Skyview Care and Rehab at Bridgeport, DAB CR5973 (2021)

DECISION

In this case, I consider the obligation of a skilled nursing facility (SNF) to thoroughly investigate and report allegations of exploitation.

For the reasons discussed below, I find that Petitioner, Skyview Care and Rehab at Bridgeport (Petitioner or facility), was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F602); 42 C.F.R. § 483.12(c)(1), (4) (Tag F609); and 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610).  Accordingly, the remedy imposed, a discretionary denial of payment for new admissions (DPNA), effective from January 29, 2020 through February 6, 2020, is reasonable.

I.     Background

 Petitioner is a SNF located in Bridgeport, Nebraska, and participates in the Medicare program.  On December 26, 2019, the Nebraska Department of Health and Human Services (NDHHS or state agency), completed a complaint investigation survey and found that Petitioner did not comply substantially with the following program participation requirements: 

• 42 C.F.R. § 483.12 (Tag F602) (scope and severity G);

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• 42 C.F.R. § 483.12(c)(1), (4) (Tag F609) (scope and severity D);
• 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610) (scope and severity D);
• 42 C.F.R. § 483.20(b)(2)(ii) (Tag F637) (scope and severity D);
• 42 C.F.R. § 483.20(g) (Tag F641) (scope and severity D);
• 42 C.F.R. § 483.20(e)(1)(2) (Tag F644) (scope and severity D); and
• 42 C.F.R. § 483.45(a)(b)(1)-(3) (Tag F755) (scope and severity E).

By letter dated January 14, 2020, the state agency notified Petitioner that, based on the complaint investigation completed on December 26, 2019, it was not in substantial compliance with Medicare program requirements, and,

As a result of the survey findings, a denial of payment for new admissions [DPNA] will be imposed effective January 29, 2020.  This action is based on the fact that deficiencies that constitute a level of actual harm or above were found on the current partial survey on December 26, 2019. 

CMS Ex. 9 at 2.  Additionally, Petitioner lost approval of its facility-based Nurse Aide Training & Competency Evaluation Program (NATCEP) for two years.  Id. 

In a letter dated February 25, 2020, CMS notified Petitioner that NDHHS revisited Petitioner’s facility on February 12, 2020 and established that Petitioner had returned to substantial compliance.  CMS Ex. 11.  “Consequently,” CMS noted, “we are removing the denial of payment for new admissions as of February 7, 2020.”  Id. 

Petitioner timely requested a hearing challenging the findings related to the following three allegations of noncompliance:NDHHS also placed the facility’s license on a 90-day probation and assessed a $1,000 fine on Petitioner for violating 175 NAC 12-006.05(9).  Although Petitioner included that fine and probation in its request for hearing, I do not have jurisdiction to hear and decide those issues.  See Civil Remedies Division (CRD) Docket No. 1, Request for Hearing; see also CMS Ex. 10.

• 42 C.F.R. § 483.12 (Tag F602, Free from Misappropriation/Exploitation) (scope and severity G);

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• 42 C.F.R. § 483.12(c)(1), (4) (Tag F609, Reporting of Alleged Violations) (scope and severity D); and
• 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610, Investigate/Prevent/Correct Alleged Violation) (scope and severity D).

See Civil Remedies Division (CRD) Docket No. 1, Request for Hearing.  Petitioner did not appeal the remaining deficiencies cited at Tag F637 (S/S D), Tag F641 (S/S D), Tag F644 (S/S D), and Tag F755 (S/S E).  As such, these violations are not subject to this appeal or decision.

An Acknowledgement and Prehearing Order (APHO) was issued by another Administrative Law Judge prior to the case being assigned to my docket.  Standing Orders included with the APHO directed the parties to submit proposed exhibits and written direct testimony for each of their proposed witness.  

The parties both filed pre‑hearing briefs (CMS Br. and P. Br.).  CMS submitted 12 exhibits (CMS Exs. 1-12), and Petitioner submitted 11 exhibits (P. Exs. A-I, K).  Although Petitioner’s list of exhibit states there are exhibits numbered P. Exs. A–K, there is no Ex. J.

The APHO with Standing Orders also stated that an in-person hearing would be necessary only if an opposing party requested an opportunity to cross-examine a witness.  APHO at 6-7.  See Heartflow, Inc., DAB No. 2781 at 17-18 (2017) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross-examine those witnesses).  Neither Petitioner, nor CMS requested an opportunity to cross-examine any witness.  Therefore, a hearing for the purpose of cross-examination of witnesses is unnecessary.  APHO at 6-7.  Neither party objected to the admission of any of the proffered exhibits, and, in the absence of any objections, I admit CMS Exs. 1-12 and P. Exs. A-I, K into the record.  The matter is ready for a decision on the merits. 

II.     Issues

The issues before me are:

1. Whether Petitioner failed to comply substantially with Medicare participation requirements; and
2. If the facility did not comply substantially with Medicare participation requirements, whether the remedy imposed is reasonable.

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III.    Jurisdiction

I have jurisdiction to hear and decide this case.  Social Security Act (Act) §§ 1128A(c)(2), 1819(h)(2)(B)(ii) (codified at 42 U.S.C. §§ 1320a-7a(c)(2), 1395(h)(2)(B)(ii)); 42 C.F.R. §§ 488.408(g), 488.434(a)(2)(viii), 498.3(b)(13).

Petitioner, in its brief, has argued that CMS failed to provide the facility its due process rights, and has violated Petitioner’s fifth and fourteenth amendment rights.  P. Br. at 12‑15.  I find that CMS provided Petitioner with timely notice as required by the regulations and the Act.  Petitioner timely requested a hearing as provided by those regulations and the Act.  To the extent that Petitioner’s arguments constitute requests for equitable relief, I have no authority to grant such relief.  US Ultrasound, DAB No. 2302 (2010).  I proceed to issue a decision based on my authority as stated.

IV.     Discussion

A.  Statutory and Regulatory Framework

The Act establishes requirements for SNF participation in the Medicare program.  The Act authorizes the Secretary of the U.S. Department of Health & Human Services (Secretary) to promulgate regulations implementing those statutory provisions.  Act § 1819 (42 U.S.C. § 1395i-3).  The Secretary’s regulations are found at 42 C.F.R. pt. 483.

A facility must maintain substantial compliance with program requirements in order to participate in the Medicare program.  To be in substantial compliance, a facility’s deficiencies may pose no greater risk to resident health and safety than “the potential for causing minimal harm.”  42 C.F.R. § 488.301.  A deficiency is a violation of a participation requirement established by sections 1819(b), (c), and (d) of the Act (42 U.S.C. § 1395i-3(b), (c), and (d)), or the Secretary’s regulations at 42 C.F.R. pt. 483, subpt. B.  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  42 C.F.R. § 488.301.  If the SNF fails to return to substantial compliance with program participation requirements within three months of being found not in substantial compliance, the Act requires that the Secretary deny payment for Medicare benefits for any beneficiary admitted after that thee-month date.  This is typically referred to as a mandatory or statutory DPNA.  See Act § 1819(h)(2)(D).  Additionally, the Act also grants the Secretary authority to “provide for other specified remedies, such as directed plans of correction” or a discretionary DPNA.  Act § 1819(h)(2)(B).

The Secretary contracts with state agencies to conduct periodic surveys to determine whether SNFs are in substantial compliance with the participation requirements.  Act § 1864(a) (42 U.S.C. § 1395aa(a)); 42 C.F.R. §§ 488.10, 488.20.  The Act and regulations require that facilities be surveyed on average every twelve months, and more

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often if necessary, to ensure that identified deficiencies are corrected.  Act § 1819(g)(2)(A) (42 U.S.C. § 1395i-3(g)(2)(A)); 42 C.F.R. §§ 488.20(a), 488.308. 

Regarding the specific participation requirements at issue in the present case, regulatory definitions are as follows:

Abuse is the willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical harm, pain or mental anguish.  Abuse also includes the deprivation by an individual, including a caretaker, of goods or services that are necessary to attain or maintain physical, mental, and psychosocial well-being.  Instances of abuse of all residents, irrespective of any mental or physical condition, cause physical harm, pain or mental anguish.  It includes verbal abuse, sexual abuse, physical abuse, and mental abuse including abuse facilitated or enabled through the use of technology.  Willful, as used in this definition of abuse, means the individual must have acted deliberately, not that the individual must have intended to inflict injury or harm.

Exploitation means taking advantage of a resident for personal gain through the use of manipulation, intimidation, threats, or coercion. 

Mistreatment means inappropriate treatment or exploitation of a resident.

Neglect is the failure of the facility, its employees or service providers to provide goods and services to a resident that are necessary to avoid physical harm, pain, mental anguish, or emotional distress.

42 C.F.R. § 483.5 (emphasis added).

B.  Findings of Fact, Conclusions of Law, and Analysis

Facility Policies

The facility had in place a written, but undated policy entitled, “ABUSE, NEGLECT, MISTREATMENT AND MISAPPROPRIATION OF RESIDENT PROPERTY.”  See CMS Ex. 13 (all caps in original).  This policy “encouraged” the reporting of “any suspected acts of abuse, neglect, exploitation, involuntary seclusion or misappropriation of resident property . . . .”

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The policy used “approved CMS definitions of abuse and neglect from the Draft State Operations Manual Appendix PP effective November 28, 2016.”  Petitioner’s policy defines exploitation as, “unfair treatment or use of a resident or the taking advantage of a resident for personal gain through the use of manipulation, intimidation, threats, or coercion.”  CMS Ex. 13 at 2.  That policy requires the facility to promptly investigate reports of any suspected misappropriation or exploitation.  CMS Ex. 13 at 7. 

Further, the policy indicates the facility will report allegations of abuse, including misappropriation or exploitation “per Federal and State law.”  CMS Ex. 13 at 7.  The policy mandates that violations of the policy must be reported immediately, but no later than 2 hours after the allegation is made if the event results in serious bodily injury, or no later than 24 hours after the allegation is made, if the event does not result in serious bodily injury.  CMS Ex. 13 at 10.  Violations of the policy must be reported to the administrator of the facility and to other officials, including the state survey agency and adult protective services.  Id. 

The facility’s Abuse/Neglect/Misappropriation Reporting Requirements policy, dated March 27, 2017, defined exploitation as:

[T]he wrongful or unauthorized taking, withholding, appropriation, conversion, control, or use of money, funds, securities, assets, or any other property of a vulnerable adult or senior adult by any person by means of undue influence, breach of a fiduciary relationship, deception, extortion, intimidation, force or threat of force, isolation, or any unlawful means or by the breach of a fiduciary duty by the guardian, conservator, agent under a power of attorney, trustee, or any other fiduciary of a vulnerable adult or senior adult.

CMS Ex. 13 at 13, 15-16; see also Neb. Rev. Stat. Ann. § 28-358 (West).

Resident 1

Resident 1 was admitted to the Petitioner’s facility on August 10, 2018.  CMS Ex. 6.  A Physician’s Determination of Capacity Form signed by a nurse practitioner on August 13, 2018, noted, “[t]his resident is mentally capable of making informed decisions.”  See CMS Ex. 1 at 2.  Resident 1 did not have any appointed power of attorney, guardian, or other court-appointed representative to manage his care or financial needs.  Id.  Resident 1’s admitting diagnoses included:  Wedge Compression Fracture of First Lumbar Vertebra; Hypothyroidism, Major Depressive Disorder; Adjustment Disorder with Mixed Anxiety; and Post Traumatic Stress Disorder (PTSD).  CMS Ex. 4 at 1; CMS Ex. 6.

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Shortly after Resident 1’s admission, there were behavioral issues noted in his nursing records and concerns arose as to his mental health and ability to make independent decisions.  CMS Ex. 3 at 1-25; CMS Ex. 6.

Resident 1’s Medical Records:

• Resident 1’s psychiatry notes, authored by Cristine Karell, APRN, and dated beginning August 13, 2018 through March 25, 2019, indicate a series of serious, escalating events.  CMS Exs. 2-3. 
• Psychiatry notes dated September 24, 2018, document that Resident 1 was “[p]aranoid that someone is going to hurt him[,]” “[h]ypervigilent” and experienced “bizarre perceptions.”  CMS Ex. 3 at 18;CMS Ex. 2 at 2. 
• Psychiatry notes dated October 8, 2018, document that Resident 1’s comments were “off the wall” and “not reality-based.”  Additionally, APRN Karell noted that Resident 1 would throw his soiled briefs on the floor, overflow the urinal, and refused to participate in assessments.  CMS Ex. 3 at 16;CMS Ex. 2 at 2. 
• Psychiatry notes dated November 12, 2018, document that Resident 1 was bedridden while waiting for an orthopedic consultation, however, the resident “[d]oes not call [for] assist to bathroom, lies in soiled brief” and still experiences anger outbursts.  CMS Ex. 3 at 14; CMS Ex. 2 at 2. 
• Psychiatry notes dated December 31, 2018, document that Resident 1 experienced, “[o]utbursts of negativity.  [At] times refuses to work with PT and staff.  Very upset that a confused resident came in his room.  He has significant mood swings.  Times of confusion and agitation.”  Additionally, Resident 1 “made inappropriate comments to staff . . . made other racial comments to other residents . . . [and] made physical threats to staff.”  CMS Ex. 3 at 12; CMS Ex. 2 at 2. 
• A behavioral observation report dated January 17, 2019, observed that Resident 1 used inappropriate and/or offensive comments.  CMS Ex. 12 at 2. 
• Psychiatry notes dated February 19, 2019, document that Resident 1 exhibited a serious uptick in behavioral incidents:

Staff reports [Resident 1’s] behaviors are getting out of control.  He has extreme reactions to minor problems. He assaulted a visitor this past weekend.  He is paranoid and believes the government has planted cameras in the facility to spy on people.  He blocked another resident in his room to

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“discuss” his concerns.  [Resident 1] yelled at the family of a resident that passed away for talking too loud.  He also tried to run over the foot of a family member using his wheelchair.

CMS Ex. 3 at 11; see CMS Ex. 2 at 2-3. 

• Psychiatry notes dated March 11, 2019, document that Resident 1, “is delusional, grandiose, believes he’s the most important person in facility, accuses others of lying, expects/demands to be served on demand immediately; easily angered and can get threatening; his thought process is verydiscombobulated . . . .”  CMS Ex. 3 at 9; CMS Ex. 2 at 3.
• Psychiatry notes dated March 25, 2019, document that APRN Karell performed a psychiatric evaluation and noted that Resident 1 “continues to be paranoid, accusatory, rude and irritable when interacting with others.  He gets very confrontational with others.”  Resident 1 also reported there was “a conspiracy against him” and “mental health professionals just want to use information he gives against him.”  Resident 1further reported that he was in the facility against his will and “doesn’t feel he should be here.”  CMS Ex. 3 at 7;CMS Ex. 2 at 3.
• On March 25, 2019, APRN Karell added the diagnosis of Delusional Disorder, noting that Resident 1 is “very delusional and won’t accept any information that is contrary to his delusional beliefs.”  She was concerned with Resident 1’s ability to make appropriate medical and financial decisions since he was unable to “realistically evaluate information” provided to him.  She provided her opinion and recommendation as:

It is my professional opinion that [Resident 1] is not capable [of] making safe medical decisions . . . and should have a guardian appointed to manage medical and financial affairs.  Additional testing would be beneficial, but given his acute psychotic and agitated state, he is unwilling/unable to participate in any assessments. 

CMS Ex. 3 at 5;CMS Ex. 2 at 3. 

• A June 6, 2019 Order Summary Report completed by Resident 1’s treating physician, noted that the resident “apparently is his own [power of attorney].”  CMS Ex. 12 at 4.
• A nursing note dated October 14, 2019, states that Resident 1 “remains delusional in his belief that he is awaiting the therapist assistant to bring him the deed to a farm that he purchased from him for a feral cat farm.”  CMS Ex. 5 at 5.

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• On October 22, 2019, three nursing notes were entered regarding Resident 1.  See CMS Ex. 5.  The first note, entered at 9:50 a.m., states that Resident 1 did not respond to knocking at his door, and, when the nurse came in, Resident 1 stated, “what the hell do you want . . . get the hell out of my room . . . .”  CMS Ex. 5 at 3.  The second note, entered at 2:03 p.m., states that Resident 1 entered Petitioner’s administrative offices to request his checkbook, “stating that he is buying a truck.”  CMS Ex. 5 at 2.  The third note, entered at 4:15 p.m., indicates that Resident 1 purchased a truck and stated he was planning on leaving the facility.  Id.  Management was alerted to Resident 1’s comment and responded that “[Resident 1] is his own person and can do as he wants. We can’t do anything to stop him.”  Id.
• A social work note dated October 23, 2019, states that Resident 1 cashed a check for $884.25, but refused to keep the money locked up safely.  CMS Ex. 5 at 1. 
• A nursing note dated October 24, 2019, states that “a large sum of money” was observed in Resident 1’s room.  CMS Ex. 5 at 1.  Resident 1 was “encouraged” to secure the money, but “continue[d] to refuse[,] stating it is my right.”  Id.
• On November 15, 2019, two behavior notes were entered regarding Resident 1’s escalating behavior.  CMS Ex. 5 at 6.  The first behavior note, entered at 8:42 a.m., indicates that Resident 1 “defecated in his brief and the removed the brief smearing BM all over himself and the bed.”  Id.  When the RN asked Resident 1 why he refused to use the bathroom, he stated, “[you’re] the nurse you tell me.”  Id.  The second behavior note, entered at 4:46 p.m., notes that Resident 1 indicated that he is a member of the ASPCA and “is turning [Petitioner] in for allowing the birds to be cold.”
• A nursing note entered on November 29, 2019, reports that Resident 1 was “very hostile and accusatory” that morning.  CMS Ex. 5 at 7.  The resident was referred to social services as a result of the conversation.  Id.
• On December 11, 2019, Tracy Ellis, NP, examined Resident 1.  CMS Ex. 5 at 4.  Notes from that visit state that Resident 1 was “delusional at [the] time of appointment[,]” rapidly changed topics, and was “unable to follow conversations for more than 2-3 minutes.”  Id.  Additionally, Resident 1 insisted he was “dying from agent orange and Round-Up poisoning[,]” and requested “to be sent to a state that participates in ‘assisted suicides.’”  Id.  NP Ellis added the diagnosis of Delusional Disorder to Resident 1’s chart and recommended a behavioral health consultation to evaluate Resident 1’s mental competency, PTSD, and delusional state.  Id.  The records do not reflect that this recommended testing, like the previous recommendation of March 2019, was performed.  See CMS Ex. 4.

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The October 22, 2019 Incident

A nursing note dated October 22, 2019, at 2:03 p.m. states that Resident 1 entered Petitioner’s administrative offices requesting his checkbook, “stating that he is buying a truck.”  CMS Ex. 5 at 2.  The note indicated the administrator attempted to convince Resident 1 not to make the purchase, but the attempted intervention was unsuccessful.  Id.  A nursing note dated 4:15 p.m. that same day, indicates, “[Resident 1] stating that he purchased a truck today and is planning on leaving in it and heading south with no plans of returning to the facility.  Management alerted to [Resident 1’s] comments in which reply was received with, ‘[Resident 1] is his own person and can do as he wants.  We can’t do anything to stop him.’”  Id.  (emphasis added). 

A Nebraska Purchase Contract dated October 22, 2019, shows Resident 1 purchased a new 2020 Chevrolet Silverado 1500 pickup truck for the total price of $54,909.00.  CMS Ex. 7 at 1.  To complete the sale, Resident 1 paid the dealership $22,434.91 by personal check.  Resident 1 was given $4,000 in rebates and incentives and received a trade-in value of $28,474.09 for his 2016 GMC Sierra 1500 extended cab pickup truck, with 3,501 miles on it.  Id.

Resident 1 purchased the new 2020 Chevrolet Silverado 1500 pickup truck with the assistance of “Person-A,” a car salesman.  See CMS Ex. 1 at 11.  “Person‑A” is listed on Resident 1’s Admission Record information sheet as a “responsible party” personal contact.  CMS Ex. 6. 

1.  Petitioner was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F602); 42 C.F.R. § 483.12(c)(1)(4) (Tag F609); and 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610).

The regulations and the Petitioner’s own policies require that allegations or incidences of possible abuse, neglect, misappropriation or exploitation be reported to the administrator or the Director of Nursing, and that the state agency be notified.  Thus, Petitioner was not in substantial compliance with 42 C.F.R. § 483.12 (Tag F602); 42 C.F.R. § 483.12(c)(1)(4) (Tag F609); and 42 C.F.R. § 483.12(c)(2)-(4) (Tag F610), because the facility failed to thoroughly investigate and report possible exploitation by an outside source.

Subsection 483.12(c) requires that, in response to allegations of abuse, neglect, exploitation, or mistreatment of residents, a facility must:

(1) Ensure that all alleged violations involving abuse, neglect, exploitation or mistreatment, including injuries of unknown source and misappropriation of resident property, are reported immediately, but not later than 2 hours after the allegation is

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made, if the events that cause the allegation involve abuse or result in serious bodily injury, or not later than 24 hours if the events that cause the allegation do not involve abuse and do not result in serious bodily injury, 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.

(2) Have evidence that all alleged violations are thoroughly investigated.

(3) Prevent further potential abuse, neglect, exploitation, or mistreatment while the investigation is in progress.

(4) 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 alleged violation is verified appropriate corrective action must be taken.

42 C.F.R. § 483.12(c)(1)‑(4).

In addition, subsection 483.12(b) provides that facilities must develop and implement written policies and procedures that:

(1) Prohibit and prevent abuse, neglect, and exploitation of residents and misappropriation of resident property,

(2) Establish policies and procedures to investigate any such allegations, and

(3) Include training as required at paragraph § 483.95.

42 C.F.R. § 483.12(b)(1)-(3).

Residents of a facility have the right to be free from misappropriation and exploitation.  42 C.F.R. § 483.12.  To that end, a facility must develop and implement written policies and procedures that prohibit mistreatment, abuse, neglect, misappropriation and exploitation of residents.  42 C.F.R. § 483.12(c).  It must ensure that all alleged violations are reported immediately to the facility administrator and appropriate state officials.  The facility must have evidence that all alleged violations are thoroughly investigated, and it

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must prevent further potential violations while the investigation is in progress.  The results of all investigations must be reported to the facility administrator (or designated representative) and to the appropriate state officials within 5 working days of the incident.  If the violation is verified, the facility must take appropriate action.  42 C.F.R. § 483.12(c)(1)-(4).

CMS argues that the Petitioner failed to report the potential exploitation of Resident 1 to the state agency.  CMS contends that it is significant that Petitioner’s administrator was aware of the potential purchase of a new vehicle by Resident 1 and failed to perform a thorough investigation.  Specifically, when the possible purchase was reported to the administrator by the nursing staff, the administrator replied that Resident 1 “is his own person and can do as he wants.  We can’t do anything to stop him.”  CMS Ex. 5 at 2.  CMS further notes that Petitioner’s administrator also verified that Resident 1 purchased the vehicle with the help of Person‑A, a car salesman.  Person‑A “was listed on the facility’s admission record as a “responsible party” for Resident 1.”  CMS Br. at 9; CMS Ex. 6.  However, despite the administrator’s concerns, there is no evidence that the incident was reported to the state agency or to adult protective services.  Indeed, Petitioner has confirmed that the facility did not identify the incident as suspicious or as possible exploitation of a vulnerable resident.  P. Br. at 7; see CMS Ex. 1 at 12. 

CMS further argues that Petitioner,

[H]ad knowledge Resident 1 was suffering from significant mental and behavioral health issues that left him in a vulnerable state, before, at the time of, and after he purchased the $54,000 brand new vehicle.  The documentation revealed, he was actively delusional, paranoid, and suffered from hallucinations.  Staff could not redirect him, and he lacked the ability to listen to information or professional advice from others.  Numerous facility records documented Resident 1’s mental and behavioral health issues.  For instance, Resident 1 had active delusions in which he believed he purchased farmland from a facility staff member to raise feral cats.

CMS Br. at 15; CMS Ex. 1 at 6-12. 

The failure to thoroughly investigate and report suspected exploitation of Resident 1 violates the requirements of the regulations and the Petitioner’s own policies to do so.  Petitioner’s “ABUSE, NEGLECT, MISTREATMENT AND MISAPPROPRIATION OF RESIDENT PROPERTY” policy required the facility to promptly investigate reports of any suspected misappropriation or exploitation.  CMS Ex. 13 at 7.  Additionally, Petitioner’s policy required it to report allegations of abuse, including misappropriation or exploitation “per Federal and State law.”  Id.  Further, any violations of the policy

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were required to be reported immediately, and no later than 24 hours after the allegation was made.  CMS Ex. 13 at 10.  The facility also had a March 27, 2017 Abuse/Neglect/Misappropriation Reporting Requirements policy, which further defined exploitation.  CMS Ex. 13 at 13, 15-16; see also Neb. Rev. Stat. Ann. § 28-358 (West). 

CMS notes that despite being allowed to purchase an expensive vehicle, Resident 1 “did not know if he had an active driver’s license.  He told several staff members he believed it was revoked.”  CMS Ex. 1 at 6-12.  The administrator also noted that Resident 1 likely could not safely operate a vehicle.  CMS Br. at 16; CMS Ex. 1 at 12.  CMS notes that Petitioner’s administrator initially attempted to prevent Resident 1 from writing the check, “but ultimately deferred to what he believed to be the resident’s choice.”  CMS Br. at 16; CMS Ex. 1 at 6-12. 

CMS argues that it is relevant that Petitioner’s administrator took the time to verify that Person-A had no legal authority to make decisions for Resident 1.  Person‑A, a salesman for the automobile dealer who was also listed on Resident 1’s contact sheet, stood to gain a significant commission from the vehicle sale.  CMS Br. at 16; CMS Ex. 1 at 6-12.  Despite this, the administrator confirmed that the facility neither conducted any investigation into the incident, nor forwarded any investigation to the state agency as defined in its facility abuse policies.  CMS Ex. 1 at 11-12.

Petitioner does not dispute that Resident 1 purchased a new vehicle.  Instead, Petitioner disputes that there was any exploitation and argues that the evidence shows that Resident 1 was competent to make independent medical and financial decisions, and he exercised that right when he made an independent financial decision to purchase the vehicle.  Petitioner further argues that Resident 1 received fair compensation for the vehicle he traded in and received a new asset in return.  Thus, Petitioner argues that because the facility determined that Resident 1 was competent to make his own medical and financial decisions, there was no exploitation.  Petitioner contends, because there was no exploitation, the facility did not have any incident to investigate or to report, and therefore remained in substantial compliance. 

In support of the argument that Resident 1 was competent, Petitioner relies, in part, on the unsworn declaration of NP Ellis.  In a signed statement dated December 27, 2019, NP Ellis states that she was involved in Resident 1’s care for the preceding four months, and notes:

[At] no time has [Resident 1] given me the impression that he is unable to make his own decisions.  [Resident 1] has been cooperative and alert and orientated to person, place, and time at each visit and able to make his needs known.

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In my professional opinion, [Resident 1] was able to make his own decisions over the last 4 months.  My most recent visit on 12/11/2019, was my first recommendation to re-evaluate [Resident 1’s] mental capacity.  

P. Ex. G. 

NP Ellis’s statement was not a sworn declaration made under the penalty of perjury.  CMS Ex. 5 at 4.  Additionally, Resident 1’s December 11, 2019 examination records, authored by NP Ellis, show that the resident was, “delusional[,]” rapidly changed topics, was “unable to follow conversations for more than 2-3 minutes[,]” insisted he was “dying from agent orange and Round-Up poisoning[,]” and requested “to be sent to a state that participates in ‘assisted suicides.’”  Id.  Further, the record shows that Resident 1’s behavioral issues had been escalating for weeks prior to the formal examination.  See CMS Exs. 4 at 1-3; 5 at 1-7.  The medical records at the time Resident 1 purchased the vehicle also indicate behavioral issues and delusions.  Thus, I give little weight to NP Ellis’s opinion regarding Resident 1’s competency at the time of the vehicle purchase. 

Petitioner also relies on a block form entitled Physician’s Determination of Capacity.  P. Ex. H.  The form, signed by John Post, MD on January 16, 2020, states that Resident 1 “remains mentally capable”.  Id.  This statement is not a sworn statement and does not provide an opinion as to Resident 1’s capacity at the time of the incident.  It also conflicts with many medical treatment notes showing that Resident 1 had behavioral issues and delusions.  Thus, I give little weight to this form regarding Resident 1’s competency at the time of the incident.

Petitioner also submitted progress notes from a mental health evaluation performed by Melody Leisy, APRN on January 17, 2020.  P. Ex. I at 1-3.  APRN Leisy stated that, in her professional opinion, Resident 1 was competent to purchase the vehicle.  This examination was performed three months after the incident.  I give little weight to APRN Leisy’s opinion, as it relates to Resident 1’s abilities the time he purchased the vehicle.  It is also inconsistent with the evidence in the record depicting Resident 1’s condition at the time of the purchase.  Further, APRN Leisy’s opinion that Resident 1 was competent is also inconsistent with NP Ellis’s statement that Resident 1 was delusional on a December 11, 2019 examination.

Petitioner submits a typed statement signed by Resident 1.  It is not a sworn statement made under penalty of perjury.  P. Ex. K at 1-2.  Little weight is given to that statement as it relates to Resident 1’s mental status and ability to make informed decisions at the time of the incident.  Further, it is Petitioner’s responsibility to thoroughly investigate and report any suspected abuse, neglect, misappropriation, or exploitation as required by the regulations and the facility policies.

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Petitioner also argues that it was not out of substantial compliance because Resident 1 “received fair market value for the pickup and above market value for his trade in” there was no evidence of “actual harm.”  P. Br. at 6.  To support this argument, Petitioner relies on its argument that Resident 1 was competent to make informed medical and financial decisions.  Id.  As indicated by the previous discussion, it was questionable if Resident 1 was fully capable of making his medical and financial decisions.  Certainly, the administrator had concerns related to Resident 1’s transaction, since he tried to persuade the resident to delay the purchase.  

Petitioner argues that Resident 1 received fair market value in the transaction.  However, even if Resident 1 received the fair market value for his transaction, that does not detract from the serious concerns about the resident’s capacity.  Indeed, Resident 1 did not know if he even had an active driver’s license.  The issue is not whether Resident 1 received fair market value in the transaction; it is whether there was possible misappropriation or exploitation of a vulnerable adult and whether Petitioner followed its own policy that required thorough investigation and reporting.

The regulations and Petitioner’s policy require that when allegations of abuse, neglect, misappropriation or exploitation are alleged or suspected, those allegations are to be thoroughly investigated and reported.  The fact that an agency later found there was no exploitation also does not justify Petitioner’s argument that an investigation and report were not required.  The Departmental Appeals Board (Board) in Cedar View Good Samaritan, noted:  

[T]he salient question is not whether any abuse in fact occurred or whether [the facility] had reasonable cause to believe that any abuse occurred, but whether there was an allegation that . . . gave rise to [the facility’s] duty under section 483.13(c)(2) to report the . . . incidents to the State agency, [the facility’s] arguments that it did not have reasonable cause to believe that any abuse occurred have no bearing on the ALJ’s finding that [the facility] violated this regulation.

DAB No. 1897 at 11-12 (2003); see also Britthaven, Inc.,DAB No. 2018 at 15 (2006); Grace Healthcare of Benton,DAB No. 2189 at 6 (2008).If a facility reasonably should have suspected abuse, neglect, or, as in this case, exploitation, then the facility must report that suspicion to the state agency, along with any investigation related to the suspected abuse, neglect, or exploitation.  See Bergen Reg’l Med Ctr., DAB No. 1832 at 13-14 (2002) (upholding an administrative law judge’s finding that the facility did not substantially comply with 42 C.F.R. § 483.13(c)(2)-(4) (redesignated as 42 C.F.R. § 483.12(c)(1)-(4)).

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Petitioner’s requirement to immediately and thoroughly investigate the potential exploitation of any resident was mandated by the regulations and by its own policy.  The record shows, and Petitioner clearly admits, that it did not thoroughly investigate the potential exploitation.  Nor did the facility investigate any suspected exploitation and make any report to the state agency as required by 42 C.F.R. § 483.12(c)(1), (4).  These failures allowed the exploitation of Resident 1, placing the resident at risk for more than minimal harm by the facility’s failure to substantially comply with 42 C.F.R. § 483.12(c)(1)-(4) (Tags F602, F609 and F610).

2.  Resident 1 suffered actual harm due to Petitioner’s noncompliance.

As previously discussed, Petitioner has argued that, because Resident 1 was competent to manage his own affairs, and did so by entering into a fair sales contract, there was no exploitation of Resident 1 to report, and, therefore, Resident 1 could not have suffered actual harm.  This argument is neither convincing, nor supported by the overwhelming evidence that there were significant questions as to Resident 1’s ability to manage his medical and financial affairs.  See CMS Ex. 3.  In an interview with the NDHHS surveyor, the administrator indicated that he was aware that Resident 1 was not competent to manage his affairs.  CMS Ex. 1 at 11-12.  Resident 1 wrote a personal check for $22,434.91 to complete the transaction, and no longer has those funds for his benefit, nor the asset traded to complete the sale.  Thus, actual harm to a resident occurred.

Therefore, I conclude that Petitioner failed to thoroughly investigate and report the possible exploitation of Resident 1 by an outside source.  Petitioner’s failure to thoroughly investigate and report the findings violated the regulations and its own policies.  I further conclude that Resident 1 suffered actual harm because of Petitioner’s noncompliance.  Accordingly, Petitioner did not comply substantially with 42 C.F.R. §§ 483.12, 483.12(c)(1)(4) and 483.12(c)(2)-(4).  Having concluded that Petitioner failed to comply substantially with Medicare participation requirements, I next consider whether the remedy imposed is reasonable.

3.  A discretionary DPNA is reasonable as a matter of law.

The Medicare provisions of the Act provide for the sanction of a DPNA where a facility has failed to comply with participation requirements.  “The Secretary may deny any further payments . . . with respect to all individuals entitled to benefits . . . in the facility or with respect to such individuals admitted to the facility after the effective date of the finding.”  42 U.S.C. § 1395i-3(h)(2)(B)(i); see also 42 C.F.R. § 488.417(a).  In situations where immediate jeopardy does not exist, “notice must be given at least 15 calendar days before the effective date of the enforcement action . . . .”  42 C.F.R. § 488.402(f)(4).  The notice must contain:  (i) the nature of the noncompliance; (ii) the remedy imposed;

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(iii) the effective date of the remedy; and (iv) appeal rights for the determination that led to the remedy.  42 C.F.R. § 488.402(f)(1)(i)-(iv). 

Petitioner argues that the remedy imposed upon the facility “is not reasonable because there was no harm.”  See Civil Remedies Division (CRD) Docket No. 1, Request for Hearing at 11; see also CMS Ex. 10.  The regulations “authorize CMS to impose a DPNA for any days on which a SNF is not in substantial compliance.”  Rosewood Care Ctr. of Rockford, DAB No. 2466 at 20 (2012); See 42 C.F.R. § 488.417(a).  Petitioner failed to investigate and report the potential exploitation as required by the Regulations and its own written policy.  That failure endangered a vulnerable resident.  The very act of noncompliance speaks to the seriousness of its inaction.  I find the facility culpable for its noncompliance, and the seriousness and culpability support the remedy imposed.  Thus, CMS had the authority to impose a discretionary DPNA from January 29, 2020, through February 6, 2020, because Petitioner failed to substantially comply with Medicare program participation requirements.

4.  Withdrawal of Petitioner’s eligibility to conduct NATCEP was required.

NDHHS had the right to withdraw Petitioner’s eligibility and/or approval to conduct NATCEP.  Under sections 1819(b)(5) and 1919(b)(5) of the Social Security Act, SNFs may only use nurse aides who have taken a state-approved training and competency program.  A state may not approve, and must withdraw any prior approval of an NATCEP offered by a SNF that:  (1) has been subject to an extended (or partial extended) survey under sections 1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act; (2) has been assessed a CMP of not less than $5,000; or (3) that has been subject to termination of its participation agreement, a DPNA, or the appointment of temporary management.  42 C.F.R. § 483.151(b)(2).  Because the DPNA was imposed based on the facility’s noncompliance with the Medicare requirements, the state agency was required under the Act to withdraw Petitioner’s eligibility and/or approval to conduct NATCEP for two years following the survey.

5.  Other issues raised by Petitioner are outside of the scope of my authority.

Petitioner also raises numerous Constitutional and statutory arguments and challenges to the validity of the Secretary’s regulations and the procedures and policies related to those regulations.  See P. Br. at 12-17.  Some of the challenges are rendered moot by this decision and others exceed my authority to resolve.  I have no authority to find invalid or refuse to follow statutes, regulations, or secretarial delegations of authority.  42 C.F.R. § 1005.4(c)(1); 1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).

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V.     Conclusion

For the reasons set forth above, I conclude that Petitioner returned to substantial compliance with program participation requirements effective February 7, 2020.  A discretionary DPNA was triggered on, and in effect from January 29, 2020, and through February 6, 2020.  The discretionary DPNA is reasonable as a matter of law.