Good Shepherd Health Center, DAB CR6777 (2026)

DECISION

Good Shepherd Health Center (“Petitioner” or “Facility”) challenges the determination by the Centers for Medicare & Medicaid Services (CMS) that it was not in substantial compliance with the Medicare program participation requirement at 42 C.F.R. § 483.80 (Tag F880).  Petitioner also challenges the imposition of a per-instance civil money penalty (CMP) of $5,000.  For the reasons discussed below, I find that Petitioner failed to substantially comply with 42 C.F.R. § 483.80 and that the penalty imposed is reasonable. 

I. Background and Procedural History

Petitioner is a long-term care (LTC) facility located in Mason City, Iowa.  See CMS Exhibit (Ex.) 1.  The Iowa Department of Inspections and Appeals conducted a standard survey at Petitioner’s facility on June 2, 2022.  Id.; CMS Ex. 10 at 1. § The surveyor documented several infection control deficiencies.  Based on the survey, CMS concluded Petitioner was not in substantial compliance with 42 C.F.R. § 483.80(a)(1)-(2) (Tag F880 – Infection Prevention and Control) at scope and severity level “D” and imposed a $5,000 per-instance CMP.1  CMS Ex. 10 at 1. 

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Petitioner timely appealed.  The Civil Remedies Division of the Departmental Appeals Board (CRD) acknowledged receipt of Petitioner’s hearing request and issued a Standing Prehearing Order (SPO).2  In the SPO, the parties were directed to file a pre-hearing exchange and were also informed that a hearing in this matter is only necessary if a party submits admissible, written direct testimony as part of its pre-hearing exchange, and the opposing party requests cross-examination.  SPO ¶¶ 6, 13.  

Pursuant to the SPO, CMS filed its Prehearing Brief (CMS Br.) and 14 proposed exhibits (CMS Exs. 1-14), including the written direct testimony of one witness, Carol Segebart, RN.  Petitioner filed a Prehearing Brief (P. Br.) and four proposed exhibits (P. Exs. 15-18), including the written direct testimony of one witness, Ian Stockberger, Chief Executive Officer (CEO) of the Facility.3 

In the absence of any objections, I admit into evidence CMS Exs. 1-14 and P. Exs. 15-18.  Neither party has requested to cross-examine the other party’s witness; therefore, an in-person hearing is not necessary, and I will decide this matter on the written record.  SPO ⁋ 13. 

II. Issues

The issues in this case are: 

1. Whether Petitioner failed to substantially comply with 42 C.F.R. § 483.80 (Tag F880, Infection Control);
2. If Petitioner was not in substantial compliance with Medicare participation requirements, whether the CMP imposed is reasonable.  

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III. Discussion

1. A. Statutory and Regulatory Framework

The Social Security Act (Act) establishes requirements for skilled nursing facility (SNF) participation in the Medicare program and authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations implementing those statutory provisions. See 42 U.S.C. § 1395i-3; 42 C.F.R. pts. 483, 488.  To participate in the Medicare program, SNFs must maintain substantial compliance with program participation requirements.  In order to be in substantial compliance, any deficiencies may “pose no greater risk to resident health or safety than the potential for causing minimal harm.”  42 C.F.R. § 488.301.  “Noncompliance” means “any deficiency that causes a facility to not be in substantial compliance.”  Id.  

The Secretary contracts with state agencies to conduct periodic surveys to determine whether SNFs are in substantial compliance with participation requirements.  42 U.S.C. § 1395aa(a); 42 C.F.R. §§ 488.10, 488.20.  The Act and its implementing regulations require that facilities be surveyed on average every twelve months, and more often if necessary, to ensure that identified deficiencies are corrected.  42 U.S.C. § 1395i-3(g)(2)(A); 42 C.F.R. §§ 488.20(a), 488.308.  In March 2020, due to the COVID-19 global pandemic, CMS suspended non-emergency surveys for LTC facilities and directed state agencies to prioritize Focused Infection Control (FIC) surveys.4  State agencies were allowed to resume performing annual recertification health surveys in August 2020 at their discretion.5 

When the results of a survey show that a SNF is not in substantial compliance with program participation requirements, the Secretary may impose enforcement remedies such as CMPs.  Act § 1819(h)(2) (42 U.S.C. § 1395i-3(h)(2)); 42 C.F.R. §§ 488.406, 430.  If CMS imposes a CMP based on a noncompliance determination, then the SNF may request a hearing before an ALJ to challenge CMS’s determination of noncompliance that led to the imposition of an enforcement remedy.  A SNF may challenge CMS’s finding as 

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to the level of noncompliance only if a successful challenge would affect the range of CMP amounts imposed on the SNF.  42 C.F.R. § 498.3(b)(14).  Further, where a challenge to the level of noncompliance is permitted, CMS’s determination as to the level of noncompliance must be upheld unless it is clearly erroneous.  42 C.F.R. § 498.60(c)(2). 

In a hearing before an ALJ, CMS must make a prima facie case that the SNF failed to comply substantially with federal participation requirements.  If CMS makes a prima facie case, the burden of persuasion shifts to the SNF, which must prove substantial compliance by a preponderance of the evidence.  Hillman Rehab. Ctr., DAB No. 1611 at 8 (1997), aff’d sub nom. Hillman Rehab. Ctr. v. U.S. Dep’t of Health & Hum. Servs., No. Civ. A-98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d sub nom. Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800 (2001); Cross Creek Health Care Ctr., DAB No. 1665 (1998). 

1. B. Findings of Fact, Conclusions of Law, and Analysis
   1. 1. Petitioner was not in substantial compliance with 42 C.F.R. § 483.80 because it failed to maintain an effective infection prevention and control program that protects residents from infections and communicable diseases.6

Section 1819(d)(3) of the Social Security Act mandates that a skilled nursing facility must (A) establish and maintain an infection control program to provide a “safe, sanitary, and comfortable environment in which residents reside and to help prevent the development and transmission of disease and infection,” and (B) be designed, constructed, equipped, and maintained in a manner that protects the health and safety of residents, personnel, and the general public.  Consistent with section 1819(d)(3), 42 C.F.R. § 483.30 (Tag F880) required the facility to establish and maintain an infection control program designed to provide a safe, sanitary, and comfortable environment and to help prevent the development and transmission of communicable diseases and infections. 

On December 19, 2019, during its standard recertification survey, Petitioner was cited for multiple deficiencies including one infection control deficiency for failing to maintain an infection prevention and control program (IPCP) (Tag F880).  CMS Ex. 11 at 5-9.  Petitioner’s staff failed to perform appropriate hand hygiene after removing gloves, failed to use disinfectant to clean a urine spill, and failed to use a barrier on the floor for a bag of urine.  Id.  Petitioner corrected the deficiency and obtained substantial compliance on January 24, 2020.  Id. at 1, 6. 

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On June 1-2, 2022, more than two years later, the Iowa Department of Inspections and Appeals conducted a survey of Petitioner’s facility and cited multiple deficiencies, including two infection control deficiencies.  CMS Ex. 1.  Specifically, on June 1, 2022, the state surveyor observed a certified nursing assistant (CNA) and a licensed practical nurse (LPN) change a resident’s wound dressing and soiled padding with gloved hands.  CMS Ex. 7 at 3.  The CNA subsequently used a keypad to enter a utility room without changing gloves or performing hand hygiene.  Id.  The surveyor also observed an LPN use ungloved hands to “sift through a pile of medications” on a medication cart to locate a specific pill to remove.  Id.; CMS Ex. 6 at 16.  Once she located the medication, she removed it from the pile of pills, put her gloves on, and gave the remainder of the pills to a resident.  Id.; CMS Ex. 7 at 3. 

Petitioner’s staff failed to comply with its own Infection Control Policy, which states that “[p]roper hand hygiene is the most effective way to prevent the spread of infection.”  CMS Ex. 14 at 1.  More specifically, the policy requires staff to remove gloves after caring for a resident and perform hand hygiene after removing gloves.  Id. at 1-2. 

Petitioner does not deny the infection control deficiencies occurred as alleged.  The facility’s CEO testified that the facility is not disputing the material facts within the citation.  P. Ex. 18 at 1.  Rather, Petitioner argues that the CMP is unwarranted given its “excellent history concerning infection control.”  P. Br. at 2, 6.  Petitioner contends that it underwent five infectious disease controls surveys with no deficiencies found, and it is a “gross overstatement” to find the facility’s IPCP ineffective because of the two “unrelated, isolated incidents” during the June 2022 survey.  Id. at 6-7. 

Petitioner further argues that its standard survey did not take place within 15 months of its last standard survey, and given the circumstances, that it should get the benefit of the doubt for the delay.  Id. at 6, 10.  CMS acknowledges that “a state survey agency must survey a SNF annually, with no more than fifteen months elapsing between surveys.”  CMS Br. at 7.  However, CMS argues that the delay was “permissible, reasonable, and required under the circumstances,” explaining that the delay was necessary due to a change in priorities because of the COVID-19 pandemic.7 Id. at 8-9. 

I find Petitioner’s arguments unpersuasive.  A SNF is expected to be in substantial compliance with Medicare participation requirements at all times.  Life Care Ctr. of Tullahoma, DAB No. 2304 at 60 (2010) (citing 42 C.F.R. §§ 488.3(a)[(1)], 488.20), aff’d sub nom. Life Care Ctr. of Tullahoma v. Sec’y of U.S. Dep’t of Health & Hum. Servs., 453 F. App’x 610 (6th Cir. 2011).  A single incident that establishes a failure to provide the 

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requisite care may be a sufficient basis for finding that a facility was not in substantial compliance with a participation requirement.  Golden Oaks Med. Care Facility, DAB No. 2470 at 6 (2012); Ridge Terrace, DAB No. 1834 at 16 (2002) (single observation by surveyor of inappropriate peri-care was sufficient to support deficiency finding). 

Though Petitioner categorizes the cited infection control deficiencies as “isolated, minor incidents,” it nonetheless failed to comply with infection control requirements and its actions had the potential to cause more than minimal harm to its residents.  Petitioner’s compliance history has no bearing on whether Petitioner failed to substantially comply with the requirements of 42 C.F.R. § 483.80 during the June 2022 survey. 

I therefore find CMS has established a prima facie case that Petitioner was not in substantial compliance with 42 C.F.R. § 483.80, and given that Petitioner has conceded the violations giving rise to the deficiency, Petitioner has failed to show that it was in substantial compliance with federal participation requirements during the June 2022 survey. 

2. 2. The $5,000 per-instance CMP imposed is reasonable.

I have concluded that Petitioner failed to comply with 42 C.F.R. § 483.80.  I must now decide whether the CMP amount imposed for Petitioner’s noncompliance is reasonable. 

When determining whether a CMP amount is reasonable, I apply the factors listed in 42 C.F.R. § 488.438(f):  1) the facility’s history of noncompliance; 2) the facility’s financial condition; 3) the factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of culpability, which includes neglect, indifference, or disregard for resident care, comfort, or safety.  See 42 U.S.C. §§ 1320a-7a(d)(2), 1395i-3(h)(2)(B)(ii)(I).  The absence of culpability is not a mitigating factor.  42 C.F.R. § 488.438(f)(4).  The factors listed in 42 C.F.R. § 488.404 include: 1) the scope and severity of the deficiency; 2) the relationship of the deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior history of noncompliance in general and specifically with reference to the cited deficiencies.  See 42 U.S.C. §§ 1320a-7a(d)(1), (3), 1395i-3(h)(2)(B)(ii)(I). 

The regulations leave the decision regarding the choice of remedy to CMS, and the amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at 42 C.F.R. §§ 488.438(f) and 488.404 be considered when determining the amount of a CMP within a particular range.  42 C.F.R. §§ 488.408, 488.408(g)(2), 498.3(d)(11); see also 42 C.F.R. § 488.438(e)(2), (3); Alexandria Place, DAB No. 2245 at 27 (2009); Kenton Healthcare, LLC, DAB No. 2186 at 28-29 (2008).  “[T]here is a presumption that CMS has considered the regulatory factors in setting the amount of the CMP and that those factors support the CMP amount imposed by CMS.”  Coquina Ctr., DAB No. 1860 (2002).  Unless a facility contends that a particular regulatory factor does not support the CMP amount, an ALJ must sustain it.  Coquina, DAB No. 1860. 

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In support of the CMP amount, CMS cites to its policy memorandum QSO-20-31-All, which provided guidance to state survey agencies during the COVID-19 pandemic, including guidance on enhanced enforcement for infection control deficiencies.  CMS Ex. 13 at 4-6.  The relevant section of QSO-20-31-All states: 

• [S]ubstantial non-compliance (D or above) with deficiencies associated with Infection Control requirements at F880 will lead to the following enforcement remedies:
  • Nursing homes cited for current non-compliance that is not widespread (Level D & E) - Directed Plan of Correction
  • Nursing homes cited for current non-compliance with infection control requirements that is widespread (Level F) - Directed Plan of Correction, Discretionary Denial of Payment for New Admissions with 45-days to demonstrate compliance with Infection Control deficiencies.
• Non-compliance for Infection Control Deficiencies cited once in the last year (or last standard survey):
  • Nursing Homes cited for current non-compliance with infection control requirements that is not widespread (Level D & E) -Directed Plan of Correction, Discretionary Denial of Payment for New Admissions with 45- days to demonstrate compliance with Infection Control deficiencies, Per Instance Civil Monetary Penalty (CMP) up to $5[,]000 (at State/CMS discretion).

Id. at 5.  (Emphasis added). 

Petitioner argues it did not have a deficiency in the year before the June 2022 survey and had several surveys between December 2019 and June 2022 with no infection control deficiencies.  P. Br. at 8-9.  Given the delay in its standard survey, Petitioner contends it should get the benefit of the doubt for the delay for circumstances beyond its control.  Id. at 6, 10.  Additionally, Petitioner cites to the findings of an independent reviewer based on her interpretation of the CMS guidance.  P. Br. at 4.  CMS acknowledges that Petitioner’s recertification survey did not take place within the year before the June 2022 

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survey but argues the survey delay was reasonable, and the Petitioner was nonetheless out of compliance during its last standard survey.  CMS Br. at 11-12. 

The guidance set forth in QSO-20-31-All is not binding in these proceedings and is not a factor I may consider.  The Board has consistently held that CMS manuals, instructions, or policy “guidance” do not have the force of law.  BGI Ret., LLC, DAB No. 2620 at 10 (2015).  Furthermore, CMS properly considered the applicable factors based on the regulations in determining the CMP.  CMS Ex. 10.  Thus, Petitioner’s arguments based on the proper interpretation of the CMS guidance are inapposite.  Additionally, a facility’s history of noncompliance is a factor specifically enumerated in the regulation, and therefore, Petitioner’s past noncompliance in the December 2019 survey is a factor to be considered in this matter.  

Petitioner has not raised arguments regarding its financial condition, but Petitioner does assert that while it does not dispute the facts regarding the deficiency, the CMP is not “congruent with similar facility citations” for “worse facts.”  P. Ex. 18 at 2.  This argument fails because the Board has held that this type of assertion is a challenge to the level of noncompliance or choice of remedy.  Jewish Home of E. Pa., DAB No. 2254 at 14 (2009), aff’d, Jewish Home of E. Pa. v. Ctrs. for Medicare & Medicaid Servs., 693 F.3d 359 (3d Cir. 2012).  I do not have the authority to review either.  Id. 

Finally, the parties have raised arguments regarding Petitioner’s history of noncompliance, which is a factor I may consider.  42 C.F.R. § 488.438(f)(1).  Petitioner contends the CMP is unreasonable based on its compliance history.  Again, Petitioner cites to four COVID-19 infection control surveys where it was found to be in compliance with recommended practices to prepare for COVID-19 as well as an April 2022 complaint investigation that did not result in an infection control deficiency.  P. Exs. 2-5, 17. 

CMS has offered evidence to show that Petitioner has a history of noncompliance which includes repeated noncompliance with the infection control regulations.  CMS Exs. 1, 3, 5.  While I acknowledge Petitioner’s performance on prior infection control surveys, I cannot disregard the Facility’s prior infection control deficiency.  Additionally, Petitioner’s prior infection control deficiency was also at the “D” level.  CMS Ex. 11 at 5.  The regulations require that a facility establish and maintain an infection control program to “provide a safe, sanitary, and comfortable environment” and to “prevent the development and transmission of communicable diseases and infections.”  42 C.F.R. § 483.80.  It is undisputed that Petitioner failed to comply with this mandate prior to the deficiency in the instant case.  Finally, the regulations permit a range of $2,400 - $23,989 for CMPs imposed for an instance of noncompliance.  45 C.F.R. § 102.3 (2022) (adjusted for inflation); 42 C.F.R. 488.438(a)(2) (providing original CMP amounts before statutory inflation adjustments).  The CMP sought here falls at the lower end of the range.  Applying the relevant factors, I find that the CMP is reasonable. 

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IV. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance with 42 C.F.R. § 483.80.  I further conclude the $5,000 per-instance CMP is reasonable.