Santa Fe Heights Healthcare Center, LLC, DAB CR6473 (2024)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to impose a per-instance civil money penalty of $15,000 against Petitioner, Santa Fe Heights Healthcare Center, LLC, a Medicare-participating skilled nursing facility in the State of California. 

I. Background

This case originally was assigned to another administrative law judge. It was transferred recently to my docket. The administrative law judge to whom this case was originally assigned received the parties’ proposed exhibits into evidence. These exhibits are CMS Ex. 1 – CMS Ex. 23 and P. Ex. 1 – P. Ex. 21. He scheduled an in-person hearing. He subsequently cancelled the hearing after Petitioner withdrew its request to cross-examine CMS’s witness and set the case for decision based on the parties’ pre-hearing exchanges.¹ Neither party objected to these rulings and orders. 

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I decide this case based on the parties’ written pre-hearing exchanges and arguments. The record includes a brief from CMS, Centers for Medicare & Medicaid Services’ Prehearing Brief (CMS Br.) and a brief from Petitioner, Petitioner Santa Fe Heights Healthcare Center, LLC’s Response in Opposition to the Centers for Medicare and Medicaid Services’ Motion for Summary Judgment and Pre-hearing Brief (P. Br.). I cite to the parties’ exhibits and arguments in this decision as is appropriate. 

II. Issues, Findings of Fact and Conclusions of Law

A. Issues

At issue in this case is whether Petitioner and its staff failed to comply substantially with elements of 42 C.F.R. § 483.80, a regulation that is commonly known as the infection prevention and control regulation. Also at issue is whether CMS’s determination to impose a per-instance civil money penalty against Petitioner is reasonable. 

B. Findings of Fact and Conclusions of Law

1. Noncompliance

The infection prevention and control regulation requires a skilled nursing facility to establish and maintain an infection control program that is designed to provide a safe, sanitary, and comfortable environment for residents and to help prevent the development and transmission of communicable diseases and infections. 42 C.F.R. § 483.80. The regulation directs the facility to create: a system for preventing, identifying, investigating, and controlling infections and communicable diseases; written standards, policies and procedures for the program, including a system of surveillance designed to identify possible communicative diseases or infections before they can spread to other individuals in the facility; and guidelines for when and to whom possible incidents of communicable disease or infections should be reported. 42 C.F.R. § 483.80(a)(1)(2). A skilled nursing facility must follow standard and transmission-based precautions to prevent the spread of infections. It must do more than create an infection prevention and control program; it must implement that program. Heritage House of Marshall Health & Rehab. Ctr., DAB No. 2566 at 12 (2014). 

CMS does not dispute that Petitioner developed policies and procedures that were intended to prevent and control infections. CMS argues, however, that Petitioner failed to implement its policies. CMS contends that Petitioner’s failure to implement its policies amounts to noncompliance with the infection prevention and control regulation. CMS Br. at 10. 

The weight of the evidence supports CMS’s allegations and I sustain them. 

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CMS’s case against Petitioner centers mostly around Petitioner’s care of three residents, identified as Residents 494, 57, and 5. CMS contends that Petitioner failed to apply its infection control policies to address these residents’ possible infections with scabies. CMS Br. at 12. Scabies is an itching skin irritation caused by a microscopic parasitic mite that burrows into and resides in its host’s upper skin layers. CMS Ex. 12 at 1 ¶ 1. Scabies is transmissible from one individual to another by direct contact or by contact with garments or other items that may carry mites. Id. at 1, ¶ 6. Diagnosing the condition requires using specialized instruments to recover the mite from its burrow in the skin and examining it microscopically. Id. at 1, ¶ 7. 

Petitioner housed the three residents together in Room 35 of its facility. CMS Ex. 3 at 2. It designated this room as a contact isolation facility, meaning that Petitioner’s staff were to interact with the residents using special precautions to prevent the spread of contagious organisms. CMS Ex. 14 at 2, ¶ 1. Petitioner’s staff posted a notice outside of the room, reading: “PLEASE DO NOT ENTER, CONSULT WITH NURSE’S PRIOR TO ENTERING THE ROOM.” CMS Ex. 1 at 77-78 (all caps in original). 

Resident 494 had resided at Petitioner’s facility since January 2021. CMS Ex 18 at 1. She was hospitalized for two days in July 2021 and readmitted to Petitioner’s facility on July 22 of that year. Id. at 39. 

Resident 494 had a history of skin irritation (dermatitis) that predated her hospitalization in July 2021. Id. at 6-7. In May of that year, Petitioner’s staff concluded that Resident 494 was suffering from contact dermatitis and treated her with topical medication intended to relieve her discomfort. Id. at 7, 12. She was not tested for possible scabies at that time. Id. at 3-7. 

A physical examination of the resident while she was at the hospital revealed that she had a skin rash. Id. at 40-41. The hospital did not perform tests to determine whether the resident had scabies but cared for her as if she did. Id.; CMS Ex. 23. The hospital staff treated the resident with Permethrin, a topical medication that health care providers use to treat individuals who are infected with scabies. CMS Ex. 18 at 3, 21. When the hospital discharged the resident back to Petitioner’s facility, it sent Petitioner documentation which recorded the hospital staff’s diagnosis of presumptive scabies and the resident’s treatment with Permethrin. Id; P. Ex. 15 at 1-2, ¶ 9; P. Ex. 17 at 2, ¶ 10. When Resident 494 returned to Petitioner’s facility, her physician ordered that she receive additional treatment with Permethrin. CMS Ex. 18 at 21, 40-41. 

Petitioner had Resident 494 tested for scabies on July 27, 2021, after she had returned to the facility and after she had been housed for nearly six days in a room with Residents 57 and 5. The test results were negative. CMS Ex. 18 at 8; P. Ex. 17 at 2, ¶ 12. 

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On July 23, 2021, Resident 57 was evidently suffering from what Petitioner’s staff had identified as some kind of dermatitis because the resident’s physician ordered that she be treated with Lotrisone, an anti-fungal medication. CMS Ex. 17 at 1, 98. Resident 5 was also treated with Permethrin for unspecified dermatitis as of July 23, 2021. CMS Ex. 3 at 4. 

CMS argues that the evidence establishes that Petitioner housed Residents 494, 57, and 5 in one room in violation of its own policy. CMS Br. at 12. Petitioner’s transmission-based policy specifies that residents who are known or suspected to be infected with a microorganism that can be transmitted by contact should be placed in a private room or in a room with another low-risk resident. CMS Ex. 14 at 2, ¶ 3. That policy is consistent with the infection prevention and control regulation’s requirement that a facility’s policy follow standard and transmission based precautions to prevent the spread of infection. 42 C.F.R. § 483.80(a)(1)(2). 

Housing Resident 494 with Residents 57 and 5 was clearly contraindicated by these residents’ conditions. Petitioner did not know whether Resident 494 had scabies. The diagnosis of presumptive scabies that this resident received at the hospital coupled with her prescribed treatment with Permethrin, an anti-mite medication, put Petitioner on notice that Resident 494 was possibly infected. Petitioner’s policy dictated that the resident be isolated until the scabies infection was either ruled out or treated and cured. At the very least, the policy required Resident 494 to be housed with another resident who was not susceptible to scabies infection. Residents 57 and 5 did not fall into that category as they both had serious co-morbidities and were susceptible to infection.

Resident 57 was a severely-debilitated individual whose condition had deteriorated to the extent that she was receiving hospice care. CMS Ex. 17 at 42. She suffered from diabetes, hypothyroidism, and multiple mental problems. Id. at 14. She lacked the capacity to understand and to make decisions and required extensive assistance with the activities of daily living. Id. at 85. Resident 57 needed assistance with eating, frequently refused to eat, and had experienced significant weight loss. Id. at 17, 45, 75, 84. Petitioner’s staff concluded that the resident was at risk of infection due to “multisystem decline and co-morbidities.” Id. at 74. 

Resident 5 was also an individual who suffered from debilitating illness. He was 90 years old in 2021 and suffered from Alzheimer’s Disease, a fractured hip, coronary artery disease, chronic obstructive pulmonary disease, bronchitis, and kidney failure. CMS Ex. 3 at 1-4, 9-11. The resident required assistance for transfers and bed mobility. Id. at 6. 

Petitioner’s decision to have Resident 5 treated with Permethrin as a prophylactic while housed with Resident 494 is strong evidence that staff was aware of the risk that these residents could become infected. 

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The possibility that Resident 494 was infected with scabies should have triggered Petitioner’s infection control and scabies policies. Petitioner cannot evade liability for its failure to comply with those policies by arguing that, with hindsight, the resident was not infected. Nor may it assert, credibly, that staff never believed that the resident had scabies. 

Petitioner states that there “never was a suspected or presumed scabies cases around the time of the survey [of Petitioner’s facility by California State agency surveyors].” P. Br. at 6. That assertion is incorrect. The hospital staff who treated the resident in July 2021 presumed that the resident had scabies based on her signs and symptoms. The prescription that she received at the hospital for Permethrin evidenced the hospital staff’s suspicions. The fact that her treating physician continued the prescription after Resident 494 returned to Petitioner’s facility is further evidence that scabies was suspected. That Petitioner’s staff opted to isolate Resident 494 is more proof that the staff believed that the resident may have been infected. 

Petitioner argues that Residents 57 and 5 never had signs or symptoms of scabies. P. Br. at 11. It asserts that it placed them in contact isolation purely as a precaution. Id. However, CMS doesn’t argue that placing these two residents in contact isolation was improper. Rather, it argues that placing Residents 57 and 5 in the same room with possibly-infected Resident 494 was improper due to the residents’ debilitated conditions and their co-morbidities. 

Petitioner offers no answer to this argument. Petitioner does not deny that its scabies policy explicitly prohibits housing a resident with scabies or with suspected scabies in a room with another resident who is at risk for infection. It does not offer evidence to prove that Residents 57 and 5 were at low risk for infection and indeed, the weight of the evidence proves the opposite to be true. 

CMS argues that Petitioner failed in other respects to comply with its infection prevention and control policies. As one example, CMS avers that Petitioner failed to report Resident 494’s presumptive scabies infection to appropriate health authorities. CMS Br. at 10. 

Petitioner has a policy entitled “Reporting Communicable Disease.” CMS Ex. 11 at 1. The policy states that all reportable communicable diseases must be reported to a designated staff member (“Infection Preventionist”) as soon as the disease is diagnosed or strongly suspected. The Infection Preventionist must then immediately report the disease to local, district or state health departments. Id.

There was no scabies outbreak in Petitioner’s facility. As I have discussed, Resident 494 was found not to be infected with scabies based on a test conducted on July 27, 2021. Nevertheless, there was a period of nearly a week after the resident’s return to Petitioner’s

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facility on July 22, 2021, during which Petitioner’s management and staff suspected that the resident was infected. Staff’s concerns are embodied in their decision to isolate the resident and to treat her with Permethrin. As Petitioner’s administrator conceded, the staff’s suspicions should have motivated Petitioner’s staff to report the situation to California’s health department. CMS Ex. 21 at ¶ 10. The staff failed to do so. 

Petitioner argues that it was under no duty to report because Resident 494 was “never suspected to have scabies.” P. Br. at 10. I do not accept this assertion. The credible evidence proves that Petitioner’s staff, and the staff of the hospital that treated Resident 494 in July 2021, suspected that the resident had a scabies infection. The hospital’s diagnosis of presumptive scabies, Petitioner’s decision to isolate the resident, and the prescription of an anti-scabies medication, Permethrin, are proof that Petitioner’s staff acted on the suspicion that Resident 494 was infected. 

Petitioner contends additionally that it was not required to report Resident 494’s condition even if its staff suspected that the resident had scabies. It claims that it was not required by State guidelines to report only a single case of scabies. As support, Petitioner offers California Department of Public Health Guidelines, which state as a general principle that single cases of scabies are generally not reportable. P. Ex. 6 at 4. But the same document states that in long-term care settings, even a single case of scabies must be considered as an outbreak, given the vulnerability of residents to infection: 

An outbreak should be assumed to be occurring following diagnosis of a single case, until screening of all new patients and staff for scabies has been completed without identifying additional suspect cases. An outbreak cannot be conclusively excluded for at least 6 weeks following the last unprotected exposure to the case.

Id. at 7. 

CMS asserts, as another example of noncompliance, that Petitioner allowed its staff to enter and leave the room that housed Residents 494, 57, and 5, without proper use of personal protective equipment (PPE) and without necessary hand sanitizing. This, according to CMS, violated Petitioner’s Isolation Transmission-Based policy, which directs that staff and visitors are required to wear disposable gowns and gloves before entering a room in which infected individuals, or individuals who are suspected of being infected, are housed, and to perform hand hygiene before leaving that room. CMS Ex. 14 at 2, Contact Precautions, ¶ 4. 

Furthermore, failure by staff to wear disposable gloves and to sanitize their hands when treating residents who are infected, or suspected to be infected, with scabies, violates Petitioner’s scabies prevention and treatment policy: 

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Employees must wear gloves and a long-sleeved gown with the wrist area covered to attend to resident needs, for housekeeping duties, and handling of laundry. Remove gown and wash hands before leaving the room. 

CMS Ex. 12 at 4. 

CMS contends, and offers evidence to prove, that there was no hand sanitizer on the PPE cart outside of the room that housed Residents 494, 57, and 5. CMS Ex. 4 at 29; CMS Ex. 9 at 3. A surveyor observed staff members entering that room without sanitizing their hands. The surveyor also observed a staff member not donning gloves before entering the room. CMS Ex. 4 at 29, 31. 

Petitioner does not directly deny these observations. P. Br. at 12. It asserts that the surveyor’s observations aren’t credible because her notes do not contain the same observations as the surveyor later reported. Id.; see also CMS Ex. 4 at 29; CMS Ex. 6 at 4-5.

I find the surveyor’s observations to be credible. There is no requirement that a surveyor’s notes mirror exactly what the surveyor later recalls in an affidavit or declaration. Moreover, Petitioner could have – but did not – offer the testimony of its staff to refute the surveyor’s findings if, in fact, staff contended that the surveyor was wrong. Petitioner did not do so. 

CMS asserts additionally that Petitioner’s staff violated Petitioner’s policy by not investigating whether Residents 494, 57, and 5 were infected with scabies. I sustain this allegation. As I have discussed, Petitioner did not have Resident 494 tested for scabies until July 27, 2021, nearly a week after she returned to Petitioner’s facility with presumptive scabies. Petitioner did not test either Residents 57 or 5 for presence of the infection. 

Rather than test these residents, Petitioner’s staff relied on their observations of the residents to conclude that they were not infected. But a visual inspection alone is not sufficient to rule out an infection with scabies mites. Testing for the presence of scabies is a fairly elaborate procedure that requires special equipment, laboratory examination of specimens, and expertise. P. Ex. 6 at 18. 

It is not a defense to assert after the fact that none of the residents were infected. That Resident 494 was presumptively infected was sufficient trigger Petitioner’s own infection control policy and to alert Petitioner’s staff to a possible infection that needed investigation before scabies could be ruled out. 

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CMS contends that Petitioner failed to ensure that health records were complete for potential employees prior to their being hired. CMS Br. at 15-16. This failure, according to CMS, violated Petitioner’s own policy, which stated that employees would be provided with: pre-employment physical examinations and testing; immunization programs; and screening with communicable diseases and infections. CMS Ex. 8 at 1. CMS offers evidence to prove that Petitioner failed to maintain complete health records for three of its employees. None of these employees’ files included vaccination records. CMS Ex. 21 at ¶ 14. These incomplete records were not a trivial omission, according to CMS. The failure by Petitioner to assure that its staff’s vaccinations were up to date meant that staff members and residents possibly could be exposed to communicable diseases. 

In its defense, Petitioner argues that the failure to maintain up to date vaccination records was a mere clerical error or a result of misplaced paperwork that posed a risk for no more than minimal harm. P. Br. at 13-14. It argues also that the employees had current physical examinations and had reported no communicable diseases. Id.

I find this defense to be unavailing. There is a difference between protective vaccination and an episodic report by an individual that he or she is disease-free. Vaccination provides ongoing protection against infection. One obviously can be exposed to a contagious illness after a physical examination is complete. 

Finally, CMS alleges that Petitioner failed to have Resident 494 examined by a dermatologist. CMS Br. at 13-14. I accept Petitioner’s defense to this allegation – that it had the resident examined by a qualified nurse practitioner. 

2. Remedy

The remedy that CMS imposed against Petitioner is a $15,000 per-instance civil money penalty. The remedy is authorized by 42 C.F.R. § 488.438(a)(2), which authorizes a civil money penalty for an instance of noncompliance. The remedy amount falls within the permissible range for per-instance civil money penalties as adjusted for inflation. Id.; 45 C.F.R. Part 102. 

Regulations establish factors to be considered in determining penalty amounts. These include the seriousness of a facility’s noncompliance, its culpability, its compliance history, the interrelationship of a facility’s deficiencies, and its financial condition. 42 C.F.R. §§ 488.438(f)(1)-(4), 488.404 (incorporated by reference into 42 C.F.R. § 488.438(f)(3)). 

I find that the seriousness of Petitioner’s noncompliance and the interrelationship of instances of noncompliance are sufficient basis to sustain the penalty amount. Residents of skilled nursing facilities are among the most vulnerable members of our society. They are often elderly, frail, and highly susceptible to communicable diseases. Failure by a

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facility to protect its residents against contagion can have serious – even catastrophic – results for those residents. 

In this case, Petitioner evidenced multiple failures to comply with its infection prevention and control policies. None of these failures caused residents to experience actual harm. However, each of them created a potential for more than minimal harm. Moreover, that Petitioner had failed in several respects to comply with its policies suggests an overall laxness in compliance and leads me to conclude that Petitioner was not vigorously enforcing its policies. That put all of Petitioner’s residents at risk. 

Petitioner did not challenge the remedy determination other than to argue that it substantially complied with participation requirements. I explain above why I disagree with Petitioner’s arguments. 

Endnotes

¹ The administrative law judge’s rulings and orders are Notice of Hearing, December 8, 2022, and Order Cancelling Hearing and Closing Record, April 4, 2023.