree with the activity director that he was just "yanking [the activity director's] chain."

Based on this text conversation, it was unreasonable for the activity director to disregard Resident B's allegation of sexual contact between himself and a facility employee. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1) because the activity director failed to immediately report Resident B's allegations of oral sex to the administrator.  Section 483.12(c)(1) requires facility staff to report allegations of abuse to the facility administrator within two hours.  42 C.F.R. § 483.12(c)(1).  Resident B texted the activity director at approximately 10:32 p.m. on January 8, 2019, alleging that an employee had performed an act of oral sex on him.  CMS Ex. 23 at 1; P. Ex. 7 at 5; P. Ex. 8 at 5.  Yet, the activity director did not inform the administrator of Resident B's text

**Page 21**

messages until the next morning, at approximately 9:45 a.m. CMS Ex. 18 at 1, 3; CMS Ex. 23 at 1; P. Ex. 7 ¶ 7; P. Ex. 8 at 5.

Petitioner also failed to be in substantial compliance with 42 C.F.R. § 483.12(c)(1) because, once the activity director belatedly informed the administrator of Resident B's allegations, the administrator failed to immediately report them to the state agency.  Instead, the administrator investigated the matter.

Significantly, the administrator's actions betray that the administrator thought Resident B's texts constituted an allegation of abuse.  She informed the activity director that the allegation should have been immediately reported.  CMS Ex. 18 at 3.  Further, the administrator's investigation assumed the character of an investigation into possible abuse, including two attempts to conduct full-body skin assessments of Resident B during the inquiry.  CMS Ex. 18 at 3, 5; *see* *Cedar View Good Samaritan*, DAB No. 1897 ("Moreover, the Administrator and [director of nursing] treated the incidents as allegations of abuse and conducted investigations of the incidents, including examining the residents for sexual abuse.").  The administrator's inclination that the allegation involved potential abuse was correct.  However, despite an investigation that yielded significant evidence, the administrator did not report anything to the state agency.

Early in the administrator's investigation, the administrator learned directly from Resident B of the oral sex act and the employee involved.  Further, the administrator learned from Housekeeper 1 that she sent nude photographs of herself to Resident B.  Petitioner does not dispute that the housekeeper texted nude photos of herself to Resident B.  P. Br. at 19.  In fact, the housekeeper admitted she sent nude photos of herself to Resident B's phone on an evening a few weeks prior when she was off-duty and intoxicated.  CMS Ex. 18 at 2, 4; P. Ex. 8 ¶ 10.  Resident B confirmed to the social services director that he had multiple pictures on his phone that the housekeeper had texted to him.  CMS Ex. 18 at 3-4.  Resident B declared that one day when the housekeeper was off-duty, he asked the housekeeper to text nude photos of herself to him, and the housekeeper texted back that same night with nude photos of herself.  P. Ex. 5 ¶¶ 3-4; P. Ex. 5A ¶¶ 3-4.  Resident B's mother also declared that she viewed the nude photos the housekeeper sent to Resident B.  P. Ex. 6 ¶ 9.

The housekeeper's act of texting nude photos of herself to Resident B alone constituted sufficient evidence of alleged sexual abuse to require reporting.  Petitioner's Abuse Prohibition, Reporting and Investigation Policy specifically states:  "**Any** staff to resident sexual contact and/or sexual relationship is considered to be abuse," and prohibits relationships between an employee and a resident of any type beyond professional caregiver-to-resident information.  CMS Ex. 21 at 1 (emphasis in original).  In-line with the regulations, Petitioner's policy defines abuse as "verbal abuse, sexual abuse, physical abuse, and mental abuse including abuse facilitated or enabled through the use of technology."  CMS Ex. 21 at 1; *see* 42 C.F.R. § 483.5.  The state agency Division of

**Page 22**

Long Term Care's Incident Reporting Policy includes sexual abuse as a reportable incident under Federal and State rules and defines "any staff to resident sexual contact" as sexual abuse.  CMS Ex. 31 at 2-3.  Examples of sexual abuse include "sharing pornography" and "exhibitionism."  CMS Ex. 31 at 3.  Petitioner's and the state agency's policies do not differentiate between consensual and non-consensual sexual contact.

Therefore, upon learning of Resident B's texts to the activity director, instead of reporting those allegations to the state agency as required by 42 C.F.R. § 483.12(c)(1), the administrator moved onto the next step in the regulations and conducted an investigation under 42 C.F.R. § 483.12(c)(2).  Following this investigation, the administrator obtained enough information to suspend and later fire the housekeeper and report the incident to the police.  CMS Ex. 17; CMS Ex. 18 at 1-5; P. Ex. 8 ¶ 10.  Yet, the administrator concluded that the allegations Resident B made could not be substantiated, and thus did not constitute an allegation of abuse.  CMS Ex. 18 at 4.  However, the regulations and Petitioner's policies do not give the administrator time to investigate and make such subjective conclusions before reporting.  The administrator is required to report any allegation of sexual abuse within two hours of the allegation.  Further, the regulation "explicitly requires reporting of the results of all investigations of abuse, not merely those that substantiate abuse."  *Singing River Rehab. & Nursing Ctr.*, DAB No. 2232 at 8 (2009); *see* 42 C.F.R. § 483.12(c)(4).  Therefore, the administrator needed to forward the results of the investigation within five days of the reporting of an allegation/incident.  42 C.F.R. § 483.12(c)(1), (4); CMS Ex. 21 at 3.  The administrator simply did not comply with the obligations to report and, as a result, Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1) and (4).

Petitioner raises several issues in briefing that do not affect the conclusion that Petitioner was in substantial noncompliance.  Petitioner asserts that Resident B consented to the housekeeper's actions.  Petitioner also asserts that it is not responsible for the actions of the housekeeper because the housekeeper was not employed as a caregiver and she was acting outside the scope of her employment when allegedly engaged in sexual contact with Resident B and sending nude photos of herself to Resident B.  P. Br. at 17-19.

However, the obligation to report alleged abuse does not turn on whether a resident may have consented to it.  Further, Petitioner does not address the possibility that Resident B was unable to properly consent to a sexual act with a facility employee.  At admission, Resident B's diagnoses included dementia from anoxic brain injury, depression, anxiety, conversion disorder (seizure), impulse control disorder, and insomnia.  CMS Ex. 19 at 14.  Resident B had mild impairment with comprehension, executive function, insight, and judgment, and the facility assessed Resident B at risk for complications associated with anoxic brain injury including poor decision making and impacted social skills.  CMS Ex. 19 at 4, 16.  Because of his mental limitations, Resident B has a guardian, his mother, to make decisions for him.  CMS Ex. 19 at 1‐3; P. Ex. 6 ¶ 5.  Although Resident B declared that he consented to the sexual contact from the housekeeper, he had texted the activity

**Page 23**

director:  "I'm terribly sorry but I'm so lonely."  CMS Ex. 23 at 1; P. Ex. 7 at 5; P. Ex. 8 at 5.  Resident B also told the administrator that the housekeeper just walked into his room and engaged in the sexual act even though they had "never talked about sex before."  CMS Ex. 18 at 1, 3.  Therefore, the record indicates Resident B had limitations on his ability to consent to a sexual act with an employee.  Accordingly, the activity director's lack of action and the administrator's failure to report cannot be excused.

Further, contrary to its argument that Petitioner can bear no responsibility for the housekeeper's actions, such an argument is incorrect.  *See**Madison Cty. Nursing Home*, DAB No. 2895 at 9 (2018); *Kindred Transitional Care and Rehab. – Greenfield*, DAB No. 2792 at 12 (2017); *Springhill Senior Residence*, DAB No. 2513 at 13 (2013). However, because this decision focuses on the failures of the activity director and administrator to report Resident B's allegation of abuse, Petitioner's responsibility for the housekeeper's action is not relevant.

The activity director was required to report the sexual abuse allegations from Resident B to the administrator within two hours.  The administrator was required to then report the allegations to the state agency within two hours and the results of an investigation within five days.  42 C.F.R. § 483.12(c)(1), (4).  The activity director did not report the sexual abuse allegations to the administrator until almost twelve hours later and the administrator did not report the allegations or the results of the investigation to the state agency.  CMS has met its burden of proving a prima facie case of substantial noncompliance with § 483.12(c)(1), (4) and Petitioner did not rebut that case.  Therefore, I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1), (4).

***2. CMS's determination that Petitioner's noncompliance with 42 C.F.R. § 483.12(c)(1), (4) posed immediate jeopardy to resident health and safety is not clearly erroneous.***

Immediate jeopardy exists if a facility's noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.  42 C.F.R. § 488.301.  The regulation does not require that a resident *actually* be harmed.  *Lakeport Skilled Nursing Ctr.*, DAB No. 2435 at 8 (2012).  I must uphold CMS's determination as to the level of a facility's substantial noncompliance (which includes an immediate jeopardy finding) unless it is "clearly erroneous."  42 C.F.R. § 498.60(c).  The "clearly erroneous" standard imposes on facilities a heavy burden to show no immediate jeopardy, and the DAB has sustained determinations of immediate jeopardy where CMS presented evidence "from which ‘[o]ne could reasonably conclude' that immediate jeopardy exists."  *See, e.g.*, *Barbourville Nursing Home*, DAB No. 1962 at 11 (2005) (quoting *Florence Park Care Ctr.*, DAB No. 1931 at 27-28 (2004)).  In reviewing CMS's finding, I "must consider whether the totality of the allegations support the Agency's determination that [the SNF's] noncompliance ‘has caused, or [was] likely to cause, serious injury, harm,

**Page 24**

impairment, or death to a resident.'"  *Rosewood Care Ctr.*, 868 F.3d at 618 (7th Cir. 2017) (emphasis omitted).

Petitioner asserts there is no evidence to support the immediate jeopardy determinations in this case because there are no allegations of serious injury, harm, impairment or death and the alleged violations were isolated incidents.  P. Br. at 23-24.  However, as CMS points out, Petitioner bears the burden of proof to show clear error in the immediate jeopardy determination.  CMS Br. at 28; *see* 42 C.F.R. § 498.60(c)(2); *Universal Health Care – King*, DAB No. 2383 at 16 (2011), *aff'd*, *Universal Healthcare/King v. Sebelius*, 400 F. App'x 299 (4th Cir. 2012).

CMS contends that its immediate jeopardy finding is appropriate because Petitioner's activity director failed to promptly report Resident B's allegations to the administrator and the facility failed to report anything to the state agency, even though it reported Resident B's allegations to the police.  CMS Br. at 28.  CMS further argues that Petitioner's failure to report delayed the state agency's ability to investigate an allegation of sexual contact between a staff member and resident, and this delay was likely to cause serious harm to residents because it allows deficient practices that fail to protect residents from abuse or exploitation to continue.  CMS Br. at 28.

There is no doubt that Petitioner placed Resident B and other residents in immediate jeopardy.  Both the activity director and the administrator failed to adhere to Petitioner's own policies defining sexual abuse as any sexual contact between a staff member and a resident and requiring prompt reporting of all allegations of sexual abuse.  Significantly, this failure to act involved a vulnerable resident with a brain injury who reported that a facility employee performed a sexual act on him.  Further, while the housekeeper in question denied the sexual act, she admitted to sending the resident nude photographs of herself while she was intoxicated.  Despite the obvious necessity to report this situation, the activity director delayed informing the administrator of the initial allegation from Resident B and, following disclosure of the allegation to the administrator, the administrator never informed the state agency.  Although the administrator took swift action to investigate the matter herself, thus showing the gravity of the allegation, the administrator kept this allegation from the proper regulatory body that oversees the facility.

Such is sufficient to conclude that CMS's immediate jeopardy finding is not clearly erroneous.  The DAB explained the seriousness of failing to report alleged abuse to the state agency as follows:

Contrary to what [the facility's] argument suggests, there did not need to be any signs of sexual abuse of either resident in order for the ALJ to uphold CMS's determination that [the facility's] noncompliance with the requirements of section

**Page 25**

483.1[2] posed immediate jeopardy.  [The facility's] failure to immediately report an allegation of sexual abuse was likely to cause serious harm to [the facility's] residents because it prevented the allegation from being investigated by the State agency in a timely fashion.  Absent an unbiased investigation to determine whether sexual abuse actually occurred and the circumstances which enabled any such abuse to occur, steps might not be taken to prevent future sexual abuse that would cause actual harm.

* * * * *

There is no dispute that [the facility] did not report the second allegation of abuse until October 12.  As indicated above, the purpose of reporting the allegation that facility staff abused a resident is to permit an unbiased investigation to determine whether sexual abuse actually occurred and the circumstances which enabled any such abuse to occur, so that steps can be taken to prevent future sexual abuse.  The fact that [the facility] suspended the CNA who was linked to the incident in question does not establish that [the facility] had corrected conditions that could lead to sexual abuse by other facility staff.  Indeed, [the facility] was unlikely to be able to do so until there was a thorough and independent investigation of the incident in question, which was delayed by its failure to report the incident.

*Cedar View Good Samaritan*, DAB 1897.

I agree that a failure to properly report removes a deterrent to facility employees and reduces the chances that a timely and impartial investigation by the state agency will occur.  Further, failing to report allegations of sexual abuse allows the facility to avoid possible ramifications, such as penalties and negative publicity, thus giving the facility the incentive, as in this case, to conclude internally that there was no abuse based on a finding of a consensual sexual act.  Petitioner's failure to report placed Resident B, who has a questionable ability to consent to sexual contact, and all other residents at the facility, at continued risk of sexual abuse by staff members.

The record supports CMS's determination that Petitioner's failure to report sexual abuse, both internally and to the state agency, involving an employee and a resident was likely to cause serious harm to a resident.  42 C.F.R. § 488.301.  Accordingly, I conclude that CMS did not clearly err in determining that Petitioner's noncompliance with 42 C.F.R. § 483.12(c)(1) and (4) posed immediate jeopardy to the health and safety of its residents.

**Page 26**

***3. The $16,044 one‐day CMP for January 24, 2019, and $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124, is appropriate under relevant statutory and regulatory factors for determining the amount of CMPs.***

CMS imposed on Petitioner a one-day CMP of $16,044 for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124.

Although Petitioner appealed the amount and duration of the CMP, Petitioner's brief does not provide argument on these issues.  As explained below, I conclude that a one-day CMP of $16,044 for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, is appropriate.

When determining whether a CMP amount is appropriate, 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.  *See*42 U.S.C. §§ 1320a-7a(d)(2), 1395i-3(h)(2)(B)(ii)(I).  The absence of culpability is not a mitigating factor.  42 C.F.R. § 488.438(f).  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.  *See*42 U.S.C. §§ 1320a-7a(d)(1), (3), 1395i-3(h)(2)(B)(ii)(I).

The regulations leave the decision regarding the choice of remedy to CMS, and the amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at §§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within a particular range.  42 C.F.R. §§ 488.408, 488.408(g)(2); 498.3(d)(11); *see also* 42 C.F.R. § 488.438(e)(2) and (3); *Alexandria Place*, DAB No. 2245 at 27 (2009); *Kenton Healthcare, LLC*, DAB No. 2186 at 28-29 (2008).  However, unless a facility contends that a particular regulatory factor does not support the CMP amount, an ALJ must sustain it.  *Coquina Ctr.*, DAB No. 1860 (2002).  Further, CMS does not need to show that an SNF was not in substantial compliance on each day during which a remedy remains in effect; rather, the SNF bears the burden of showing that its noncompliance was of shorter duration than alleged by CMS.  *Owensboro Place & Rehab. Ctr.*, DAB No. 2397 at 12 (2011) (citing *Kenton Healthcare, LLC*, DAB No. 2186 at 24-25 and *Lake Mary Health Care*, DAB No. 2081 at 30 (2007)).

**Facility's History of Non-Compliance:**  Petitioner has an extensive history of noncompliance.  Petitioner has been cited during recertification surveys at a scope and severity of E or higher each year since 2014.  CMS Ex. 9 at 1-6.  Additionally, between the recertification surveys in April 2018 and January 2019, three complaint surveys found

**Page 27**

G- and J-level deficiencies, including the deficiencies at issue in this case.  CMS Ex. 9 at 1-2.  CMS provided evidence in the form of its Automated Survey Processing Environment (ASPEN) Enforcement Module (AEM) report.  The following is a list of G-level and J-level deficiencies for which remedies were imposed:4

G-level deficiency (actual harm) for Tag F-0686 (Treatment/Svcs to Prevent/Heal Pressure Ulcers) in 2018 (duration from July 23, 2018 to August 22, 20218) with a $18,336.50 CMP imposed (CMS Ex. 9 at 1);
	J-level deficiency (immediate jeopardy) for Tag F-0584 (Safe/Clean/Comfortable/Homelike Environment) in 2018 (duration May 25, 2018 to June 24, 2018) with a $26,627.90 CMP imposed (CMS Ex. 9 at 1);
	G-level deficiency (actual harm) for Tag F-0314 (Treatment/Svcs to Prevent/Heal Pressure Ulcers) in 2011 (duration February 08, 2011 to March 9, 2011) with a $4,663.46 CMP imposed (CMS Ex. 9 at 9);
	J-level deficiency (immediate jeopardy) for Tag F-0309 (Quality of Care) in 2008 (duration January 16, 2009 to February 14, 2009) with a $6,307.80 CMP imposed (CMS Ex. 9 at 11);
	G-level deficiencies (actual harm) for Tags F-0241 (Resident Rights/Exercise of Rights), F-0314 (Treatment/Svcs to Prevent/Heal Pressure Ulcers), and F-0324 (Accidents) in 2007 (duration April 2, 2007 to June 25,  2007) with a $23,200 CMP imposed (CMS Ex. 9 at 13);
	G-level deficiency (actual harm) for Tag F-0324 (Accidents) in 2006 (duration August 4, 2006 to September 2, 2006) with a $2,925 CMP imposed (CMS Ex. 9 at 13-14); and
	Three G-level deficiencies (actual harm) for Tag F-0324 (Accidents) in 2006 (duration April 13, 2006 to May 18, 2006) with a $3,600 CMP imposed and a DPNA imposed from May 14, 2006 to May, 18, 2006 (CMS Ex. 9 at 14).**Page 28**

This list shows Petitioner has an extensive history of serious noncompliance.  In total, Petitioner has paid over $85,000 in CMPs since 2006.  Therefore, Petitioner's history of noncompliance provides strong support for the CMP imposed.

**Scope and Severity of Deficiencies and Relationship Between Deficiencies:**This case involves an immediate jeopardy level deficiency related to sexual abuse of a resident by a facility employee.  This factor also provides strong support for the CMP imposed.

**Culpability:**  CMS argues that Petitioner has a high degree of culpability because staff failed to report allegations that should have raised suspicion of abuse.  CMS Br. at 29-30.  I find that Petitioner is very culpable because, in defiance of Medicare requirements, state agency policies, and its own abuse and reporting policies, the activity director failed to timely inform the administrator of Resident B's sexual abuse allegations.  Further, although the administrator reported the allegations of abuse to the police, she did not report Resident B's allegations or the results of the facility's investigation into Resident B's allegations to the state agency.  A failure to report abuse allegations hampers the ability of a facility to ensure its residents are free from abuse as it removes a deterrent to facility employees abusing residents and hinders the state agency from investigating allegations of abuse.  Petitioner's lack of compliance with reporting requirements placed all residents at risk for abuse and exploitation by facility employees and demonstrates indifference for resident safety.

Additionally, during the February 13, 2019 re-visit survey in this case, the state agency cited Petitioner with another deficiency at 42 C.F.R. § 483.12(c)(1) and (4) (Tag F609) (Reporting of Alleged Violations).  CMS Ex. 24 at 2-6.  Although CMS provided Petitioner with notice it could appeal this finding, Petitioner did not do so.  Therefore, this undisputed deficiency shows Petitioner's continued failure to comply with abuse reporting requirements.  This factor strongly supports the CMP imposed in this case.

**Financial Condition of the Facility:**  Petitioner presents no evidence of its financial condition.  Therefore, this is not a factor requiring further consideration.

**CMP Amount:**  As indicated by the review of factors above, a $16,044 one‐day CMP for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124 is well-supported.  The $16,044 CMP is in the middle range of the maximum permitted CMP and the $110 CMP is at the low end of the enumerated CMP range.  Therefore, based on the factors above and in consideration of the amounts imposed, the CMPs imposed are supported by the record.

**CMP Duration:**  CMS determined that Petitioner returned to substantial compliance on February 22, 2019.  CMS Ex. 8 at 1.  CMS submitted documentation of a state surveyor re-visit to Petitioner's facility, including findings of additional deficiencies in February 2019.  CMS Exs. 24-30.  Petitioner submitted a document showing that a survey

**Page 29**

conducted at the end of February resulted in no deficiencies (P. Ex 12), but this does not support a finding that Petitioner returned to compliance earlier than February 22, 2019.  Further, other than raising the issue in its hearing request, Petitioner did not set forth any specific arguments as to the duration of the CMP.  "[T]he facility bears the burden of showing that it returned to substantial compliance on a date earlier than that determined by CMS," and the DAB "has rejected the idea that CMS must establish a lack of substantial compliance during each day in which a remedy remains in effect."  *Owensboro Place & Rehab. Ctr.*, DAB No. 2397, at 12 (2011).  Petitioner has not met its burden of proof.  Therefore, I uphold the duration of the CMP.

VII.  Conclusion

I uphold CMS's initial determination that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1) and (4) and that a $16,044 one‐day CMP for January 24, 2019, and a $110 per‐day CMP for 28 days from January 25, 2019, through February 21, 2019, for a total CMP of $19,124, was a reasonable penalty.


          /s/
        Scott Anderson

                      Administrative Law Judge
      1. All citations to the Code of Federal Regulations are to the version in effect at the time of the survey unless otherwise indicated. back to note 1
                      2. CMS or the state agency designates the scope and severity level using a letter from A through L based on a scope and severity matrix published in the State Operations Manual, Ch. 7, § 7400.3.1 (Rev. 185, Eff. Nov. 16, 2018).  Levels A, B, or C indicate a deficiency that presents no actual harm but has the potential for minimal harm, which means the facility technically remains in substantial compliance.  42 C.F.R. § 488.301.  Levels D, E, or F indicate a deficiency that presents no actual harm but has the potential for more than minimal harm that does not amount to immediate jeopardy.  Levels G, H, or I indicate a deficiency that involves actual harm that does not amount to immediate jeopardy.  Finally, levels J, K, and L indicate a deficiency that constitutes immediate jeopardy to resident health or safety. back to note 2
                      3. CMS also alleges Petitioner failed to substantially comply with 42 C.F.R. § 483.12(a)(1).  CMS Ex. 10 at 1-6.  I need not decide whether Petitioner was in substantial compliance with 42 C.F.R. § 483.12(a)(1) because I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(c)(1) and (4) at the immediate jeopardy level, which is a sufficient basis, on its own, to fully support the CMPs that CMS imposed on Petitioner.  See Claiborne-Hughes Health Ctr. v. Sebelius, 609 F.3d 839, 847 (6th Cir. 2010); Carrington Place of Muscatine, DAB No. 2321 at 20-21 (2010). back to note 3
                      4. The report also references that CMS found Petitioner deficient, at the J-level (immediate jeopardy), for Tags F-0223, F-0225, and F-0226, which are all related to resident abuse, during a January 20, 2017 survey.  CMS Ex. 9 at 3.  After the parties filed submissions in this case, an ALJ issued a decision reversing these deficiencies.  See Lindberg Crossing Senior Living, DAB CR5560 (2020).  Civil Remedies Division records indicate that the ALJ's decision was appealed and is pending decision.  Because of the uncertain state of these deficiencies, I will not consider them in this decision. back to note 4 Back to top
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