On August 1, 2006, the United States Court of Appeals for the Sixth Circuit affirmed a decision of the Departmental Appeals Board (“DAB”) of the United States Department of Health & Human Services (“DHHS”) that had upheld an award of civil monetary penalties of $77,100.00 against a skilled nursing facility (“SNF”) in Ohio. The penalties came as a result of the facility being cited by the state survey agency for numerous violations the agency was unwilling to waive, despite finding that prior Medicare program-participant violations had been substantially corrected upon revisit surveys.

The Sixth Circuit, applying the substantial evidence test, found that substantial evidence supported the award of penalties. The violations included allowing a resident to leave the facility and for being inattentive to a resident’s alcohol abuse problem. Although one resident sustained what might be considered a minor injury, and other residents were not injured by the violations, the Sixth Circuit did not accept the provider’s arguments. First, the Sixth Circuit apparently thought there were some injuries or worsening of conditions based on the facts of the case. Second, and most importantly, the Court reasoned that actual harm is not required to impose a civil monetary penalty. Rather, “a threat of more-than-minimal harm suffices.” The facility, did not, in the Court’s mind, keep the environment as free of hazards as was possible.

The Sixth Circuit case is Harmony Court v. Leavitt, No. 05-3644 (6th Cir. August 1, 2006).