In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16-3368
ROSEWOOD CARE CENTER OF SWANSEA,
Petitioner,
v.
THOMAS E. PRICE, Secretary of the United States Depart-
ment of Health & Human Services, et al.,
Respondents.
____________________
Petition for Review of an Order of the
Department of Health & Human Services.
No. 2721
____________________
ARGUED APRIL 7, 2017 — DECIDED AUGUST 22, 2017
____________________
Before POSNER, RIPPLE, and SYKES, Circuit Judges.
RIPPLE, Circuit Judge. Rosewood Care Center is a skilled
nursing facility participating in Medicare and Medicaid. The
Centers for Medicare and Medicaid Services assessed a civil
monetary penalty against Rosewood on the grounds that it
had failed to protect a resident from abuse, failed to timely
report or to investigate thoroughly allegations of abuse, and
2 No. 16-3368
failed to implement its internal policies on abuse, neglect, and
misappropriation of property. CMS determined that these de-
1
ficiencies placed residents in “immediate jeopardy.” After a
hearing before an Administrative Law Judge, both the ALJ
and, later, the Department Appeals Board affirmed the $6,050
per day penalty imposed by CMS. Rosewood now seeks re-
2
view of that penalty. It contends that the $6,050 per day pen-
alty cannot be imposed because substantial evidence does not
support CMS’s immediate jeopardy determination. For the
reasons set forth in the following opinion, we conclude that
substantial evidence supports the Agency’s findings and
therefore deny the petition.
I
BACKGROUND
A.
Rosewood is a skilled nursing facility, see 42 U.S.C.
§ 1395i-3(a); 42 C.F.R. § 488.301, participating in Medicare and
Medicaid as a provider. Because our analysis of this case re-
quires an understanding of the regulatory landscape for
skilled nursing homes in the Medicare/Medicaid programs,
we begin with a thumbnail summary of the pertinent regula-
tory structure.
The Secretary of Health and Human Services enforces the
statutory and regulatory provisions governing nursing
homes operating in the Medicare/Medicaid network through
1 42 C.F.R. § 488.301.
2 Our jurisdiction is premised on 42 U.S.C. § 1320a-7a(e).
No. 16-3368 3
an agency within the Department, the Centers for Medicare
and Medicaid Services (“CMS”). On the basis of contracts
with the Secretary, state health agencies conduct surveys of
nursing homes to determine whether they are in compliance
with federal regulations. See 42 U.S.C. § 1395i-3(g). These sur-
veys are conducted by state health professionals, who are spe-
cially trained for this particular task and who are guided by
various federal forms and procedures in their inspections.
When the deficiencies detected during a survey “pose no
greater risk to resident health or safety than the potential for
causing minimal harm,” CMS will consider the nursing home
to be in “substantial compliance.” 42 C.F.R. § 488.301. On the
other hand, when CMS determines that a nursing home is not
in substantial compliance, it may impose various enforcement
remedies, including the imposition of civil monetary penal-
ties, such as the ones at issue in this litigation.
There are two ranges for civil monetary penalties. CMS
imposes the higher range for deficiencies constituting “imme-
diate jeopardy.” Id. § 488.438(a)(1)(i). Immediate jeopardy ex-
ists when the nursing home’s non-compliance “has caused, or
is likely to cause, serious injury, harm, impairment, or death
to a resident.” Id. § 488.301. By contrast, the lower range is for
violations that do not cause immediate jeopardy, but that “ei-
ther caused actual harm, or caused no actual harm, but have
the potential for more than minimal harm.” Id.
§ 488.438(a)(1)(ii).
To facilitate the survey and certification process, CMS’s
State Operations Manual organizes the regulations governing
nursing homes in categories called “tags.” The deficiencies
discovered during a survey are set out in the survey findings
4 No. 16-3368
by use of these tag numbers. Each tag is assigned an alphabet-
ically denominated category according to its severity and
scope, from “A” to “L” (minor to major). The severity of the
breach is defined by one of four categories: “[i]mmediate
jeopardy to resident health or safety”; “[a]ctual harm that is
not immediate jeopardy”; “[n]o actual harm with a potential
for more than minimal harm, but not immediate jeopardy”;
“[n]o actual harm with a potential for minimal harm.” Id.
§ 488.404(b)(1). The scope of the violations also is indicated by
one of three categories: “isolated,” “pattern,” or “wide-
spread.” Id. § 488.404(b)(2). CMS’s State Operations Manual
summarizes this entire categorization scheme in the following
chart:
ASSESSMENT FACTORS USED TO DETERMINE
THE SERIOUSNESS OF DEFICIENCIES MATRIX[3]
Immediate jeopardy to resi- J K L
dent health or safety
Actual harm that is not imme- G H I
diate
No actual harm with potential D E F
for more than minimal harm
that is not immediate jeopardy
No actual harm with potential A B C
for minimal harm
Isolated Pattern Widespread
3 We have adapted this chart to remove information that is not relevant to
Rosewood’s appeal. See CMS, State Operations Manual: Ch. 7—Survey and
Enforcement Process for Skilled Nursing Facilities and Nursing Facilities, avail-
able at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manu-
als/Downloads/som107c07.pdf; see also Bryn Mawr Care, Inc. v. Sebelius, 749
F.3d 592, 594 (7th Cir. 2014).
No. 16-3368 5
B.
With this regulatory structure in mind, we turn to the par-
ticular circumstances of the case now before us. Here, survey-
ors of the Illinois Department of Public Health (“IDPH”) con-
ducted a survey of Rosewood. During their inspection, the
state surveyors identified several violations of Medicare and
Medicaid regulations that they believed justified the imposi-
tion of civil monetary penalties. The state health department
may recommend penalties to CMS. The civil monetary pen-
alty imposed here was based on a May 28, 2014 recommenda-
tion from the IDPH. Specifically, CMS imposed the penalty
because of a series of failures in Rosewood’s care observed
during a state survey that, in its view, amounted to noncom-
pliance at the immediate jeopardy level. At issue in this ap-
peal are three specific citations: F 223, F 225, and F 226. In Tag
F 223, the surveyors determined that the facility repeatedly
failed to protect a resident, R34, from physical, mental, or ver-
bal abuse. In Tag F 225, the surveyors found that the facility
failed to investigate thoroughly incidents of abuse and failed
to report timely allegations of abuse involving three residents,
R34, R6, and R28. In Tag F 226, the surveyors stated that the
facility failed to operationalize its Abuse Prevention Policy for
incidents involving the same three residents, R34, R6, and
4
R28.
We next will examine the factual bases for these tags and
then describe each of the tags based on those facts.
4Residents, facility employees, and others interviewed as part of the sur-
vey process are identified by numbers for privacy concerns.
6 No. 16-3368
1. Resident 6
R6 and his wife (“Z4”) alleged that he had been mentally
abused. Z4 said that when R6 was coming out of physical
therapy, an unknown female staff member “put her hands on
his cheeks and kissed him on one side then the other, then
5
kissed [R6’s] forehead and said ‘I have always loved you.’”
She stressed that R6 knew “the difference between a caring
6
kiss and someone who is trying to ‘really kiss’ him.” Z4 re-
ported this incident to the facility administrator, Ken Ka-
bureck, prior to the state survey. Z4 could not identify the
staff member who allegedly had kissed her husband or the
therapy staff member present at the time. She did say, how-
ever, that the incident had occurred on May 2, 2014.
Kabureck started his investigation of the incident upon re-
ceipt of the complaint from Z4. Specifically, Kabureck inter-
viewed members of the therapy staff who worked on May 2,
2014. No staff member remembered any such incident. Ka-
bureck also interviewed residents who resided on that hall.
The residents did not recall any such incident; they also stated
that they were not the object of any advances from staff. Based
on this investigation, Kabureck concluded that he had no ev-
idence which supported Z4’s account of the incident. Notably,
Kabureck did not interview R6 because R6 could not identify
the person who kissed him. Nor did he formally interview Z4.
Kabureck stated that he did not report this incident to the
5 A.R. at 445.
6 Id.
No. 16-3368 7
IDPH because there was no evidence that the incident had oc-
curred.
Z4, believing Rosewood had addressed her concerns inad-
equately and that Rosewood was “covering up this ‘harass-
7
ment,’” contacted the IDPH on May 8. This contact prompted
the survey of Rosewood. On May 14, during the survey and 12
days after the incident was alleged to have taken place, Kabureck
first reported the allegation to the IDPH. Two days later, he
submitted a follow-up report. It included written statements
from multiple staff members, who all said that they had not
seen anyone kiss R6. It did not include a statement from R6,
although the report indicated that he was alert and able to tes-
tify. The report only said that R6 had indicated that the person
who kissed him was not wearing white.
On May 24, 2014, Kabureck sent a second follow-up re-
port, having discovered that a facility nurse actually had
kissed R6. A registered nurse for the facility indicated that she
had kissed R6 on the forehead while he was walking in the
therapy hall with a walker and a therapist. She explained that
she had had a long talk with Z4 regarding R6’s medical his-
tory immediately after R6’s admission to the facility. Approx-
imately a week later, the facility’s physical therapist ap-
proached her and requested that she talk to R6 and encourage
him to leave his bed for physical therapy. The nurse did speak
with R6, and he indicated that he would try therapy out of
bed in the therapy room. The nurse then documented that in-
teraction in R6’s nursing log, dated April 28, 2014. Approxi-
mately a week later, the nurse saw R6 in the therapy hall
7 Id. at 446.
8 No. 16-3368
walking with a walker while accompanied by a therapist. The
nurse kissed R6 on the forehead and told him, “You are doing
8
a great job!” The nurse recounted that R6 smiled, but did not
say anything. The nurse also stated that R6 was not upset by
the interaction. As before, this supplemental report contained
no statement from R6.
When the IDPH surveyors, Christiane VonRonnakirk and
Teresha Viverette, conducted the survey, they interviewed
multiple staff members, R6, and his wife, Z4. R6 said that a
staff person kissed him on both cheeks and said “I really[,]
9
really love you.” He said that he was shocked and that it
made him very uncomfortable. Z4 said that she reported the
incident to Kabureck and that he had said that he would look
into it. Later, however, Z4 also stated that Kabureck later told
her that “he didn’t know who did it and wasn’t gonna inves-
10
tigate it.” Kabureck told the surveyors that he remembered
R6’s wife coming to talk to him and that she was upset. He
said that he had asked physical therapy staff about the inci-
dent and that they did not know anything. He did not talk to
R6 because, as he told Surveyor VonRonnakirk, he believed
that R6 made up the incident.
2. Resident 34
While the surveyors were investigating the abuse com-
plaint concerning R6, the IDPH received a report concerning
8 Id. at 538 (internal quotation marks omitted).
9 Id. at 471 (internal quotation marks omitted).
10 Id. at 474.
No. 16-3368 9
R34, a 92-year-old man with end-stage dementia. This pa-
tient’s records indicated that he was severely cognitively im-
paired and needed assistance from two staff members for all
activities, including showers and transfers.
According to CNA Emily Schmidtling, on the evening of
May 12, 2014, at approximately 7:30 p.m., another CNA, Tara
Schlesinger, was showering R34, and “told him to sit the f--k
down several times. Then [CNA Schlesinger] said oh my f--
11
king God why do I always get your shower.” As R34’s room-
mate (“R38”) later described the events, “I remember hearing
them yelling—talking loudly. [R34] was standing up and the
[CNA] was trying to make him sit down. I don’t know if she
cursed or not, but she was not happy because he wasn’t sit-
12
ting—it was a lot of commotion for a shower.”
After the shower, CNA Schlesinger put R34 to bed with
assistance from CNA Schmidtling. After putting R34 to bed,
R34 had a bowel movement and, in the subsequent process of
cleaning the patient and the bed, CNA Schlesinger tried to roll
R34 over in bed, but was unsuccessful. CNA Schlesinger said
that she then used the “draw sheet method” to move R34. Ac-
cording to CNA Schlesinger, during this process, R34 rolled
close to the edge of the bed, but did not fall out or complain
of any pain. CNA Schmidtling stated that “when [CNA Schle-
singer] turned him over[,] [CNA Schlesinger] shoved him so
hard he almost rolled off [the] bed and [CNA Schlesinger] had
13
to grab him back.” At that point, CNA Schmidtling went
11 Id. at 518.
12 Id. at 470.
13 Id. at 486.
10 No. 16-3368
down the hall to tell the licensed practical nurse on duty of
the occurrence. The licensed practical nurse, Jennifer Schmid-
tling, did not respond, and CNA Schmidtling returned to
providing care.
LPN Schmidtling stated she did not think the allegation
“held any merit because these two aid[e]s ha[d] been snipping
and sniping about each other behind each other’s backs for
14
the better part of three weeks.” She explained that “[t]he
girls were complaining against each other about [not] helping
15
[with] [R34]’s care.” She said that she went and viewed R34
a few minutes later and that he appeared fine. LPN Schmid-
tling did not tell anyone about the allegation or take
CNA Schlesinger off-duty pending an investigation.
On the evening of May 15, 2014, CNA Schmidtling re-
peated her allegation to a registered nurse, Jennifer Haukap,
telling her that “another CNA[,] Tara[,] was overly rough
[and] cursed [at] [R34]” and “nearly rolled [him] off [the]
16
bed.” RN Haukap recalled that CNA Schmidtling “said she
told nurses that were working that night[,] but nothing hap-
17
pened.” The next afternoon, RN Haukap repeated what
CNA Schmidtling had told her to the Assistant Director of
Nursing, who directed her to tell the administrator, Kabureck.
14 Id. at 521.
15 Id. at 485.
16 Id. at 484.
17 Id. at 520.
No. 16-3368 11
After an investigation, Rosewood concluded that CNA Schle-
singer had verbally abused R34, terminated her employment,
and reported her to the state Nurse Aide Registry.
3. Resident 28
On December 27, 2013, R28’s family reported to facility
staff that rings owned by R28 were missing. At the time, R28
was in hospice and family members from out of state were
visiting. The family of R28 reported the missing rings on Fri-
18
day, December 27, 2013. Kabureck began his investigation of
the missing rings on Monday, December 30, 2013, and a re-
port was sent to the IDPH that day. The investigation in-
cluded searching linen and the resident’s room for the miss-
ing rings. Staff statements also were taken, and the local po-
lice were notified. A follow-up report was sent to the IDPH
19
on January 3, 2014. The IDPH did not investigate this inci-
dent prior to the May 2014 survey. R28 died at the facility on
December 30, 2013.
C.
We now examine how CMS charged the deficiencies after
the IDPH survey. Rosewood was cited for three deficiencies
at the “immediate jeopardy” level: F 223 was at the “J” level,
18 Id. at 320.
19 Id. at 523–34.
12 No. 16-3368
for an “isolated” scope; and F 225 and F 226 were both at the
20
“L” level, for a “widespread” scope.
Tag F 223 found a violation of 42 C.F.R. § 483.13(b) and 42
C.F.R. § 483.13(c)(1)(i). These regulatory provisions, set out in
21
the margin, provide, in pertinent part, that the patient has
the right to be free from physical, verbal, or mental abuse.
CMS’s finding of a violation centered on the treatment of R34
and, as noted above, was categorized as a category J violation
since it was isolated in scope, but placed the patient in imme-
diate jeopardy of health and safety.
The F 225 tag found a violation of 42 C.F.R. § 483.13(c)(2)–
22
(4). These provisions, set out in the margin, require that all
20See 42 C.F.R. §§ 488.406 (listing remedies) and 488.408 (categorizing
remedies). See supra Part I.A.
21 42 C.F.R. § 483.13(b)–(c)(1)(i) provides:
(b) Abuse. The resident has the right to be free from ver-
bal, sexual, physical, and mental abuse, corporal punish-
ment, and involuntary seclusion.
(c) Staff treatment of residents. The facility must develop
and implement written policies and procedures that pro-
hibit mistreatment, neglect, and abuse of residents and mis-
appropriation of resident property.
(1) The facility must—
(i) Not use verbal, mental, sexual, or physical abuse, cor-
poral punishment, or involuntary seclusion[.]
22 42 C.F.R. § 483.13(c)(2)–(4) provides:
(2) The facility must ensure that all alleged violations in-
volving mistreatment, neglect, or abuse, including injuries
No. 16-3368 13
allegations of mistreatment, neglect, or abuse at the nursing
facility be reported immediately to the administrator of the
facility and to other officials as required by state law. These
provisions further provide that the nursing facility undertake
an immediate investigation to prevent further abuse while the
investigation is in progress. This tag, at the “L” level, alleged
that, with respect to R34, R6, and R28, Rosewood staff had
failed to make timely reports to the administrator and to the
IDPH. It also found that the facility failed to undertake timely
and thorough investigations.
The F 226 tag found a violation of 42 C.F.R. § 483.13(c).
This provision requires facilities to “develop and implement
written policies and procedures that prohibit mistreatment,
neglect, and abuse of residents and misappropriation of resi-
dent property.” Id. Notably, the provision requires that the fa-
cility not only have such policies and procedures but that it
implement them. It is focused on a systemic condition within
of unknown source, and misappropriation of resident prop-
erty 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 sur-
vey and certification agency).
(3) The facility must have evidence that all alleged viola-
tions are thoroughly investigated, and must prevent further
potential abuse while the investigation is in progress.
(4) The results of all investigations must be reported to
the administrator or his designated representative and to
other officials in accordance with State law (including to the
State survey and certification agency) within 5 working
days of the incident, and if the alleged violation is verified
appropriate corrective action must be taken.
14 No. 16-3368
the facility, not a particular incident. This tag, at the “L” level,
stated that there had been multiple violations of this provi-
sion over a short period of time with respect to each of the
residents, R34, R6, and R28.
As a result of these findings, CMS imposed a $6,050 per
day penalty on Rosewood for the period of immediate jeop-
ardy and $200 per day penalty for subsequent days of non-
23
compliance. See id. §§ 488.438(a)(l)(i); 488.438(f).
II
Having set forth the administrative scheme and the factual
and regulatory foundations for each of the tags, we now ex-
amine the administrative proceedings before us in this peti-
tion for review.
Rosewood appealed the civil monetary penalty first to an
ALJ and then to the Department Appeals Board. We will ex-
amine each in turn.
23 As noted earlier, the regulations in effect during Rosewood’s survey
contained two levels of civil monetary penalties. The upper range, per-
mitting civil monetary penalties of $3,050 per day to $10,000 per day, was
reserved for deficiencies which constitute immediate jeopardy. See 42
C.F.R. § 488.438(a)(1)(i). By contrast, the lower range of civil monetary
penalties, which began at $50 per day and ran to $3,000 per day, was re-
served for “deficiencies that do not constitute immediate jeopardy, but ei-
ther caused actual harm, or caused no actual harm, but have the potential
for more than minimal harm.” Id. § 488.438(a)(1)(ii).
No. 16-3368 15
A.
The ALJ addressed each of the tags and made findings and
conclusions of law with respect to each.
With respect to Tag 223, based on the treatment of R34, the
ALJ found that the evidence of Rosewood’s noncompliance
was “mostly uncontroverted and strongly supports CMS’s al-
24
legations.” As a result, the ALJ concluded that “CMS’s find-
ings of immediate jeopardy level noncompliance were not
25
clearly erroneous.”
In making this determination, the ALJ specifically cited
evidence “establish[ing] that [Rosewood]’s staff both verbally
and physically abused” R34 and failed to protect R34 from
26
further abuse. The ALJ noted that, although “[t]he cursing
and verbal outbursts of the nursing assistant may not have
been directed at the resident so much as they were an element
of a verbal altercation between that nursing assistant and an-
other nursing assistant,” that was irrelevant because R34
27
“was caught in the direct line of fire.” The ALJ also empha-
sized that “the failure of the nursing assistants’ supervisor in-
itially to take the allegations of abuse seriously not only meant
that serious abuse episodes were not being investigated, but
24 A.R. at 3.
25 Id.
26 Id.
27 Id. at 4.
16 No. 16-3368
contributed to an ongoing climate in which more abuse could
28
have easily occurred.”
With respect to Tag 225, the ALJ found that the record es-
tablished that Rosewood’s staff had failed to report promptly
the treatment of R34 to the administrator of the facility. In his
view, the failure of intermediate supervisors to address the
matter not only meant that allegations of serious abuse were
not investigated but also contributed to an ongoing climate in
which other instances easily could have occurred. With re-
spect to the allegations of mental abuse raised by R6’s wife,
the ALJ noted that the allegations remained unproven. How-
ever, in the ALJ’s view, a thorough investigation must “ade-
quately explore[] all possible avenues of evidence concerning
an incident or an allegation and one that is sufficient to assure
that there are not potentially fruitful areas of evidence that are
29
left unexamined.” Based on this standard, the ALJ con-
cluded that Rosewood’s investigation was “palpably incom-
plete” because Rosewood never obtained a statement from R6
30
or his wife.
The ALJ also considered Rosewood’s delay in reporting
the possible misappropriation of R28’s property. The ALJ
noted that, under Rosewood’s own anti-abuse policy, Rose-
wood’s administrator had a duty “to report ‘immediately’ to
28 Id.
29 Id. at 5.
30 Id.
No. 16-3368 17
appropriate State authorities all allegations of abuse and mis-
31
appropriation of property.” He found nothing in this policy
that gives Rosewood’s management “discretion to either de-
lay reporting or to make judgments about which allegations
are credible (and thus meriting reporting) and which are not
32
(thereby not meriting reporting).”
Finally, with respect to Tag 226, the ALJ determined that
the failure of Rosewood’s management to respond ade-
quately to each of the situations represented a failure on its
part to implement its policies.
Based on Rosewood’s conduct toward these three resi-
dents, the ALJ concluded that there was “ample basis” to sup-
port the CMS’s determination that Rosewood’s noncompli-
ance was “so egregious” as to place residents in a state of im-
33
mediate jeopardy. Specifically, the ALJ cited slow investiga-
tions as having “the consequence of leaving residents unpro-
tected against additional instances of abuse, an extremely
dangerous situation for the frail and vulnerable individuals
34
who resided at Petitioner’s facility.” As a result, the ALJ de-
termined that the imposed penalties also were reasonable.
31 Id. at 6.
32 Id.
33 Id. at 8.
34 Id.
18 No. 16-3368
B.
Rosewood appealed the ALJ’s determinations to the De-
partment Appeals Board. The Board determined that there
was adequate evidence to support each of the allegations
made by CMS. It then focused on Rosewood’s assertion that
the IDPH survey did not support an “immediate jeopardy”
rating. It rejected the argument that the rating was infirm be-
cause the IDPH officials did not interview two relevant staff
members and, consequently, that the surveys were incom-
plete. It was clear that CMS had established a prima facie case
for each violation based on undisputed facts of record. The
Board observed that “ALJs and the Board may not overturn
CMS’s determination of the level of noncompliance, which in-
cludes immediate jeopardy, unless that determination is
35
clearly erroneous.” Because Rosewood had the burden “to
demonstrate[,] through argument and the submission of evi-
dence addressing the regulatory factors, that a reduction is
necessary” and did not meet that burden, affirmance was
36
warranted. Accordingly, the Department Appeals Board af-
firmed the level and amount of the civil monetary penalties.
35 Id. at 20 (citing 42 C.F.R. § 498.60(c)(2)).
36 Id. at 22 (internal quotation marks omitted).
No. 16-3368 19
III
DISCUSSION
Rosewood submits that the three examples of noncompli-
ance cited, F 223, F 225, and F 226, “do not support an imme-
diate jeopardy finding because there is no ca[us]al connection
between Rosewood’s noncompliance and serious injury,
37
harm, impairment, or death of a resident.” Accordingly,
Rosewood contends that the civil monetary penalty of $6,050
per day from May 12, 2014, through May 21, 2014, is “not sup-
38
portable.” Rosewood also takes issue with how the IDPH
surveyors conducted the survey. It claims that those survey-
ors “did not investigate or document the immediate jeopardy
39
in an impartial, objective manner.”
Our review is limited to whether the Agency’s conclusion
is supported by substantial evidence. See Fairfax Nursing
Home, Inc. v. U.S. Dep’t of Health & Human Servs., 300 F.3d 835,
839–40 (7th Cir. 2002). “Substantial evidence is ‘such relevant
evidence as a reasonable mind might accept as adequate to
support the conclusion reached by the agency.’” Dana Con-
tainer, Inc. v. Sec’y of Labor, 847 F.3d 495, 499 (7th Cir. 2017)
(quoting Zero Zone, Inc. v. United States Dep’t of Energy, 832
40
F.3d 654, 668 (7th Cir. 2016)).
37 Pet’r’s Br. 11.
38 Id.
39 Id.
40See also Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938) (explaining
that an agency must produce “more than a mere scintilla” of evidence to
20 No. 16-3368
A.
Earlier in this opinion, we have set forth the regulatory
structure in which CMS evaluates allegations that a nursing
home has failed to comply with its regulations.
41
After the state identifies deficiencies, CMS categorizes
the deficiencies alphabetically from “A” to “L” (minor to ma-
jor), based upon their scope (isolated, pattern, or widespread)
and severity. The most severe deficiencies are those that pre-
sent “immediate jeopardy” to patients. See Bryn Mawr Care,
Inc. v. Sebelius, 749 F.3d 592, 594 (7th Cir. 2014). CMS defines
“immediate jeopardy” as “a situation in which the provider’s
noncompliance with one or more requirements of participa-
tion has caused, or is likely to cause, serious injury, harm, im-
42
pairment, or death to a resident.” 42 C.F.R. § 488.301. As we
have explained, an immediate jeopardy finding is not based
“simply on the situation of each individual patient,” but in-
stead depends “on the entire state of readiness in the facility
during the time in question.” Fairfax Nursing Home, 300 F.3d
support its decision). We also defer to the Agency’s “credibility determi-
nations in all but extraordinary circumstances.” Dana Container, Inc. v.
Sec’y of Labor, 847 F.3d 495, 499 (7th Cir. 2017) (citing Chao v. Gunite Corp.,
442 F.3d 550, 557 (7th Cir. 2006)).
41 A deficiency is a “failure to meet a participation requirement specified
in the [Social Security] Act or” regulations. 42 C.F.R. § 488.301.
42 By contrast, if the surveyors find only deficiencies that “pose no greater
risk to resident health or safety than the potential for causing minimal
harm,” the facility is considered to be in “substantial compliance” with
Medicare regulations. 42 C.F.R. § 488.301.
No. 16-3368 21
43
at 842. That said, however, “[a] finding of immediate jeop-
ardy under 42 C.F.R. § 488.301 does not require that the facil-
ity’s actions actually harm the resident, rather, a likelihood that
serious harm, injury, or death will result is sufficient.” Golden
Living Ctr.-Frankfort v. Sec’y of Health & Human Servs., 656 F.3d
421, 429 n.5 (6th Cir. 2011) (emphasis added). With these prin-
ciples in mind, we turn to whether substantial evidence sup-
ported the Agency’s “immediate jeopardy” findings.
B.
Rosewood first challenges Tag F 223’s immediate jeopardy
determination. This tag dealt with the actual abuse of R34.
Under federal law, nursing home residents have the “right to
be free from physical or mental abuse, corporal punishment,
involuntary seclusion, and any physical or chemical restraints
imposed for purposes of discipline or convenience and not re-
quired to treat the resident’s medical symptoms.” 42 U.S.C.
§ 1395i-3(c)(1)(A)(ii); 42 C.F.R. § 483.13(b) (“The resident has
the right to be free from verbal, sexual, physical, and mental
44
abuse, corporal punishment, and involuntary seclusion.”).
43 See also Grace Healthcare of Benton v. U.S. Dep’t of Health & Human Servs.,
603 F.3d 412, 419 (8th Cir. 2009) (“Because the definition of ‘immediate
jeopardy’ requires that there be some causal connection between the facil-
ity’s noncompliance and the existence of serious injury or a threat of in-
jury, the nature and circumstances of the facility’s noncompliance are of
obvious importance to the evaluation.” (internal quotation marks omit-
ted)).
44We refer to the regulations as they were numbered at the time of the
proceedings at issue. During the pendency of Rosewood’s appeal, there
was a major revision of the pertinent regulations, effective November 28,
22 No. 16-3368
“Abuse” is further defined as “the willful infliction of injury,
unreasonable confinement, intimidation, or punishment with
resulting physical harm, pain or mental anguish.” 42 C.F.R.
§ 488.301.
Both the ALJ and the Department Appeals Board agreed
that the record “established that Rosewood staff verbally and
45
physically abused R.34.” In making this determination, the
Agency relied on several written statements in the record, in-
cluding that of CNA Schmidtling, which indicated that, on the
evening of May 12, 2014, CNA Schlesinger cursed loudly as
she attempted to shower R34. Later that evening,
CNA Schmidtling also observed CNA Schlesinger turn R34 so
roughly that the resident nearly rolled out of the bed and fell
to the floor.
Rosewood does not dispute this evidence, but counters
that substantial evidence cannot support the Agency’s find-
ing that R34 was abused because the IDPH surveyors did not
interview CNA Schlesinger, and, according to Rosewood,
CNA Schlesinger’s account of the incident does not support a
finding of abuse.
We cannot accept this submission. First, it is clear that the
Agency considered the totality of the evidence in the record
and CNA Schlesinger’s written statement was part of that rec-
46
ord. CNA Schlesinger’s statement was included in CMS’s
2016. As is relevant to this appeal, 42 C.F.R. § 483.13(b) is now found at
§ 483.12; and 42 C.F.R. § 483.13(c) is now found at § 483.12(b).
45 A.R. at 15.
46 See id. at 16 n.6 (“The written statement by T.S. upon which Rosewood
relies as well as the written statements of E.S. and the nurses to whom E.S.
No. 16-3368 23
exhibits before the ALJ and the Department Appeals Board,
and the Department Appeals Board extensively cited this
47
statement in its decision to affirm the ALJ’s findings.
Additionally, despite Rosewood’s arguments to the con-
trary, it is difficult to see how CNA Schlesinger’s statement
undermines a finding of abuse. In that statement, CNA Schle-
singer confirms that “the resident kept trying to stand up”
during the shower and, as a result, she “kept telling [the] res-
48
ident to sit.” After the shower, CNA Schlesinger continued,
the patient had a bowel movement and she “tried rolling
him,” but, when that did not work, she “used the pull sheet”
49
method to move him. According to CNA Schlesinger, that
50
caused R34 to “roll[] close to the edge of the bed.” Except for
the allegations that CNA Schlesinger cursed at R34, we read
this statement as corroborating CNA Schmidtling’s version of
events. We also believe that it was reasonable for the board to
credit CNA Schmidtling’s account of verbal abuse. In addi-
tion to CNA Schmidtling’s statement, R34’s roommate heard
reported the alleged abuse were all attached to the internal investigation
report of the incident that Rosewood submitted to IDPH on May 16, 2014
after the survey had begun.”). The administrative record refers to CNA
Schlessinger as “T.S.” and CNA Schmittling as “E.S.”
47 See id. at 15–16; see also id. at 522 (CNA Schlessinger’s statement).
48 Id. at 522.
49 Id.
50 Id.
24 No. 16-3368
the aides “yelling” and “talking loudly” when R34 was show-
51
ering. LPN Schmidtling, their supervisor, also corroborated
52
that CNA Schmidtling immediately reported the abuse.
Moreover, Rosewood does not dispute an alternative
ground for the finding of abuse: its failure to address the on-
going feud between CNAs Schlesinger and Schmidtling.
Nothing in CNA Schlesinger’s statement undermines that the
dispute between the two CNAs, Schlesinger and Schmidtling,
had been going on for weeks without intervention. Indeed,
LPN Schmidtling’s statement makes clear that the CNAs had
been “snipping and sniping” at each other “for the better part
of three weeks” and that both aides had been threatening to
53
quit “for at least as long as well.” Rosewood acknowledges
that LPN Schmidtling told the surveyor that it was “common
54
knowledge [that] these two girls argue.” Based on this evi-
dence, we believe that the Agency reasonably could infer that
the feud between the aides was serious enough “to interfere
with the nurse aides’ ability to provide quality care to R.34
55
and other residents,” which also made abuse likely to occur.
We also conclude that substantial evidence supports the
Agency’s “immediate jeopardy” finding with respect to this
incident. As previously noted, “immediate jeopardy” is de-
fined as “a situation in which the provider’s noncompliance
51 Id. at 470.
52 Id. at 521.
53 Id.
54 Id. at 485.
55 Id. at 17.
No. 16-3368 25
with one or more requirements of participation has caused, or
is likely to cause, serious injury, harm, impairment, or death
to a resident.” 42 C.F.R. § 488.301. The record reflects that R34
was in danger of, and, indeed, may have experienced, harm
from CNA Schlesinger’s yelling obscenities at him. He also
was in danger of serious physical harm when CNA Schle-
singer rolled him so hard that he almost fell out of bed. Fi-
nally, as the ALJ stated, R34 was endangered because Rose-
wood did not address the “escalating hostilities between
56
feuding members of its own staff.”
C.
Rosewood next challenges the Agency’s determination in
Tag F 225 that its failure to timely report and investigate all
three incidents warranted an “immediate jeopardy” determi-
nation. A skilled nursing “facility must ensure that all alleged
violations involving mistreatment, neglect, or abuse, includ-
ing injuries of unknown source, and misappropriation of res-
ident property are reported immediately to the administrator
of the facility and to other officials in accordance with State
law.” 42 C.F.R. § 483.13(c)(2). Facilities also “must have evi-
dence that all alleged violations are thoroughly investigated,
and must prevent further potential abuse while the investiga-
tion is in progress.” Id. § 483.13(c)(3). As the Eighth Circuit
recognized in Grace Healthcare, “even allegations of abuse that
prove to be unfounded must be immediately reported and
thoroughly investigated.” 603 F.3d at 421.
56 Id. at 3.
26 No. 16-3368
Rosewood admits that (1) it did not investigate
CNA Schmidtling’s allegations regarding R34’s treatment;
(2) it did not interview R6 or his wife regarding the “kissing
incident”; and (3) it did not investigate or report the alleged
theft of R28’s rings until Monday December 30, 2013. Never-
theless, it contends that each of these instances do not justify
an “immediate jeopardy” determination. This, however, mis-
construes the relevant standard. An “immediate jeopardy”
finding may be based “not simply on the situation of each in-
dividual patient, but also on the entire state of readiness in the
facility during the time in question.” See Fairfax Nursing Home,
300 F.3d at 842. We therefore must consider whether the total-
ity of the allegations support the Agency’s determination that
Rosewood’s noncompliance “has caused, or [was] likely to
cause, serious injury, harm, impairment, or death to a resi-
dent.” 42 C.F.R. § 488.301.
Regarding the allegations of abuse against CNA Schle-
singer, Rosewood contends that neither the delay in the in-
vestigation nor the failure to suspend CNA Schlesinger
caused or was likely to cause harm, serious injury, or death to
any resident. As noted above, however, substantial evidence
does support that R34 was in danger of harm from
CNA Schlesinger yelling obscenities at him and rough-han-
dling him to the point that he almost fell out of bed. Moreover,
when we consider the failure to timely report and fully inves-
tigate CNA Schmidtling’s allegations, it becomes clear that
this could have been much more serious. A CNA reported to
her supervisor that her peer was rough-handling and verbally
abusing a particularly fragile 92-year-old patient. Even if later
proved untrue (which is not the case here), the supervisor’s
failure to take the CNA off-duty pending an investigation put
R34 at risk of additional harm. This inaction does not fulfill
No. 16-3368 27
Rosewood’s duty to “prevent further potential abuse while
the investigation is in progress.” Id. § 483.13(c)(3). Put starkly,
R34’s care plan required that he receive assistance from two
staff members. The fact that two CNAs would not assist each
other in rendering his care clearly placed him in jeopardy of
continued abuse.
Rosewood also asserts that Kabureck’s failure to interview
R6 and his wife does not constitute noncompliance that
caused or was likely to cause serious injury, harm, impair-
ment, or death. Neither party asserts that the “kissing inci-
dent” constitutes actual abuse; indeed, the Agency deter-
mined that the evidence regarding the incident was “equivo-
57
cal.” That, however, was not known to Rosewood at the time
that R6 and his wife complained. Cf. Luling Care Ctr. v. CMS,
DAB No. CR4082, 2015 WL 5023384, at *5 (H.H.S. 2015) (“The
facility is required to report before it completes its thorough
investigation and is in a position to know whether the abuse
occurred.”).
R6 and his wife initially approached the administrator be-
cause R6 had been “kissed” by a nurse and felt uncomfortable
with the interaction. Such a complaint could have constituted
abuse because facilities must “[n]ot use verbal, mental, sexual,
or physical abuse, corporal punishment, or involuntary seclu-
sion.” 42 C.F.R. § 483.13(c)(1)(i) (emphasis added). Specifi-
cally, the record reflects that R6’s wife, Z4, complained that
an unknown female staff member “put her hands on his
cheeks and kissed him on one side then the other, then kissed
57 Id. at 4.
28 No. 16-3368
58
[R6’s] forehead and said ‘I have always loved you.’” Z4
stressed that R6 knew “the difference between a caring kiss
59
and someone who is trying to ‘really kiss’ him.” As the ALJ
noted, this situation could have fallen within the type of men-
tal abuse prohibited under § 483.13(c)(1)(i).
Substantial evidence certainly supports the conclusion
that the administrator’s initial investigation was not thorough
enough to have dismissed the allegations of abuse. Kabureck
interviewed therapy staff who had worked that day and other
residents to determine if they had been kissed by a staff mem-
ber or witnessed such behavior; no one indicated that they
had witnessed such behavior or that they, too, had been
kissed. But Kabureck’s initial report did not contain any infor-
mation from R6 himself, despite the fact that, according to the
60
facility, R6 was “alert” and able to provide such information.
Rosewood seems to suggest that such an interview or state-
ment would not “have yielded any information that would
61
have furthered the investigation.” Substantial evidence cer-
tainly supports the conclusion that a thorough investigation,
as required by the regulations, required Rosewood to seek in-
formation from the victim; the regulations did not permit
58 Id. at 445.
59 Id.
60 Id. at 513.
61 Id. at 176.
No. 16-3368 29
Rosewood to assume that the version offered by its own em-
62
ployees was the end of the matter.
Finally, Rosewood contends that its failure to investigate
or report the alleged theft of R28’s rings did not warrant an
immediate jeopardy finding. We must, however, consider the
evidence in its totality. As the Department Appeals Board has
recognized, a less serious deficiency may be “‘pulled up’ to
immediate jeopardy by the other cited deficiencies” in a par-
ticular tag. Spring Meadows Health Care Ctr., DAB No. CR1063,
63
2003 WL 21801713, at *17 (H.H.S. 2003). When evaluated in
light of the other lapses during this six-month period, Rose-
wood’s lapse in timely investigating and reporting R28’s
missing rings supports the Agency’s conclusion that Rose-
wood suffered from a systemic failure to investigate thor-
oughly and report promptly incidents that might endanger
patients. Alongside Rosewood’s other failures, substantial ev-
idence supports that there was a systemic problem at Rose-
wood, which put residents in jeopardy of further harm.
62 See Ridgecrest Healthcare, DAB No. 2598, 2014 WL 8144931, at *13 (H.H.S.
2014) (concluding that a facility’s investigation of alleged abuse was not
“thorough” when the facility failed to interview resident who complained
of abuse); see also CMS, State Operations Manual: Ch. 5—Complaint Proce-
dures, available at https://www.cms.gov/Regulations-and-Guidance/Guid-
ance/Manuals/Downloads/som107c05.pdf (advising state agencies to
“[i]nterview the person who made the complaint” and “the person the
complaint is about” when investigating allegations of abuse).
63See also Green Oaks Health & Rehabilitation Ctr., DAB No. CR2643, 2013
WL 4052205, at *20 (H.H.S. 2013) (“Identifying failures in a facility’s obli-
gation to provide the kind of high quality care required by the Act and the
implementing regulations most often reflect judgments that will reflect a
range of noncompliant behavior.” (internal quotation marks omitted)).
30 No. 16-3368
Based on the totality of the evidence in the record, we con-
clude that the Agency’s immediate jeopardy determination
regarding F 225 is supported by substantial evidence.
D.
Rosewood challenges two aspects of the Agency’s finding
in Tag F 226 that it failed to implement its internal policies on
abuse, neglect, and misappropriation of property involving
all three incidents: first, it contends that it did follow its pro-
cedures; and second, it warns that a contrary determination
would allow CMS to impose fines arbitrarily because any vi-
olation of an entity’s established procedures could be used to
support an immediate jeopardy determination.
Skilled nursing facilities must “develop and implement
written policies and procedures that prohibit mistreatment,
neglect, and abuse of residents and misappropriation of resi-
dent property.” 42 C.F.R. § 483.13(c). As the Department Ap-
peals Board has explained, “[s]ection 483.13(c) by its plain
terms does not address neglect or abuse per se, but” instead
“requires a facility to have and implement [its own] policies
and procedures to prohibit abuse and neglect.” Columbus
Nursing & Rehab. Ctr., DAB No. 2398, 2011 WL 3251325, at *8
(H.H.S. 2011).
Rosewood first asserts that it complied with § 483.13(c) be-
cause it had appropriate procedures in place, which it also fol-
lowed. For instance, Rosewood points out that it educated
every new employee on its anti-abuse policies, and each em-
ployee was required to sign that he or she had reviewed and
understood the anti-abuse policies. Rosewood notes that all
nurses, CNAs, and LPNs involved with R34, R6, and R28 had
No. 16-3368 31
read the abuse and neglect policy and indicated that they un-
derstood the policy.
These are no doubt commendable steps in implementing
policies. But the Agency does not claim that Rosewood com-
pletely failed to implement its policies; it simply found that
Rosewood failed to implement them in significant ways and
that those failures seriously jeopardized the welfare and
safety of its patients. There is substantial evidence of record
that, whatever salutary programs Rosewood may have imple-
mented, it did not adequately implement its own “Abuse In-
vestigation Policy” by seeing that “all allegations of abuse
(possible physical, emotional, sexual, verbal, and/or misap-
propriation of property) [were] reported immediately to the
64
State Agency in accordance with current regulations.” As
previously discussed, Rosewood violated this policy by fail-
ing to report the allegations of abuse regarding R6 and R34,
and by failing to timely report R28’s missing rings.
Rosewood’s policy also states that “[r]esident and family
concerns will be documented, reviewed, addressed and re-
65
sponded to.” Substantial evidence supports the view that
Rosewood violated this policy when it failed to document, re-
view, or address adequately the concerns of R6 and his wife
about the “kissing incident.” LPN Schmidtling also failed to
follow Rosewood’s policies when she failed to “report suspi-
64 A.R. at 489 (emphasis removed).
65 Id. at 495.
32 No. 16-3368
cions of neglect or abuse to [the administrator] immedi-
66
ately.” LPN Schmidtling did not report CNA Schmidtling’s
allegation that CNA Schlesinger abused R34; she also violated
the policy when she failed to bar CNA Schlesinger from fur-
67
ther contact with residents pending investigation. In short,
these multiple lapses support the Board’s conclusion that
there was a systemic failure to implement Rosewood’s policies
aimed at conforming to federal regulations.
E.
Rosewood’s final argument asserts that the IDPH’s inves-
tigation was so inadequate that the imposition of civil mone-
tary penalties is unwarranted. Rosewood, however, also con-
cedes that “an allegation of an inadequate survey perfor-
mance does not otherwise invalidate adequately documented
68
deficiencies.” We agree. The plain language of 42 C.F.R.
§ 488.318(b) states: “Inadequate survey performance does
not—(1) [r]elieve a SNF or NF of its obligation to meet all re-
quirements for program participation; or (2) [i]nvalidate ade-
quately documented deficiencies.” As the Government cor-
rectly notes, there are remedies, outside of this appeal, that
the Secretary of the Department of Health and Human Ser-
vices separately can impose on the IDPH for inadequate sur-
vey performance. See id. § 488.320(b) (describing “[s]anctions
for inadequate survey performance”). Those remedies, how-
66 Id. at 493.
67 Id. at 489.
68 Pet’r’s Br. 20.
No. 16-3368 33
ever, do not include allowing facilities to escape responsibil-
ity for supported deficiencies. Id. § 488.318(b). At bottom,
CMS made out a prima facie case of serious violations, and
Rosewood was unable to rebut that case. Substantial evidence
supports the determination of the Agency.
Conclusion
For the reasons set forth in the foregoing opinion, the De-
partment Appeals Board’s decision was supported by sub-
stantial evidence. The petition for review is denied.
PETITION DENIED