SUBJECT: Cedar View Good Samaritan,

Petitioner,

Centers for Medicare & Medicaid Services.

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Cedar View Good Samaritan Center (Cedar View) appealed a January 23, 2003 decision by Administrative Law Judge (ALJ) Keith W. Sickendick sustaining the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a civil monetary penalty (CMP) upon Cedar View in the amount of $3,050 per day for the period August 24 through October 21, 1998. ⁽¹⁾ Cedar View Good Samaritan, DAB CR997 (2003) (ALJ Decision). CMS had imposed the CMP based on its determination that Cedar View was not in substantial compliance with program participation requirements and that conditions at Cedar View constituted immediate jeopardy to resident health and safety. The ALJ affirmed CMS's finding of noncompliance, but shortened the period for which the CMP was imposed by 10 days (through October 11 instead of October 21).

Our decision is based on the record before the ALJ as well as the parties' briefs on appeal from the ALJ Decision. As discussed more fully below, we find that the ALJ's findings of fact are supported by substantial evidence on the record as a whole. While we do not adopt the ALJ's conclusions of law in their entirety, we conclude that there is no error in the ALJ's ultimate conclusions that Cedar View was not in substantial compliance with Medicare participation requirements, that its deficiencies posed immediate jeopardy during the period August 24 through October 11, 1998, and that a $3,050 per day CMP was reasonable.

Background

Owned by Sumner County, Kansas and managed by the Evangelical Lutheran Good Samaritan Society (ELGSS), Cedar View is a certified provider of services, as both a skilled nursing facility (SNF) and a nursing facility (NF), under titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act (Act). The Kansas Department of Health and Environment (State agency) surveyed Cedar View from October 12-16, 1998. The survey was triggered by a report of resident abuse alleged to have been committed by a 16-year-old Certified Nurse Assistant (CNA). ⁽²⁾ The State agency recommended enforcement remedies based on two instances of possible abuse, alleged to have occurred on August 24 and October 8, 1998. Cedar View requested a hearing before an ALJ. The ALJ conducted an in-person hearing on January 29, 2002.

The ALJ Decision was based on the following 22 findings of fact and 23 conclusions of law:

A. FINDINGS OF FACT

1. Petitioner is owned by Sumner County, Kansas and is managed by the ELGSS.

2. Petitioner is certified to participate as a provider under Medicare and Medicaid (42 U.S.C. �� 302 - 1397jj) as a SNF and NF.

3. The State agency conducted a complaint survey of Petitioner's facility from October 12 to October 16, 1998, and found that Petitioner was not in substantial compliance and recommended enforcement remedies to CMS, based on two incidents which allegedly occurred on August 24, 1998 and October 8, 1998, and presented immediate jeopardy for Petitioner's residents.

4. CMS imposed a CMP of $3,050.00 per day for the period August 24, 1998 through October 21, 1998, finding Petitioner in substantial compliance as of October 21, 1998.

5. On August 24, 1998, the 16-year-old male Perpetrator, [footnote omitted] who was employed by Petitioner as a certified nurse assistant (CNA), was found by a nurse in the room of 82-year-old female Resident 7.

a. The Perpetrator's pants were part-way down.

b. The Perpetrator's pants had a wet spot in the crotch area.

c. The door to Resident 7's room was partially blocked by a wheelchair.

d. Resident 7 was naked from the waist down.

6. On January 21, 1999, the Perpetrator pled guilty to aggravated sexual battery of Resident 7.

7. The nurse who discovered the Perpetrator in Resident 7's room reported her observations to the Administrator on August 24, 1998.

8. On August 24, 1998, the Administrator interviewed the Perpetrator and advised him that he could no longer care for female residents without having a female staff member present.

9. On August 24, 1998, the Administrator had the Director of Nursing (DON) examine Resident 7 for signs of sexual abuse but none were found.

10. On August 24, 1998, the DON advised the Administrator that she would keep an eye on the Perpetrator.

11. On August 25, 1998, the Administrator announced at a management in-service training that male staff could only care for female residents with a female staff member present.

12. The Administrator did not report the August 25, 1998 [sic] incident to the State agency.

13. On October 8, 1998, the Perpetrator was discovered by a nurse assistant in the room of Resident 1.

a. The Perpetrator was on the bed of Resident 1.

b. The Perpetrator's pants were part-way down.

c. Resident 1 was on the bed and naked from the waist down.

14. On January 21, 1999, the Perpetrator pled guilty to aggravated sexual battery of Resident 1.

15. On Thursday, October 8, 1998, the incident involving Resident 1 was reported to the DON who was acting Administrator.

16. The DON suspended the Perpetrator from duty on October 8, 1998.

17. The DON examined Resident 1 and found no signs of sexual abuse.

18. On Monday, October 12, 1998, the Administrator reported the incident to the State agency.

19. On October 12, 1998, the Perpetrator terminated his employment with Petitioner.

20. The Perpetrator completed his CNA training at Petitioner's facility.

21. Petitioner did not check the various nurse registries in Kansas and other states prior to employing the Perpetrator.

22. The Administrator and DON were well acquainted with the Perpetrator and his family.

B. CONCLUSIONS OF LAW

1. Section 1819(g)(1)(C) of the Act and 42 C.F.R. � 483.13(c) establish a participating facility's duty to report and investigate all allegations of neglect or abuse or the misappropriation of the property of a resident of a facility.

2. There is no conflict between the specific reporting requirements of section 1819(g)(1)(C) of the Act, as implemented by 42 C.F.R. � 483.13(c), and the general reporting requirements of the Kansas law applicable in this case.

3. If staff is implicated in the abuse or neglect of a resident or the misappropriation of a resident's property, the Act and regulations require that the facility immediately notify the appropriate State agency which will conduct the investigation.

4. Staff is implicated if, after preliminary inquiry, there is a reasonable suspicion of involvement.

5. Reasonable suspicion, reasonable cause, or probable cause are essentially synonymous in this context and indicate that there is sufficient evidence to cause a reasonable person to believe that a charge is true.

6. Investigations of allegations of resident abuse or neglect or the misappropriation of resident property by staff must be done by the state pursuant to 42 C.F.R. � 488.335.

7. The facility must maintain documentation of its preliminary investigation and any more formal investigation conducted either by the facility or the State agency.

8. It may be inferred from repeated failures to comply with an existing written facility policy that the policy has not been implemented.

9. The Administrator had reasonable cause to believe that the Perpetrator committed a sexual assault or battery of Resident 7 on August 24, 1998.

10. The acting Administrator had reasonable cause to believe that the Perpetrator committed a sexual assault or battery of Resident 1 on October 8, 1998.

11. The Administrator did not immediately report the incident of August 24, 1998 to the State agency.

12. The acting Administrator did not immediately report the incident of October 8, 1998 to the State agency.

13. Petitioner violated 42 C.F.R. � 483.10(b)(11), F Tag 157, at a scope and severity level of G (actual harm but not immediate jeopardy), because the Petitioner failed to immediately notify the doctors and families of Residents 1 and 7 following the incidents on August 24 and October 8, 1998.

14. Petitioner violated 42 C.F.R. � 483.13(b), F Tag 223, at a scope and severity level K (immediate jeopardy), by failing to take appropriate action following the incident of August 24, 1998, and failing to protect its residents from sexual abuse.

15. Petitioner violated 42 C.F.R. � 483.13(c)(1), F Tag 224, at a scope and severity level K (immediate jeopardy), because, while the facility had developed a policy regarding resident abuse, the Administrator and DON failed to implement the policy in the case of the two incidents involving Residents 1 and 7.

16. Petitioner violated 42 C.F.R. � 483.13(c)(2) and (4), F Tag 225, at a scope and severity level K (immediate jeopardy), by failing to immediately report the incidents of August 24 and October 8, 1998, to the State agency.

17. Petitioner violated 42 C.F.R. � 483.75, F Tag 490, at a scope and severity level F (no actual harm but with potential for more than minimal harm), in that it failed to use its resources to attain or maintain the highest physical, mental and psycho-social well-being of each resident, by failing to ensure that Resident 1 was free of sexual abuse where Petitioner had reasonable cause to know of the potential for abuse after the incident of August 24, 1998 and failed to take reasonable steps to prevent abuse of Resident 1.

18. Petitioner did not violate 42 C.F.R. � 483.75(e) (5)-(7), F Tag 496, as Petitioner established by a preponderance of the evidence that the Perpetrator completed his CNA training at Petitioner's facility and Petitioner had no reason to believe that Petitioner might be listed on the register of another state.

19. Immediate jeopardy existed at Petitioner's facility from August 24, 1998 through October 11, 1998, the day prior to the Administrator's report to the State agency and the initiation of the complaint survey.

20. The CMS declaration that immediate jeopardy continued after the complaint survey began on October 12, 1998, was clearly erroneous.

21. A CMP of $3,050.00 per day is at the lowest end of the range of CMPs which may be imposed when immediate jeopardy is present.

22. A CMP of $3,050.00 per day for the period August 24, 1998 through October 11, 1998, is reasonable.

23. No enforcement remedy is appropriate for the period October 12, 1998 through October 21, 1998.

ALJ Decision at 2-7.

Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. Guidelines for Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's Participation in the Medicare and Medicaid Programs, http://wwww.hhs.gov/dab/guidelines/prov.html; see, e.g., Fairfax Nursing Home, Inc., DAB No. 1794 (2001), aff'd, Fairfax Nursing Home v. Dep't of Health & Human Srvcs., 300 F.3d 835 (7th Cir. 2002), cert. denied, 2003 WL 98478 (Jan. 13, 2003).

On appeal from the ALJ Decision, Cedar View took exception to Findings of Fact 3, 5, 7, 12, 13, 15, and 18 and Conclusions of Law 1-5, 9-17, 19, and 21-22. Cedar View Br. at 10, 27, 30-37, 39. Cedar View also made some arguments not related to specific findings or conclusions. Below, we discuss Cedar View's arguments and exceptions.

A. The ALJ's reliance on 42 C.F.R. � 483.13(c)(2) did not deprive Cedar View of due process.

The ALJ found that Cedar View violated 42 C.F.R. � 483.13(c)(2) and (c)(4) by failing to immediately report the incidents of August 24 and October 8, 1998, to the State agency. Conclusion of Law 16 (ALJ Decision at 6). Cedar View argued that, in the Statement of Deficiencies (SOD), the State agency charged it with violations of only the following regulatory provisions: 42 C.F.R. �� 483.10(b)(11); 483.13(b) and (c)(1)(i); and 483.75. According to Cedar View, the State agency did not charge it with violating 42 C.F.R. �� 483.13(c)(2) or (c)(4), nor "with any deficiency or noncompliance as to those subsections." Cedar View Br. at 7. Rather, Cedar View alleged that the ALJ "on his own" determined (in Conclusion of Law 16) that Cedar View violated those subsections and assessed the CMP based on these purported violations. Id.

Cedar View asserted that the ALJ's "unilateral" amendment of the SOD to include violations of sections 483.13(c)(2) and (c)(4) one year after the ALJ's hearing and some four years after completion of the State agency survey occurred without notice and in violation of its due process. Cedar View also contended that the ALJ's reliance on sections 483.13(c)(2) and (c)(4) was contrary to 42 C.F.R. �� 488.18(a) and 488.26(b), which require a state survey agency to document the nature and extent of specific deficiencies. Cedar View noted that the ALJ found that the deficiencies under sections 483.13(c)(2) and (c)(4) posed immediate jeopardy. In sum, Cedar View alleged that the ALJ's error tainted his entire analysis, "was highly prejudicial . . . not harmless and deprived Petitioner of substantial rights." Cedar View Br. at 8-9.

Contrary to Cedar View's argument, the ALJ did not unilaterally find deficiencies not cited in the SOD. The ALJ stated that "subsections 483.13(c)(2) and (4) are not specifically cited in the SOD." ALJ Decision at 9. However, as the ALJ noted further, the SOD contains a summary for F Tag 225 which cites "42 C.F.R. � 483.13(c)(1)(ii) Requirement: Staff Treatment of Residents." While not referencing by number subsections 483.13(c)(2) and (c)(4), the summary nonetheless quotes, verbatim, the language of those subsections. CMS Ex. 4, at 12. Additionally, in response to the SOD, under its "Credible Allegation of Compliance" for F Tag 225, Cedar View addressed the substance of the reporting requirement in section 483.13(c)(2), stating:

All incidents of unusual occurrences within the facility will be called in to the appropriate agencies and local law enforcement agencies will be notified if warranted immediately at the time of occurrence as per the policies and procedures of the facility. Investigations will be activated at the same time. . . .

Id.

The ALJ determined that the SOD provided adequate notice to Cedar View "even without the actual citation to those subsections . . . and there is no . . . prejudice to Petitioner in proceeding upon those alleged violations." ALJ Decision at 9. We agree. Cedar View was clearly on notice with its receipt of the SOD that the regulatory standards at 42 C.F.R. �� 483.13(c)(2) and (c)(4) were in issue. Accordingly, the ALJ's reliance on section 483.13(c)(2) and (c)(4) did not deprive Cedar View of due process. (As noted later, however, the reference to section 483.13(c)(4) in Conclusion of Law 16 is unnecessary since the ALJ did not in fact rely on that subsection.)

B. The ALJ did not err in finding that Cedar View failed to report the August 24 and October 8 incidents to the State agency in accordance with 42 C.F.R. � 483.13(c)(2).

Cedar View contended that the ALJ erred in concluding in Conclusion of Law 16 that it failed to report the August 24 and October 8 incidents to the State agency in accordance with 42 C.F.R. � 483.13(c)(2). That section states:

The facility must ensure that all alleged violations involving mistreatment, neglect, or abuse, including injuries of unknown source, and misappropriation of resident property are reported immediately to the administrator of the facility and to other officials in accordance with State law through established procedures (including to the State survey and certification agency).

Cedar View maintained that there was a plausible explanation-- other than that the CNA had sexually assaulted the residents-- for everything that was observed by its nurses on August 24 and October 8. Cedar View also pointed out that its examination of the residents after the incidents revealed no evidence of sexual abuse. In addition, Cedar View took the position that such abuse was unlikely to have occurred in light of the religious affiliation of the facility, its location in a small town, the disparity in ages between the teenage CNA and the elderly residents, and the fact that the CNA had worked at the facility over a period of years and his mother was an employee of, and his grandmother a resident in, the facility. Cedar View argued that, based on the facts available at the time, the Administrator and DON reasonably determined that there was no basis for reporting the incidents to the State agency. ⁽³⁾

There is no merit to Cedar View's arguments. The ALJ noted that a facility's duty to investigate and report allegations of violations of a resident's rights derives from section 1819(g)(1)(C) of the Act. ALJ Decision at 14. Examining the implementing regulations at 42 C.F.R. � 483.13, the ALJ stated in part:

Subsection 483.13(c) requires the development and implementation of facility policy that: (1) prohibits abuse, employment of individuals with a history of abuse, and requires reporting of unfitness for service of staff; (2) requires reporting of "all alleged violations" of the rights established by subsections (a) and (b); (3) requires that the facility have evidence that "all alleged violations" are thoroughly investigated; (4) requires that the results of any investigation be reported to the Administrator and to other officials within five working days of the incident.

ALJ Decision at 15 (emphasis in original). The ALJ then examined the regulatory history which provided:

Once the facility's preliminary investigation implicates staff, the facility is responsible for notifying the State survey and certification agency. If an incident appears to involve a criminal act, the facility is also responsible for notifying the appropriate law enforcement agencies.

Id. at 15-16, citing 56 Fed. Reg. 4884-43 (Sept. 26, 1991).

The ALJ continued his analysis noting:

The drafters of 42 C.F.R. � 483.13 recognized that when preliminary investigation by the facility implicates staff, then the state survey and certification agency must be notified - this requirement is based upon the plain language of section 1819(g)(1)(C) of the Act, which clearly provides that investigation of incidents involving staff will be done by the State agency.

Id. (emphasis in original).

The ALJ concluded this aspect of his analysis noting that a facility administrator's --

preliminary inquiry is only to determine whether there is an allegation of mistreatment, neglect, abuse, or misappropriation, and whether staff is implicated - not to determine whether the allegations are founded. If the allegation involves possible mistreatment or abuse and there is a reasonable suspicion staff is involved, reporting to the State agency is mandatory, whether or not the subsequent full investigation shows that the allegations were well-founded.

ALJ Decision at 19 (footnote omitted).

As the ALJ recognized, the salient question is not whether any abuse in fact occurred or whether Cedar View had reasonable cause to believe that any abuse occurred, but whether there was an allegation that facility staff had abused a resident. Here, Cedar View staff alleged facts that pointed to the possibility of abuse of a resident by another staff member on August 24 and October 8. Cedar View conceded that the nurse's observations on August 24 on their face "might raise a suspicion of possible misconduct." Cedar View Br. at 20. Cedar View further stated that "the occurrence on October 8 did not necessarily point to sexual abuse," thus admitting that such abuse was a distinct possibility. Id. at 21. Moreover, the Administrator and DON treated the incidents as allegations of abuse and conducted investigations of the incidents, including examining the residents for sexual abuse. Since the allegations of abuse themselves gave rise to Cedar View's duty under section 483.13(c)(2) to report the August 24 and October 8 incidents to the State agency, Cedar View's arguments that it did not have reasonable cause to believe that any abuse occurred have no bearing on the ALJ's finding that Cedar View violated this regulation. ⁽⁴⁾

Cedar View further argued, however, that the reference in section 483.13(c) to "State law" incorporates state law in this area. Cedar View asserted that, under Kansas law, a facility is required to report an incident to the State agency only when the facility has reasonable cause to believe that a resident has been abused. Cedar View maintained that in light of the facts available to it at the time as well as the subsequent exoneration of its Administrator and DON in criminal proceedings, there was no basis for finding that Cedar View violated State law and thus no basis for finding that it did not comply with section 483.13(c)(2). Moreover, according to Cedar View, the ALJ's analysis of the standard for when reporting is required is confusing and inconsistent. According to Cedar View, in Conclusion of Law 1, the ALJ determined (erroneously) that a facility's duty to report is governed by 42 C.F.R. �� 483.13(c)(2)and (c)(4) rather than Kansas law. Cedar View argued that Conclusion of Law 1 is contradicted by Conclusion of Law 2, in which the ALJ found no conflict between the reporting requirement of section 483.13(c) and the applicable Kansas law. In addition, Cedar View asserted, the ALJ in fact applied Kansas law, although Cedar View argued that his finding that Kansas law required Cedar View to report the incidents in question was erroneous. According to Cedar View, the ALJ articulated the appropriate tests for application of Kansas law in Conclusions of Law 3, 4 and 5, but failed to correctly apply them.

Contrary to what Cedar View argued, the ALJ clearly concluded that the reporting requirement in the Act and regulations takes precedence over Kansas law. The ALJ addressed Cedar View's argument that the reference to state law in sections 483.13(c) means that federal law incorporates state law, stating in part:

The legislative history of 42 C.F.R. � 483.13(c)(2) and (4) at 56 FR 48844 (Sept. 26, 1991) makes clear that when the facility investigates an allegation which does not involve staff, the intent of the reference to state law, which appears in both subsections, is that reports to state agencies (including the state survey and certification agency) will be done in accordance with the procedures specified in state law. This interpretation is consistent with the absence of such procedures for reporting in the federal regulations. It is also consistent with the fact that section 1819(g)(1)(C) of the Act (42 U.S.C. � 1395i-3(g)(1)(C)) imposes upon the states the duty to establish the process for reporting and investigation even absent regulations from the Secretary (section 1819(g)(1)(E)). Reporting of both the allegations (42 C.F.R. � 483.13(c)(2)) and the results of investigation (42 C.F.R. � 483.13(c)(4)) is obligatory. I find no authority for the proposition that the duty established by section 1819(g)(1)(E) of the Act to immediately report an allegation of a staff violation of resident rights to the Administrator and State survey agency is overridden by a different state reporting requirement. In this case, the applicable Kansas statute specifies that the investigation of any allegation of abuse of a resident will be done by the Department of Health and Environment (the State survey and certification agency) or the Department of Social and Rehabilitation Services. Kansas Statute Annotated (K.S.A.) 39-1404.

ALJ Decision at 17 (footnote omitted). Thus, the ALJ concluded that the regulations incorporate state law not with respect to the obligation to report in the first instance but merely with respect to the procedures to be followed once a report of alleged abuse is made. Even if the language of the regulations is ambiguous on this point, the preamble provided Cedar View with notice of the interpretation on which the ALJ relied. Moreover, there is no evidence that Cedar View relied on another interpretation of the regulations in determining its obligation at the time of the incidents.

The ALJ also found in Conclusion of Law 2 that the federal and state reporting requirements are not inconsistent. The ALJ stated more specifically in the text of his decision that "[i]t is not inconsistent for the federal statute and regulation to require an immediate report in the specific instance when nursing home staff is implicated, even though the state statute seemingly allows mandatory reporters to delay and assess whether they have 'reasonable cause' and not report at all if they do not." ALJ Decision at 20. Contrary to what Cedar View argued, however, this in no way constitutes a conclusion that only the more limited reporting requirement in state law applies. ⁽⁵⁾

We therefore affirm Conclusions of Law 1 and 2. We note that Conclusion of Law 16 contains an unnecessary reference to section 483.13(c)(4), which requires that the results of investigations of allegations of abuse be reported to the State agency. The ALJ did not consider whether Cedar View had violated this provision. We therefore modify that conclusion of law to delete the reference to section 483.13(c)(4) and also to more clearly state the requirements of section 483.13(c)(2), so that Conclusion of Law 16 now reads as follows:

16. Petitioner violated 42 C.F.R. � 483.13(c), F Tag 225, at a scope and severity level K (immediate jeopardy), by failing to immediately report allegations that residents were abused by facility staff in incidents on August 24 and October 8, 1998, to the State agency.

The ALJ further found that there was reasonable cause to believe abuse had occurred, so that the Kansas statute "if construed to be applicable" would also have required Cedar View to report the allegations of abuse. ALJ Decision at 21. In making this finding, however, the ALJ did not determine that Kansas law governed here instead of federal law, but simply that reporting would have also been required under Kansas law if it were applicable. This determination is dicta, since the ALJ did not rely on it. In any event, we find no error in the ALJ's conclusion that Cedar View had reasonable cause to believe that the two residents in question had been abused in some way by the CNA. Noting that "Kansas statutes do not define reasonable cause," the ALJ relied cited Black's Law Dictionary (7^th Ed.), which he said "explains that reasonable cause is the same as probable cause, i.e., a suspicion sufficiently strong to warrant a reasonable man to believe that a charge is true or, more commonly, a reasonable suspicion." ALJ Decision at 21. The ALJ concluded that the undisputed facts regarding the August 24 and October 8 incidents were sufficient to establish reasonable cause as so defined. See id. at 21-22. We find nothing in Cedar View's arguments that persuades us that the ALJ's analysis of this issue is wrong. Accordingly, we affirm Conclusions of Law 9 and 10.

Cedar View's arguments nevertheless raise a legitimate question as to Conclusions of Law 3-5. Together, these conclusions appear to state that there must be probable cause to believe that facility staff committed an act of abuse in order to trigger the reporting requirement in section 483.13(c)(2). It is clear from the decision as a whole that this is not what the ALJ intended. We therefore modify Conclusion of Law 3 as follows and delete Conclusions of Law 4 and 5 as unnecessary to the decision:

3. If there is an allegation of abuse or neglect of a resident or the misappropriation of a resident's property that involves staff of the facility, the Act and regulations require that the facility immediately notify the appropriate State agency which will conduct the investigation.

C. The ALJ did not err in finding that Cedar View failed to implement its policy on reporting.

The ALJ found that Cedar View violated 42 C.F.R. � 483.13(c)(1), which requires a facility to "develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident property." ALJ Decision at 6 (Conclusion of Law 15) and 25. Cedar View's policy provided in pertinent part:

Alleged or suspected violations involving any mistreatment, neglect, or abuse including injuries of unknown source, will be reported immediately to the facility administrator and to other officials in accordance with State law.

CMS Ex. 19. The ALJ concluded specifically (1) that the Administrator and DON failed to implement this policy by not immediately reporting the two incidents in question and (2) that this failure is a sufficient pattern to show that the facility policy was not fully implemented. Cedar View disputed these conclusions. According to Cedar View, "[t]here were no alleged or suspected violations to report under the policy." Cedar View Br. at 31. Cedar View continued: "Since there was no duty to report, petitioner did not fail to implement its policy." Id.

Cedar View's argument has no merit. Cedar View's policy tracks the language of section 483.13(c)(2). We explained earlier in this decision why the ALJ properly found that there was an allegation of abuse that was required to be reported pursuant to section 483.13(c)(2). For the same reasons, reporting was required under Cedar View's policy. Accordingly, we conclude that the ALJ did not err in determining that Cedar View failed to implement its policy. We therefore affirm Conclusion of Law 15.

D. The ALJ did not err in finding that Cedar View failed to ensure that its residents were free from abuse.

The ALJ found that Cedar View violated 42 C.F.R. � 483.13(b) "by failing to take appropriate action following the incident of August 24, 1998, and failing to protect its residents from sexual abuse." Conclusion of Law 14 (ALJ Decision at 6). Section 483.13(b) states:

Abuse. The resident has the right to be free from verbal, sexual, physical, and mental abuse, corporal punishment, and involuntary seclusion.

Citing a prior ALJ decision, the ALJ stated that "[a] facility is deficient under 42 C.F.R. � 483.13(b) if it knows or should know that a potentially abusive event may occur and it does not take reasonably necessary steps to prevent it from happening." ALJ Decision at 24, citing Oakwood Manor Nursing Center, DAB CR818 (2001). ⁽⁶⁾ The ALJ found that "after the August 24, 1998 incident, Petitioner had sufficient evidence so that the Administrator either knew or should have known that some remedial action was reasonably necessary to prevent any similar incident of abuse by the Perpetrator in the future." ALJ Decision at 24. The ALJ concluded that the remedial action taken by the Administrator, directing that male staff may not care for a female resident without female staff present, "was wholly inadequate." Id.

In arguing that the ALJ erred in concluding that Cedar View failed to comply with section 483.13(b), Cedar View first argued that CMS failed to prove, and the ALJ failed to find, that any resident had been sexually abused. Cedar View did not, however, dispute the ALJ's findings that the CNA "pled guilty to aggravated sexual battery" of Resident 7 on August 24, 1998, and Resident 1 on October 8, 1998. Findings of Fact 6 and 14 (ALJ Decision at 3-4). (While Cedar View sought to discount the significance of the pleas by stating that they were was based only on the CNA's intent in touching the residents, intent was an element of the crime.) In any event, as indicated above, the ALJ did not purport to base his conclusion on a finding that sexual abuse actually occurred, but rather on a finding that Cedar View knew or had reason to know that "a potentially abusive event may occur." Cedar View did not argue that the ALJ's interpretation of the regulation to require such a finding was erroneous. ⁽⁷⁾

Cedar View also disputed the ALJ's findings that it had knowledge or reason to know that "a potentially abusive event may occur" and that the action it took after the August 24 incident to prevent abuse was inadequate. Cedar View's assertion that it lacked such knowledge or reason to know is hardly credible in light of its claim that after August 24 its Administrator directed that female staff accompany male staff caring for female residents and that the CNA be monitored. Cedar View had no reason to take these steps unless it believed there was a potential for abuse.

Moreover, there is substantial evidence in the record to support the ALJ's finding that Cedar View's remedial action was inadequate. The fact that the CNA was found alone with Resident 1 on October 8 clearly indicates that Cedar View was neither enforcing a policy of not allowing male staff to care for female residents unless female staff are present nor adequately monitoring the CNA. ⁽⁸⁾

We therefore affirm Conclusion of Law 14.

E. The ALJ did not err in finding that there was immediate jeopardy to the two residents.

The ALJ found that Cedar View's noncompliance with 42 C.F.R. �� 483.13(b), 483.13(c)(1), and 483.13(c)(2) posed immediate jeopardy and that "[i]mmediate jeopardy existed at petitioner's facility from August 24, 1998 through October 11, 1998, the day prior to the Administrator's report to the state agency and the initiation of the complaint survey." Conclusions of Law 14, 15, 16, and 19 (ALJ Decision at 6-7). Immediate jeopardy is defined at 42 C.F.R. � 488.301 as--

a situation in which 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.

Cedar View contended that CMS did not prove and the ALJ did not find serious injury, harm, impairment, or death caused by its alleged noncompliance. Specifically, Cedar View noted that the ALJ found that "no signs of sexual abuse were found as to either resident." Cedar View Br. at 33, citing Findings of Fact 9 and 17. Further, Cedar View challenged the ALJ's determination that immediate jeopardy existed after the CNA's suspension on October 8, since it was undisputed that the CNA never returned to the facility after his suspension.

Cedar View's arguments have no merit. The procedural regulations governing this type of appeal provide that CMS's finding that a deficiency is at the immediate jeopardy level must be upheld unless "clearly erroneous." 42 C.F.R. � 498.60(c). Contrary to what Cedar View'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 Cedar View's noncompliance with the requirements of section 483.13 posed immediate jeopardy. Cedar View's failure to immediately report an allegation of sexual abuse was likely to cause serious harm to Cedar View'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. Similarly, Cedar View's failure to implement a policy to prevent sexual abuse or to take steps to prevent sexual abuse from occurring was likely to cause serious harm to Cedar View's residents because it increased the likelihood that sexual abuse might occur in the future, causing actual harm. Thus, we see no basis for concluding that the ALJ should have found CMS's determination of immediate jeopardy to be clearly erroneous.

Moreover, we conclude that the ALJ properly determined that immediate jeopardy continued following the CNA's departure until the October 8 incident was reported. Consistent with Findings of Fact 16 and 19 (that the CNA was suspended from duty on October 8 and terminated on October 12), the ALJ acknowledged that the CNA "was removed from the facility and access to female residents" on October 8. ALJ Decision at 27. However, the ALJ further stated that it is necessary-

to focus upon the conduct of Petitioner and whether Petitioner took proper action to end the risk of harm to its residents. As a general rule, deficiencies are considered to continue until such time as the facility shows that they are abated. 42 C.F.R. �� 488.402, 488.410, 488.412, 488.440, 488.454. The regulation establishes the requirement that the petitioner report an allegation of abuse by facility staff to the State agency, but the undisputed evidence is that this was not done until October 12, 1998. Therefore, I conclude that immediate jeopardy continued at least through October 11, 1998, the day prior to Petitioner's report to the state agency and the initiation of the complaint survey.

Id. We find no error in this analysis. There is no dispute that Cedar View 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 Cedar View suspended the CNA who was linked to the incident in question does not establish that Cedar View had corrected conditions that could lead to sexual abuse by other facility staff. Indeed, Cedar View 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. Moreover, since the CNA was not terminated until October 12, there was no assurance that the CNA would not be reinstated. Thus, CMS was not clearly erroneous in determining that Cedar View's noncompliance continued to pose immediate jeopardy notwithstanding the suspension of the CNA.

Accordingly, we affirm the ALJ's determinations in Conclusions of Law 14, 15, 16, and 19 regarding the existence and duration of immediate jeopardy.

CMS also challenged the ALJ's determination concerning the duration of immediate jeopardy. In its brief responding to Cedar View's appeal, CMS argued that the ALJ erred in finding clearly erroneous CMS's determination that immediate jeopardy continued from October 12 through 21 (Conclusion of Law 20, ALJ Decision at 20, 28). We conclude that CMS failed to make a timely request for Board review of this issue. The regulation at 42 C.F.R. � 498.82 provides that any party dissatisfied with an ALJ decision may file a request for review of the decision and must file its request within 60 days from receipt of the notice of decision or dismissal, unless the party shows good cause to extend the time. Under 42 C.F.R. � 498.82(a)(2) (incorporated by � 498.22(b)(3)), CMS is presumed to have received the January 23, 2003 ALJ Decision on January 28. Accordingly, CMS should have filed a request for review by March 31 (the Monday after the 60^th day, which fell on a Saturday). Even if CMS's brief was filed on the date it bears, April 25, 2003, it was 25 days late. Since no request for review of this issue was submitted within the prescribed period and no good cause for an extension of time was shown by CMS, we must dismiss CMS's cross-appeal as untimely under 42 C.F.R. � 498.83(a). See Carmel Convalescent Hospital, DAB No. 1584, at 6, n.6 (1996).

F. The ALJ erred in finding that Cedar View failed to immediately notify the two residents' doctors and families as required by 42 C.F.R. � 483.10(b)(11).

The ALJ concluded that Cedar View violated 42 C.F.R. � 483.10(b)(11) because it failed to immediately notify the doctors and families of Residents 1 and 7 following the incidents on August 24 and October 8. ALJ Decision at 6 (Conclusion of Law 13), 22-23. Section 483.10(b)(11), captioned "Notification of changes," states in pertinent part:

(i) A facility must immediately inform the resident; consult with the resident's physician; and if known, notify the resident's legal representative or an interested family member when there is -

* * * *

(B) A significant change in the resident's physical, mental or psychosocial status (i.e., a deterioration in health, mental, or psychosocial status in either life-threatening conditions or clinical complications).... ⁽⁹⁾

The ALJ stated that--

[t]he deficiency exists here because the Administrator and DON were aware of allegations of abuse of Residents 1 and 7 by a staff member and there was enough evidence to cause a reasonable suspicion that the misconduct did occur. If Residents 1 and 7 were subject to abuse, there was clearly a change in their circumstance with potential adverse effect upon their physical and mental health. Thus, it was necessary and appropriate under the regulation to contact both the families and doctors of the affected residents.

ALJ Decision at 22-23.

Cedar View took the position that the ALJ erred in concluding that it had failed to comply with section 483.10(b)(11). Cedar View argued in part that "[t]here is absolutely no evidence of any change in the physical or mental health of either resident." Cedar View Br. at 35.

We agree with Cedar View that the ALJ's findings do not support a conclusion that Cedar View violated section 483.10(b)(11). The regulation requires that a facility notify a resident's doctor and family "when there is" a "significant change" in the resident's status (emphasis added). This language does not require a facility to notify the doctor or family of the possibility or even the likelihood that a resident's status has changed. Thus, Cedar View was not required to give such notice unless a change in status had occurred. It is undisputed that Cedar View's examination of the residents after the August 24 and October 8 incidents revealed no physical evidence of sexual abuse. Regardless of whether any physical injury in fact occurred, it is conceivable that a nursing home resident may suffer a change in status from abuse or even from a perception that he or she was being abused or threatened with abuse. However, CMS did not point to any evidence in the record regarding either resident's reaction to the incidents in question. Thus, there is no basis for finding that Cedar View violated the regulation. ⁽¹⁰⁾

Accordingly, we reverse Conclusion of Law 13.

G. The ALJ did not err in finding Cedar View failed to use its resources to attain or maintain the highest physical, mental, and psychosocial well-being of the two residents, as required by 42 C.F.R. � 483.75.

The ALJ found that Cedar View violated 42 C.F.R. � 483.75 in that it failed to use its resources to attain or maintain the highest physical, mental and psychosocial well-being of each resident "by failing to ensure that Resident 1 was free of sexual abuse where Petitioner had reasonable cause to know of the potential for abuse after the incident of August 24, 1998 and failed to take reasonable steps to prevent abuse of Resident 1." Conclusion of Law 17 (ALJ Decision at 6). Section 483.75 states in relevant part:

A facility must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident.

* * * * *

(b) Compliance with Federal, State, and local laws and professional standards. The facility must operate and provide services in compliance with all applicable Federal, State, and local laws, regulations, and codes, and with accepted professional standards and principles that apply to professionals providing services in such a facility.

The regulation also includes specific requirements in other areas, including licensure, training, registry verification, in-service education, staff qualifications, provision of laboratory, radiology and other diagnostic services, and clinical records. 42 C.F.R. � 483.75(a), (c)-(p).

The ALJ explained his conclusion that Cedar View violated this regulation as follows:

The language of section 483.75 is such that any failure of management which adversely affects a resident constitutes a violation. Further, any violation of federal or state law or professional standards constitutes a violation of section 483.75(b). The Administrator's failure to take proper action in the face of the sexual battery of Residents 1 and 7 violated the regulations and State law.

ALJ Decision at 25 (footnote omitted).

Cedar View contended that there is no evidence "that the facility was not properly administered" or that the residents' "well-being suffered in any manner." Cedar View Br. at 37. Thus, Cedar View argued, it did not violate any of the specific requirements listed in section 483.75. Cedar View also asserted that the ALJ "disregarded the fact that in August and October, there was no evidence of sexual battery," so that the ALJ incorrectly stated that the Administrator failed to take proper action "in the face" of sexual battery. Id. at 36.

Cedar View's arguments have no merit. The ALJ's determination that "any failure of management that adversely affects a resident constitutes a violation" of section 483.75 is consistent with our holding in Asbury Center at Johnson City, DAB No. 1815 (2002), where we wrote:

As the ALJ noted, the administrative deficiency is a derivative deficiency based on findings of other deficiencies. We agree with the ALJ that, where a facility has been shown to be so out of compliance with program requirements that its residents have been placed in immediate jeopardy, the facility was not administered in a manner that used its resources effectively to attain the highest practicable physical, mental, and psychosocial well-being of each resident.

DAB No. 1815, at 11; see also Odd Fellow and Rebekah Health Care Facility, DAB No. 1839 (2002). We have found above that the ALJ properly determined that Cedar View violated the Medicare participation requirements at section 483.13(b), section 483.13(c)(1) and 483.13(c)(2), and that these violations posed immediate jeopardy. The same evidence that supports these deficiency findings also supports the ALJ's conclusion that Cedar View failed to comply with the administration requirement. Moreover, Cedar View's noncompliance with these regulations violates the requirement in section 483.75(b) that a facility provide services in compliance with federal regulations.

We agree with Cedar View, however, that the ALJ's use of the phrase "in the face of sexual misconduct" was improper. As discussed above, Cedar View's failure to report allegations of sexual misconduct was the basis for finding it out of compliance with 42 C.F.R. � 483.13(b), (c)(1) and (c)(2). However, this error does not affect the ALJ's ultimate conclusion in Conclusion of Law 17 that Cedar View was out of compliance with section 483.75. Accordingly, we affirm that conclusion of law.

H. Imposition of the CMP is not barred by the double jeopardy clause of the U.S. Constitution or by the principles of res judicata or collateral estoppel.

Cedar View argued that the case against it should be dismissed with prejudice since the same issues were addressed in a prior State proceeding. According to Cedar View, on December 22, 1998 the State agency imposed a CMP of $43,200 (subsequently reduced to $10,000) on Cedar View based upon the incidents at issue here. Cedar View asserted that CMS's imposition of a CMP subjected Cedar View to double jeopardy and is barred by res judicata and collateral estoppel. ⁽¹¹⁾

The double jeopardy clause of the U.S. Constitution provides that no "person [shall] be subject for the same offense to be twice put in jeopardy of life or limb." U.S. Const. Amend. V. The purpose of the CMP in question here is remedial, not punitive. See 42 C.F.R. � 488.402 (purpose of remedies specified in section 488.406 is "to ensure prompt compliance with program requirements"). The Board and courts have previously held that the imposition by the Inspector General of another type of sanction (program exclusion) which is also remedial in nature does not violate the double jeopardy clause. See, e.g., Susan Malady, R.N., DAB No. 1816 (2002), at 8, citing Greene v. Sullivan, 731 F.Supp. 838 (E.D. Tenn. 1990). Further, the double jeopardy clause is not applicable where, as here, the alleged "punishments" are imposed by two different sovereigns such as a state and the federal government. Malady at 8-9, citing Abbate v. United States, 359 U.S. 187 (1959). Moreover, since neither an ALJ nor the Board has authority to declare a federal statute or regulation unconstitutional, even if we were to conclude the imposition of the CMP here violated the double jeopardy clause, we could not reverse the ALJ Decision on that basis. Cf. Malady at 8.

Moreover, there is no evidence that Cedar View was involved in a state civil or criminal prosecution based on the incidents in question here. Cedar View simply noted that it was subject to a State-imposed CMP. At a minimum, the absence of any type of prior judicial proceeding on the issues raised here would preclude Cedar View's successful reliance on the affirmative defenses of res judicata or collateral estoppel. ⁽¹²⁾

I. The CMP amount imposed by the ALJ is reasonable.

The ALJ concluded that a CMP of $3,050 per day is at the lowest end of the range of CMPs which may be imposed when immediate jeopardy is present (Conclusion of Law 21) and that a $3,050 per day CMP for the period August 24, 1998 through October 11, 1998 is reasonable (Conclusion of Law 22). ALJ Decision at 7, 28.

Cedar View took the position that the CMP imposed by the ALJ, totalling $149,450, is unwarranted. Cedar View argued in part that a $3,050 per day CMP is not the lowest CMP which may be imposed when immediate jeopardy is present since 42 C.F.R. � 488.408(e) authorizes the imposition of a $1,000-$10,000 CMP "per instance of noncompliance." This argument has no merit. The regulations authorizing CMS to impose a per instance CMP were not effective until May 17, 1999 (see 64 Fed. Reg. 13354 (March 18, 1999)), after CMS notified Cedar View of the imposition of the CMP in November 1998. Thus, CMS had no authority to impose a lower per day CMP in this case. Accordingly, we uphold Conclusion of Law 21 and 22 without regard to the other arguments advanced by Cedar View in support of its position (including its request to submit new evidence in support of its financial condition). See Milpitas Care Center, DAB No. 1864, at 18, citing 42 C.F.R. � 488.408(e).

J. Cedar View advanced no valid basis for finding that the challenged Findings of Fact were not supported by substantial evidence in the record.

As noted earlier, Cedar View took exception to Findings of Fact 3, 5, 7, 12, 13, 15, and 18. Cedar View objected to the statement in Findings of Fact 5, 7, and 13 that the CNA was "discovered" or "found" in the rooms of Residents 7 and 1. Cedar View stated that "[i]n reality, [the CNA] had the right to be in the rooms and was required to be there as part of his employment as a CNA at the Facility." Cedar View Br. at 9-10. Nothing in the wording of the findings suggests otherwise, however. Cedar View also appeared to object to the ALJ's use of the word "incidents" in Findings of Fact 3, 12, 15, and 18 to refer to what facility staff reported to the Administrator and DON occurred on August 24 and October 8. Cedar View stated that "the alleged 'incidents' were never substantiated." Id. at 10. The use of the word "incidents" does not suggest that what was reported was substantiated, however.

Cedar View did not advance any other basis for its exceptions to the findings of fact identified above. Accordingly, we conclude that all of these findings were supported by substantial evidence.

Conclusion

For the reasons stated above, we uphold the ALJ's determination imposing a CMP in the amount of $3,050 per day for the period August 24 through October 11, 1998. We affirm all of the ALJ's Findings of Fact. We do not adopt his Conclusions of Law in their entirety, however, but instead reverse Conclusion of Law 13, delete Conclusions of Law 4 and 5, and modify Conclusions of Law 3 and 16 to read as follows:

3. If there is an allegation of abuse or neglect of a resident or the misappropriation of a resident's property that involves staff of the facility, the Act and regulations require that the facility immediately notify the appropriate State agency which will conduct the investigation.

16. Petitioner violated 42 C.F.R. � 483.13(c), F Tag 225, at a scope and severity level K (immediate jeopardy), by failing to immediately report allegations that residents were abused by facility staff in incidents on August 24 and October 8, 1998, to the State agency.

Judith A. Ballard

Donald F. Garrett

Cecilia Sparks Ford
Presiding Board Member

1. CMS was previously named the Health Care Financing Administration (HCFA). See 66 Fed. Reg. 35,437 (July 5, 2001).

2. There is no dispute as to the CNA's identity. ALJ Decision at 3, n.2. The ALJ and CMS referred to this individual as "the Perpetrator." Cedar View identified him by name. We refer to him as the CNA.

3. While arguing that it had no duty to report the October 8 incident, Cedar View appeared to suggest that it had complied with section 483.13(c)(2) by reporting the incident on October 12. Cedar View noted that the weekend of October 10-11 was a holiday and that the Administrator reported the incident the following morning. However, the regulation requires that allegations of abuse be reported "immediately." Cedar View did not offer any explanation for why the DON (who was acting for the Administrator during her absence) could not have reported the incident on October 8 or, at the latest, October 9. Accordingly, we affirm Conclusion of Law 12 (ALJ Decision at 6), in which the ALJ found that the acting Administrator (the DON) "did not immediately report" the October 8 incident to the State agency. We also affirm Conclusion of Law 11 (ALJ Decision at 6), in which the ALJ found that the Administrator "did not immediately report" the August 24 incident to the State agency, since Cedar View did not provide any basis for its exception to this conclusion other than that there was nothing to report.

4. The ALJ nevertheless determined in Conclusions of Law 9 and 10 that there existed reasonable cause to believe that the CNA committed sexual battery or assault of Residents 7 and 1 on August 24 and October 8, respectively. As we discuss later, although not necessary to the decision, these conclusions provide additional support for the ALJ's decision to uphold the CMP.

5. The ALJ pointed out that the Kansas statute is "much broader" than the Act and regulations in the sense that the State reporting requirement applies to entities in addition to skilled nursing facilities such as Cedar View. ALJ Decision at 20. However, the Kansas statute is more limited than federal law with respect to the circumstances under which reporting is required, i.e., only when there is reasonable cause to believe that abuse has occurred, as opposed to when abuse has merely been alleged.

6. The ALJ's formulation of what is required by section 483.13(b) is not inconsistent with the Board's statement in Beverly Health and Rehabilitation Center-Williamsburg, DAB No. 1748 (2000) (cited in Oakwood) that "a finding of noncompliance with section 483.13(b) on its face implies a failure (deliberate or negligent) by a facility to protect a resident from abuse, i.e., from a willfully inflicted injury resulting in harm (physical or mental)." Beverly at 6.

7. The ALJ stated elsewhere that "CMS has clearly met its prima facie case" by showing that the CNA made these guilty pleas and was employed by Cedar View. ALJ Decision at 24. We view this statement, which is inconsistent with the ALJ's reliance on the criteria in Oakwood, as harmless error.

8. The ALJ Decision suggests that remedial action other than the two steps identified here might have been necessary. ("A thorough investigation would have allowed for a more informed and reasoned judgment as to necessary remedial action." ALJ Decision at 24.) We need not reach that question, however.

9. The regulation lists five other circumstances in which notification is required. 42 C.F.R. �� 483.10(b)(11)(i)(A), (C) and (D), and 483.10(b)(11)(ii)(A) and (B). However, they are not germane here and the ALJ did not rely on them.

10. This case is distinguishable from Georgian Court Nursing Home, DAB No. 1866 (2003), where the Board upheld the ALJ's determination that the facility had violated section 483.10(b)(11) by not notifying the resident's physician that the resident had been accidentally injured during an attempted transfer. In that case, the Board stated that the facility was not "absolved from compliance with the notification regulation if the employee who causes the injury does not share that information with other facility employees." DAB No. 1866, at 19. While an employee's knowledge of an accident that occurred in the performance of his duties can reasonably be ascribed to his employer, an employee's knowledge that he committed a crime cannot.

11. Before the ALJ, Cedar View argued only that "[t]he Court should find that these issues were addressed in the prior proceedings and dismiss this case." Post-Hearing Br. at 19. The ALJ stated that "Petitioner has presented no authority, and I am aware of none for the proposition, that I am bound by either the state court's dismissal of criminal charges or the state administrative actions in the circumstances of this case." ALJ Decision at 25, n.11.

12. Collateral estoppel is "an affirmative defense barring a party from relitigating an issue determined against that party in an earlier action. . . ." Blacks Law Dictionary 7^th Ed. (1999) at 256. Res judicata is "an affirmative defense barring the same parties from litigating a second lawsuit on the same claim, or any other claim arising from the same transaction or series of transactions and that could have been - but was not - raised in the first suit. . . ." Id. at 1312.