Health Law Daily Wrap Up, COVID-19—DAB DECISIONS: Immediate jeopardy findings upheld where residents are not properly isolated per policies, (Feb 24, 2026)

By Jeffrey H. Brochin, J.D.

Despite local health authority advising SNF Administrator to wait for actual lab test results before isolating a resident who tested positive with a rapid test, no such provision existed in the infection control policies for a delay.

The HHS Departmental Appeals Board (DAB or Board) Civil Remedies Division has upheld the ruling of CMS (with slight exception) that an SNF facility (Petitioner) was not in substantial compliance with Medicare regulations pertaining to COVID-19 infection control. The Petitioner failed to adhere to its own policies regarding same, or, failed to follow CDC Guidelines when dealing with residents who tested positive for COVID-19. However, as to the allegations that hospice workers were not tested on certain days, there was no facility policy, regulatory requirement, or guidance that required the facility to test its employees on certain days, and therefore that claim did not establish noncompliance (Ashford Hall, DAB No. CR6440, Doc. No. C-22-321 (Mar. 17, 2025)).

State survey findings. On November 27, 2020, surveyors from the Texas Health and Human Services Commission (state agency) completed a complaint/incident investigation at the Petitioner’s facility. Based on the survey findings, CMS determined that the facility was not in substantial compliance with federal requirements for nursing homes participating in the Medicare and Medicaid programs. Specifically, CMS found that the facility did not meet the federal requirements as to Infection Prevention and Control. As a result, CMS imposed a $8,417.00 per-day civil money penalty (CMP) for 12 days, beginning November 16, 2020 and continuing through November 27, 2020, for a total of $101,004.00. The Petitioner then took the instant appeal.

Mandatory Infection Control program. Section 1819(d)(3) of the Act mandates that a skilled nursing facility must: (A) establish and maintain an infection control program designed 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 to protect the health and safety of residents, personnel, and the general public.

Consistent with section 1819(d)(3), 42 C.F.R. §483.80(a) requires the facility to "establish and maintain an infection prevention and control program designed to provide a safe, sanitary, and comfortable environment and to help prevent the development and transmission of communicable diseases and infections.”

Petitioner’s Infection Control policy. The evidence established that Petitioner did adopt an infection control program for COVID-19 that included rigorous testing, monitoring, and quarantine provisions to ensure that COVID-19 infections did not spread to its residents and staff; and, with one exception, CMS did not challenge the specifics of that policy, nor did CMS allege that Petitioner's policy failed to comport with accepted national standards for protection against COVID-19 infection. Instead, CMS alleged that the facility ignored its own infection and control policies, as well as guidance from the Centers for Disease Control and Prevention (CDC) by failing to quarantine residents that tested positive for COVID-19; separate residents who were COVID-19 positive, negative, and presumed positive or unknown; monitor residents for signs and symptoms of COVID-19 and document findings in the residents' medical records, as well as other deficiencies.

Quarantine/separation policy. The facility had a policy governing placement of residents who tested positive for COVID-19, which required the facility to establish a Separation-Quarantine Zone for increased separation of residents suspected of, presumed to be, or who had tested positive for COVID-19. The policy designated the end of station 200 as the Separation-Quarantine zone.

On November 20, 2020, Resident 2 (R2) tested positive for COVID-19 and was appropriately transferred to the 200 Hall unit, which was designated as the COVID-19 isolation unit. A Licensed Vocational Nurse (LVN) cared for R2 in the isolation unit on November 20, 2020 and he was the only resident there. However, when she worked again on November 23, 2020, R2 was back in his original room in the 100 Hall and she then helped move him back again to the COVID-19 isolation unit. CMS alleged that this was a violation of the facility's own policy because it moved an infected resident back to a Hall of non-infected residents or residents with unknown COVID-19 status, thereby creating the risk of infecting them. The Board noted that an SNF must do more than merely adopt such a program as its internal policy, rather, the regulation also requires that the SNF implement the program's prescribed precautions. The Board accordingly agreed with CMS that the Petitioner was not in substantial compliance with 42 C.F.R. § 483.80(a)(1)(2)(4).

Residents #3, #4, #5, and #7 (R3, R4, R5, and R7). R3, R4, R5, and R7 tested positive for COVID-19 on November 22, 2020, based upon a rapid test, and there was no dispute that they remained in the 100 Hall until November 23, 2020, when they were moved to the COVID-19 isolation unit in the 200 Hall. CMS alleged that the failure to immediately isolate or quarantine R3, R4, R5, and R7 after they tested positive for COVID-19 was a violation of the facility's own policy. Petitioner disputed that it failed to quarantine the residents after they tested positive for COVID-19, asserting that the four residents could not be moved immediately because it took time "to determine where to move them and then physically move them and their belongings. In addition, it alleged that "because point of care testing was not as reliable as the lab tests, the Dallas County Health and Human Services (DCHHS) contact told the Administrator to wait until the positive tests were confirmed by a lab before moving the residents to the positive (hot) wing."

Again, the Board agreed with CMS that the delay constituted a violation because there was no provision in the policy requiring the facility to wait for permission from the local health authority before moving COVID-19 positive residents, or to even notify the local health authority before moving COVID-19 residents to the isolation unit. To the contrary, the facility's own policy stated it should place a resident who exhibits symptoms of the infectious disease in an isolation room and (then) notify local health authorities. Accordingly, the Board found that failure to move the residents “immediately” amounted to substantial noncompliance with infection control requirements.

Testing of hospice staff. There was no dispute that both facility policy and CMS guidance required testing of hospice workers before entering the facility. CMS guidance provided that health care workers who were not employees of the facility—but who provided direct care to the facility's residents, such as hospice workers—must be permitted to come into the facility as long as they were not subject to a work exclusion due to an exposure to COVID-19 or show signs or symptoms of COVID-19 after being screened.

A CMS Interim Final Rule required that facility staff, including volunteers and caregivers, be tested during an outbreak and re-tested every 3 to 7 days until testing identified no new cases of COVID-19 infection among staff or residents for a period of at least 14 days. The problem here for the Board was that there was no persuasive or reliable evidence to establish that the facility allowed untested hospice workers to enter the facility and care for residents. Therefore, CMS failed to make a prima facie showing that hospice workers were allowed to enter the facility without providing evidence of a timely negative COVID-19 test. Accordingly, the Board found this noncompliance allegation unsupported by the record.

In sum, the Board concluded that the facility was not in substantial compliance with 42 C.F.R. §483.80(a) and that the immediate jeopardy determination was not clearly erroneous. They further found that a per-day CMP of $8,417.00 for 12 days beginning on November 16, 2020 and continuing through November 27, 2020, for a total of $101,004.00 to be reasonable.

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