Shuksan care center faced debt, improper care violations before coronavirus, records show

A Bellingham skilled nursing facility now suffering from a severe COVID-19 outbreak was in a deep financial crisis last year that threatened to shutter the facility and faced numerous citations for improper care of its residents, according to federal inspection data reviewed by The Bellingham Herald.

The documents show a facility in turmoil even before the coronavirus swept through Washington state. To date, six residents at the Shuksan Healthcare Center on James Street have died after testing positive for COVID-19, and nearly two dozen staff members have been infected. In total, 31 residents at the facility have tested positive for the new coronavirus since the start of the outbreak.

In late August 2019, the facility’s then-owner, WAATU Inc., was $800,000 behind on lease payments for two buildings, including their James Street facility. The company separately owed the IRS $618,000 in back taxes, as well as hundreds of thousands of dollars in other fines, fees and services, according to federal inspection data from the Centers for Medicare & Medicaid Services.

The inspection in early September 2019 also found the facility lacked a governing body that was supposed to be created to oversee WAATU Inc. and hold the company accountable. These issues created two “immediate jeopardy” violations at the facility, which is the most severe violation issued by federal inspectors.

The federal reports also show more than 100 lower-level violations over the past three years for allegedly administering the wrong medication doses, failing to have adequate staffing, and failing to honor resident’s requests, among other issues identified by inspectors.

There were a total of 14 “immediate jeopardy” violations across Whatcom County nursing homes in the past three years for which data was publicly available. Among those, Shuksan received the most serious scores — described as “widespread immediate jeopardy” — among the county’s nursing homes.

At Shuksan, the facility’s financial crisis last year also led a pharmacy vendor to say it would stop supplying medication for residents, and triggered a change in ownership of the facility several days later, according to the reports.

Dan Brady, a spokesperson for Shuksan, said the “immediate jeopardy” violations occurred under the previous ownership and were just as the new owners were taking over, and that all of the issues “have a plan of correction that has been accepted by Residential Care Services.”

As of Dec. 1, 2019, Shuksan has been owned by Hyatt Family Facilities, which owns four other skilled nursing facilities and two assisted-living facilities in Washington state.

Jeff Hyatt, the owner, has also appointed a regional director of operations and brought in new facility management, including an administrator, director of nursing services and an infection-prevention specialist, according to Brady.

“Thanks to new ownership, the facility is not in a financial crisis,” Brady said.

Brady defended the staff at the facility, who he said “are working very hard to provide the best care possible to their residents — and at some risk to their own health.”

“The people working at this building today are ‘firefighters running into the burning building,’ heroes risking their own health to serve vulnerable seniors,” he said, “just like nursing home employees in probably more than 100 facilities in America today where it is present.”

The outbreak at the facility was announced on March 22 by the Whatcom County Health Department. Brady said Shuksan has been able to test more widely than other nursing facilities impacted by COVID-19, which may account for the numbers of positive tests.

As of March 28, Brady said Shuksan did not know how the virus entered the facility. Brady said residents went to appointments and outings on a regular basis, and had families and vendors enter the facility on a daily basis prior to the first positive new coronavirus tests. He also said they have staff who work at other facilities.

Some residents are not long-term and receive services such as physical, occupational or speech therapies, for a short time before returning home. Those residents were admitted from PeaceHealth St. Joseph hospital, Brady said.

Hundreds of thousands in debt

In late August, a CMS inspection found Shuksan Healthcare Center was nearly $2 million behind in payments for the leases, to the IRS, its vendors and for employee health insurance. It resulted in an “immediate jeopardy” violation on August 29, 2019.

The report found that the financial crisis put the residents at Shuksan at risk of “not receiving necessary care and services or causing a risk of a facility closure.” It also found that WAATU was aware of the late payments and that there were threats to discontinue services, according to the report.

A pharmacy that supplied both of WAATU’s nursing homes said the company owed the pharmacy $329,000, and that it would stop supplying the nursing homes if they didn’t receive the money by the following day in late August.

The pharmacy owner had also considered taking out a lien against WAATU, the report states. An emergency payment of $53,000 was approved the next day.

In an inspection interview on Aug. 23, the chief financial officer for Shuksan, who was not named in the report, confirmed the bills were behind and that WAATU also owed the IRS $618,000. The CFO said the money was owed because WAATU didn’t pay the facility’s payroll taxes for two months.

Minutes later in the interview, the CFO told the federal inspector “he had thought of walking away, but he said there were about 200 residents and 300 employees that he was committed to,” across WAATU’s nursing homes. Shuksan had a total of 41 residents living at the facility during this time.

Later in the interview, the CFO told inspectors that the health provider for employees told him they wouldn’t provide healthcare to the employees if the bills weren’t paid by early September. Records show WAATU owed tens of thousands in employee-benefit coverage.

Shuksan was issued a second “immediate jeopardy” violation in late August because the facility failed to have a governing body that oversaw WAATU and ensured the bills were paid in a timely manner, the CMS report states.

The governing body consisted of WAATU owner Jim Roe and the CFO. In an inspection interview, Roe said, “there was no appointed governing body or system in place to develop policies or hold (Roe) accountable, since (Roe) was the owner and decision-maker of the building and the company.”

Both immediate jeopardy violations were removed on Sept. 4, 2019, when CMS verified the facility was changing ownership and management. The facility also worked with vendors to make sure they wouldn’t discontinue services and created a new governing body to oversee the new owner.

Roe said the company had operational and managerial control of Shuksan after September 1999 after its previous owners went through bankruptcy proceedings.

Roe said the financial issues and citations at the facility were driven by low Medicaid rates and rising wage costs. He said the gap between the cost of caring for a resident and what Medicaid would pay grew larger over the last several years, and that nursing facilities depend on that source for roughly 80 percent of their revenue.

As the pool of caregivers for nursing facilities shrunk, wages also didn’t compete with jobs outside the industry, Roe said.

“We have by far the most citations per facility … so there’s plenty of evidence that that shot up when the payment problem became so acute,” Roe said. “So the harm is right there for everyone to see, including the legislators that set the rates.”

Roe said the Hyatt family, who had leased the facility to WAATU, had supported WAATU financially over the past several years, including loaning them more than a million dollars. Roe said Medicaid payments to the facility didn’t support competitive wages to hire and retain quality staff.

“It’s very, very hard work, both emotionally and physically,” Roe said of caregivers at the facility. “Sadly the losers in all this mess are the residents and their families.”

History of health citations

Federal records show that before the ownership change to Hyatt Family Facilities, the Bellingham facility faced numerous violations for falling behind on patient care.

In addition to the two “immediate jeopardy” violations, Shuksan Healthcare Center received 49 other violations, many of them minor, between March 1, 2019, and March 4, 2020, according to CMS data.

In the past three years, Shuksan has had a total of 106 violations, including a third “immediate jeopardy” violation in February 2017 in which a resident had three separate life-threatening incidents around October 2016. The total number of violations was the third highest out of the nursing homes in Whatcom County for which data was available.

Brady, the spokesperson for Shuksan, said the facility was not in a position to discuss all the citations that occurred prior to the sale and change in management.

“But as you can see from the inspection reports, many of the previous citations were ‘low level’ citations, meaning that the issue was not widespread and there was little or minimal impact,” Brady said.

Previous inspection reports show violations for failing to honor resident’s bathing frequency requests and failing to have enough nursing staff every day to meet residents’ needs.

In a 26-day period between late May and late June 2019, a resident received only one bath/shower. The resident told an inspector she bathed daily at home, but couldn’t remember receiving a shower since being admitted to the facility.

The inspector noted the resident’s hair was greasy, records show. Another resident had also only received one sponge bath since he was admitted to the facility, but told inspectors repeatedly that he wanted to receive a bath at least weekly.

In a meeting with a council made up of residents in mid-June 2019, the residents told an inspector that there were too few nurses on the night shift and the only way to communicate with them was to press a call light. The residents said they would sometimes have to call out to get someone to answer, records state. Other residents told the inspector they had to wait lengthy amounts of time to get their lights answered for pain medication.

“On the weekends it is a madhouse because someone is always calling in, we are short,” one resident told the inspector about staffing. “They don’t listen to us, they make decisions but don’t understand. They don’t know what goes on, just what they see on paper. Nights and weekends are the worst.”

In interviews with staff, they told the inspector that they were understaffed and didn’t have enough people on call or to pick up shifts.

“It makes me feel frustrated and I feel bad to tell the resident it is taking so long,” one staff member told the inspector.

“I have learned that I am unable to be the super (nursing assistant certified) that I wanted to be,” another said.

Roe said management staff were spending half or three-quarters of their days trying to make sure there was enough nursing staff to take care of residents.

“Really it became all-consuming. You have a workforce that is unstable because of wages and that’s not where you get quality care,” Roe said. “Caregiving needs to become a liveable wage profession if you want good care.”

Incorrect medication doses

Only one of the lower-level violations in the past three years was for an infection prevention and control issue. In that case, a registered nurse used gloves that had been in the same pocket as a crumpled tissue while she gave a shot to a resident.

The nurse then put the used needle in the medication cart trash can, instead of a one-way container, the report states. The nurse later gave another shot to a resident without a glove on. The nurse told an inspector that wasn’t her usual practice, the report states.

In the same citation, a staff member mopped up a liquid spill on the floor without a glove on, and then delivered a food tray to a resident’s room without washing his hands before, the report states.

The most recent citation for Shuksan from early March 2020 showed the facility failed to give correct medication doses to two residents, requiring one to be hospitalized.

In an unannounced survey done at Shuksan on March 4, a team from Residential Care Services with the state Department of Social and Health Services found that a resident admitted in mid-February was supposed to receive short-acting insulin.

The resident was given her insulin, but was noted to be “diaphoretic and shaky” at 10 a.m., so staff monitored the resident’s blood sugar throughout the day. At 6:45 p.m., the resident was taken to the hospital, where she stayed overnight, the report states.

A review found the resident had received 100 times the dose of insulin she was prescribed, the report states. The resident’s husband said he was “uneasy” about his wife’s return to the facility, but after speaking with her primary care doctor, he felt better about her going back.

A licensed practical nurse told inspectors that she thought the insulin order was suspicious, but knew the resident had a history of high blood sugar levels, the inspection report states. The error in the medication was determined to be because the electronic medical record defaulted to the wrong unit for administering insulin, the records show. A registered nurse said she was embarrassed the mistake had passed through so many hands, the report states.

After the mistake, the director of nursing services said those involved were disciplined and would be monitored in the future, and a new diabetic management policy was put in place, the records state.

In September and October of 2019, the facility was also cited for failing to investigate possible abuse or neglect for a resident who didn’t have her call light answered and was forced to urinate in a nearby trash can and for a resident who fell and fractured a knee, the CMS data shows.

In late October and early November 2019, the facility administered 16 extra doses of an antibiotic medication to a resident after the intended stop date, 13 of which were at the wrong dose level, a November report shows.

And in May and June 2019, the facility was cited for failing to ensure at least four residents were receiving proper nutrition and hydration, leading to rapid weight loss for some.

A third immediate jeopardy

The third “immediate jeopardy” violation for Shuksan occurred in February 2017, when a resident who had a severe allergy to peanuts and tree nuts was given an ice cream treat with peanuts during an activities outing in late October 2016, the report states.

The resident “appeared distressed and flushed, had labored breathing,” and was given medication before a physician ordered the resident be taken to the hospital, the report states. The hospital concluded the resident had had an allergic reaction.

Six weeks later, the same resident again had food containing peanuts and had to be given emergency medication because the resident had redness in her face, the report states.

Further records indicated that about two months prior to the first allergic reaction, the same resident had the Heimlich maneuver performed on her because she choked while eating, and had turned purple and blue and wasn’t breathing, the report states.

A separate resident who was also included in the “immediate jeopardy” report was hospitalized in mid-December 2016 for pain management.

Roe said he took responsibility for the past citations, but said they were exacerbated by the gap between Medicaid payments and the cost of caring for residents.

“Our regulatory compliance also suffered as Medicaid rates fell further and further from meeting facility costs, and I take responsibility for that,” Roe said. “When you have less experienced and fewer staff there is only so much you can do, it’s incredibly disheartening.”

McClatchy reporter Jason Pohl contributed to this report.

This story was originally published April 5, 2020 at 5:00 AM.

Denver Pratt

The Bellingham Herald

360-715-2236

Reporter Denver Pratt joined The Bellingham Herald in 2017 and covers courts and criminal and social justice. She has worked in Montana, Florida and Virginia. She lives in Alger, Wash.

JP

Jason Pohl

The Sacramento Bee

Jason Pohl was an investigative reporter at The Sacramento Bee.