The Yukio Okutsu State Veterans Home has been fined more than $500,000 after a COVID-19 outbreak at the Hilo facility resulted in the deaths of 27 residents last fall, according to state health officials.

Keith Ridley, who heads the Hawaii Department of Health’s office that oversees longterm care facilities, told state lawmakers Thursday that the federal Centers for Medicare & Medicaid Services sent the home an enforcement letter this week.

He said the letter notifies the facility of the civil monetary penalties that the feds have assessed based on state and federal inspections last fall.

“This is the highest I’ve ever seen on any facility here in Hawaii,” Ridley told a joint Senate panel that was hearing legislation stemming from the deadly outbreak.

The 95-bed facility saw at least 71 residents and 35 employees test positive for COVID-19 during the outbreak that started Aug. 28.

Utah-based Avalon Health Care, which managed the home at the time, agreed in September to transfer control of the facility to the East Hawaii Region of the Hawaii Health System Corp. after pressure from state and federal elected officials. The state officially took over Jan. 1.

Kaui Chartrand, the new HHSC administrator for the home, did not respond to a message seeking comment Friday. Messages left with the state DOH were also not returned Friday.

State and federal health inspectors found numerous violations when they surveyed the home in September and October — several months after the pandemic began.

The inspections found instances of residents with dementia wandering the halls after the outbreak began and a culture of “respecting individual resident rights over the health of the general population.” 

Avalon has denied any wrongdoing while blaming state agencies. The company also criticized U.S. Sen. Brian Schatz for getting involved after he grew concerned about the spike in deaths.

Ridley said the company has the right to appeal the fine. 

John McDermott, Hawaii’s longterm care ombudsman, said he has never heard of such a high fine even nationally. But he said it must be taken seriously when so many people died and it was at least to some degree avoidable.

“They made a lot of preventable mistakes regarding infection control,” he said. 

Chartrand, the new administrator, has a lot of work to do, McDermott said. She will need to retrain staff and win back the confidence of a community where “everybody knows everybody.”

In a statement, Lt. Gov. Josh Green, a physician and Big Island resident, said he was devastated by the loss of life at the veterans home last year.

“It’s important the regulators appropriately assess the full circumstances there and take action so this doesn’t happen again,” he said.

In addition to the civil fine of $510,640, a state DOH release says remedies imposed on the facility include the denial of payment for new admissions and a directed plan of correction.

Read the letter from CMS to the facility below.