STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
WECARE, )
)
Petitioner, )
)
vs. ) CASE NO. 91-1955
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, final hearing in the above-styled
case was held in Sanford and Tallahassee, Florida, on November 6 and December 9 and 10, 1991, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.
APPEARANCES
The parties were represented at the hearing as follows: For Petitioner: Karen L. Goldsmith
Goldsmith & Grout, P.A.
2709 Fairbanks Ave.
Winter Park, FL 32790-2611
For Respondent: Karel Baarslag, Senior Attorney
HRS Medicaid Office 1317 Winewood Blvd. Building Six, Room 234
Tallahassee, FL 32399-0700 STATEMENT OF THE ISSUE
The issue in this case is whether Petitioner is
entitled to an interim rate increase, under the Florida Title XIX Long-Term Care Medicaid Reimbursement Plan, as a result of costs incurred to meet new federal or state requirements imposed upon nursing facilities certified to participate in the Florida Medicaid Program. The recommended order does not address the cost-settlement process that follows, a determination that Petitioner is entitled to an interim rate increase. Facts necessary to cost-settle were not in existence at the time of the hearing.
PRELIMINARY STATEMENT
By letter dated December 13, 1990, Petitioner requested an interim rate increase for its nursing facility located in
Wildwood, Florida. By letter dated February 15, 1991, Respondent
denied the request. On March 1, 1991, Petitioner filed a Request for Formal Administrative Hearing.
At the final hearing, Petitioner called five witnesses and offered into evidence 26 exhibits. Respondent called two witnesses and offered into evidence 6 exhibits All exhibits were admitted. Respondent Exhibit F, which was reserved for
additional portions of the Connie Cheren videotape, was not filed following the hearing, so it is deemed withdrawn.
On December 2, 1991, Respondent filed a Motion to
Dismiss for Mootness/Motion for Official Recognition. Ruling on the motion is set forth in the Conclusions of Law below.
A transcript was filed. Each party filed a proposed recommended order. Treatment of the proposed bindings is detailed in the appendix.
FINDINGS OF FACT
Background
Petitioner 1/ owns and operates a licensed nursing facility certified to participate in the Florida Medicaid Program. The facility, which is located at 490 South Old Wire Road, Wildwood, Florida, first became a Medicaid provider on January 27, 1987.
Expanded from 120 beds to 180 beds prior to March, 1988, the average occupancy of WeCare is 175-176 residents. The Medicaid patient census is usually over 140 residents. Petitioner operates the only nursing facility in Sumter County providing skilled nursing services.
By letter dated December 13, 1990, Petitioner requested an interim rate increase. The letter covers the 12-month period commencing October 1, 1990, which is the
effective date of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA). Petitioner requested an interim rate hike of
$2.53 per patient day based on a total increase in expenses, due largely to OBRA requirements, of $161,815.32.
By letter dated February 15, 1991, Respondent
denied the request. The letter fails to address $114,415.32 in anticipated costs, mostly in the areas of nursing and new- resident assessment. These items were inadvertently omitted from Petitioner's December 13 letter.
The February 15 response divides projected expenses into two categories: patient care costs and operating costs. The letter treats as patient care costs projected expenditures for food and employee wages to expand evening programs for residents, added consultant expenses for pharmaceutical advice, added consultant expenses for assistance with overall OBRA
compliance and preparation for the state survey, new costs due to quality assurance committee meetings with department heads and outside consultants, and additional wages resulting from an
increase in the federal minimum-wage standard. The February 15 letter treats as operating costs projected expenditures for the disposal of hazardous waste and maintenance requested by WeCare's resident council.
Florida's Hedicaid Reimbursement Plan
The Florida Title XIX Long-Term Care Reimbursement
Plan , Version III, dated December 17, 1990 (Plan) 2/ is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Medicaid program pays a single per diem rate for all levels of nursing care.
After a facility's first year of operation, a cost- settling process results in a final cost report, which serves as a baseline for the following years. Following the first year's operation, facilities file cost reports annually. In the absence of a special rate freeze, Respondent adjusts a facility's reimbursement rate twice annually based upon the factors discussed below.
There are four components of a facility's total per diem rate for Medicaid patients. These cost components make up the total Medicaid patient per diem cost. The return on equity component 3/ is not involved in this case.
The property cost component plays a minor role in this case. In a facility such as WeCare, which is owned rather than leased, property costs include depreciation, mortgage interest, equipment rent, ad valorem taxes, and property insurance.
The two key reimbursement components in this case
are "operating costs" and "patient care costs." The Plan defines these terms as follows:
Patient care costs include those costs directly attributable to nursing services, dietary costs, activity costs, social service costs, and all medically ordered therapies.
All other costs, exclusive of property cost and return on equity or use allowance costs are considered operating costs.
Plan, pages 40-41.
In general, the reimbursement program sets rates prospectively followed by a cost-settling process. In other words, a rate is set for the coming period in the manner described below. At the end of the period, a cost-settlement takes place. There are limited exceptions to the prospective orientation of the rate-setting process:
the prospectively determined individual nursing home's rate will be adjusted. retroactively to the effective date of the
affected rate under the following circumstances:
an error was made by [Respondent] in the calculation of the provider's rate.
A provider submits an amended cost report used to determine the rate in effect. An adjustment due to the submission of an amended cost report shall not be granted unless the increase in documented costs shall cause a change of 1 percent in the reimbursement rate. The amended cost report shall be filed by the filing date of the subsequent cost report or the date of the first field audit exit conference for the period being amended or the date a desk audit letter is received by the provider for the period being amended, whichever is earlier.
Further desk or on-site audits of cost reports disclose a change in allowable costs in those reports.
Plan, pages 31-33.
In this case, Petitioner seeks "interim changes in [its] component reimbursement rates, other than through the routine semi-annual rate setting process." Plan, page 33. Like normal reimbursement rates, interim rates are set prospectively and then cost-settled at the end of the interim rate period. Plan, page 2.
Accounting for property costs under the Fair Rental Value System (FRVS), Petitioner is ineligible for an
interim change in Medicaid reimbursement rate under the Plan. Petitioner's sole means to obtain rate relief for property costs is to file for a rate adjustment as of January 1 and July 1 of any year. Plan, page 33-34.
On January 1 and July 1, Petitioner may obtain an adjustment to the FRVS rate if "expenditures for capital additions and improvements totalling, $100 per licensed bed accrue in the 6-month periods ending April 15 or October 15 prior to rate semesters beginning July 1 and January 1, respectively." Plan, page 72. Because Petitioner has 180 beds, the threshold for the FRVS property cost adjustment is thus $18,000. The Plan does not require that the acquired property for which the rate adjustment is sought be purchased to comply with a new legal requirement.
The reimbursement process is quite different for patient care and operating costs. Addressing interim rate hikes for these components of the reimbursement rate, the Plan provides:
Interim rate changes reflecting increased costs occurring as a result of patient care
or operating changes shall be considered only if such changes were made to comply with
existing State or Federal rules, laws, or standards, and if the change in cost to the provider is at least $5000 and would cause a change of 1 percent or more in the providers current total per diem rate.
If new State or Federal laws, rules, regulations, licensure and certification requirements, or new interpretations of existing laws, rules, regulations, or licensure and certification requirements require providers to make changes that result in increased or decreased patient care, operating, or capital costs, requests for component interim rates shall be considered for each provider based on the budget submitted by the provider. All providers' budgets submitted shall be reviewed by [Respondent] and shall be the basis for establishing reasonable cost parameters.
In cases where new State or Federal requirements are imposed that affect all providers, appropriate adjustments s1hall be made to the class ceilings to account for changes in costs caused by new requirements effective as of the date of the new requirements or implementation of the new requirements, whichever is later.
Interim rate requests resulting from 1. [devoted to property component interim rate hikes sought by non-FRVS providers] and 2. above must be submitted within 60 days after the costs are incurred, and shall be accompanied by a 12-month budget which
reflects changes in services and costs.
. . . An interim reimbursement rate, if approved, shall be established for estimated additional costs retroactive to the time of the change in services or the time the costs are incurred, but not to exceed 60 days before the date [Respondent] receives the interim rate request. The interim per diem rate shall reflect only the estimated additional costs, and the total reimbursement rate paid to the provider shall be the sum of the previously established prospective rates plus the interim rate. . .
Interim Rate Settlement. Overpayment as a result of the difference between the
approved budgeted interim rate and actual costs of the budgeted item shall be refunded to [Respondent]. Underpayment as a result of the difference between the budgeted interim rate and actual costs shall be paid to the provider.
Interim rates shall not be granted for fiscal periods that have ended.
The determination of interim reimbursement rates
is best illustrated by following the Plan through the typical rate-calculation process. A facility must first "calculate per diems for each of these four cost components [patient care, operating, property, and return on equity] by dividing the components' costs by the total number of Medicaid patient days from the latest cost report." Plan, page 41.
The facility adjusts its "operating and patient
care per diem costs that resulted from [the calculation set forth in the preceding paragraph] for the effects of inflation .
Plan, page 41. This is done by "multiplying both of these per diem costs" by the rate of increase of the Florida Nursing Home Cost Inflation Index at the midpoint of the cost reporting period. Plan, page 41. This step takes the facility's per diem rates then in effect for the patient care cost and operating cost components and increases them by the applicable inflation rate.
The facility calculates the adjustment for a low occupancy factor. In all cases, the operating, patient care, and return on equity components are calculated separately.
Otherwise, this step is irrelevant to the present case. Plan, pages 41 et seq.
The next step is to calculate the statewide
ceilings for, among other components,, the patient care cost and operating cost. These ceilings are determined separately, as evidenced by the use of different standard deviations in the calculation of the respective ceilings. Plan, page 47. These ceilings are otherwise irrelevant to the present cases
The Plan next requires the facility to
"[e] stablish the target reimbursement for operating and patient care cost per diems for each provided." The target per diems limit the respective per diem rates of these two components even if the applicable ceilings and inflation adjustments otherwise warrant a rate increase. In other words, a facility's per diem rate for patient care may be below the ceiling and warrant an increase for inflation; however, the increased rate may not exceed the target rate.
The "target" more frequently than the "ceiling" serves to limit rate increases for the operating cost per diem rate and patient care cost per diem rate. For each of the two
per diem rates, the target limits the increase of the provider's then-current per diem rate, without regard to incentives, to the rate of increase of the Florida Nursing Home Cost Inflation Index multiplied by 1.786. Plan, pages 48 -49.
The Plan requires each facility to calculate separately its operating cost per diem and patient care cost per diem. For each component, the Plan "requires that the facility receive the lowest of the rates--then-current plus inflation, target, or ceiling. Plan, pages 49-50. Thus, for instance, the patient care component could be limited by its target but the operating component could receive a full inflation increase.
The importance of interim rate changes is that
they increase the reimbursement rate against which the targets are calculated for operating and patient care cost per diem rates. In this manner, the interim rate hike raises the applicable targets. As noted above, if the new federal or state requirements affect all providers, the ceilings can also be raised, although this issue has not been addressed in this case.
Cost Reports
Three of Petitioner's cost reports were admitted
into evidence. Two cover one-year periods ending June 30, 1989, and June 30, 1990. One covers a six-month period ending December 31, 1990.
The most recent cost report includes a request by Petitioner to obtain a FRVS property cost rate adjustment for computer and software hardware purchased in the last six months of 1990. The report classifies these items as property for cost reimbursement purposes. The cost report is relevant as evidence of the proper classification of computer hardware and software and the proper means by which an FRVS provider may obtain an adjustment for additional property costs. 4/
The parties disagree as to which of the two
earlier cost reports should be used to supply the threshold for Petitioner's request for an interim rate hike with respect to operating and patient care costs. Respondent insists that the source of Petitioner's "current total per diem rate," against which the 1% threshold is applied to determine eligibility for the interim rate hike, is the cost report for the year ending June 30, 1989.
However, on or about October 30, 1990, Petitioner
filed a cost report for the year ending June 30, 1990 (1990 cost report). This was about six weeks before applying for an interim change in the reimbursement rate. Respondent ignores the later cost report because it was filed late. However, there is no authority prohibiting the use of the more current cost report simply because it is filed late, at least when, as here, it is filed before the interim rate request is filed. 5/
For calculating the thresholds in this case, there
is no difference in which cost report is used. Both parties used
$38,000 as the threshold, which is sufficiently accurate under the facts of this case. The possible thresholds are $36,071
under the 1990 cost report 6/, which is hereby adopted, and $34,350 under the cost report for the prior year. 7/
New Cost Items
Although the original request for an interim rate hike identifies more than $160,000 of new expenses necessitated by changes in the law, Petitioner refined its earlier estimate
based on actual experience prior to the hearing. The new figure is $126,598.32, as identified at the hearing and in Petitioner Exhibit 42. 8/
Petitioner claims that changes in the law necessitated the following costs, which are stated, where applicable, as increases in expenses preexisting changes in the relevant law:
PATIENT CARE PLANNING/RESTRAINT FREE ENVIRONMENT--SALARY
NURSING 30,027.52
NURSING ASSISTANTS 19,762.73
DIETARY 4,073.23
TOTAL WAGES 53,863.48
TOTAL BENEFITS 10,234.06
TOTAL WAGES AND BENEFITS 64,097.54
ADMINISTRATIVE NURSING
WARD CLERK 3,500.00
DATA ENTRY 513.00
IN-SERVICE EDUCATION 6,403.21
TOTAL WAGES 10,416.21
TOTAL BENEFITS 1,979.08
TOTAL WAGES AND BENEFITS 12,395.29
CONSULTANTS TO ASSURE COMPLIANCE WITH OBRA
PHARMACY 440.00
SOCIAL SERVICE 250.00
DIETARY 1,093.75
TOTAL 1,783.75
AUTOMATION OF MDS AND RESIDENT TRUST FUND ACCOUNTING
OUTSIDE DATA PROCESSING SERVICE 3,033.75
COMPUTER SOFTWARE 2,495.00
COMPUTER HARDWARE 1,540.00
TOTAL 7,068.75
MISCELLANEOUS OBRA MATTERS
PRINT RESIDENTS' RIGHTS MATERIALS 401.05
B. GERIATRICS SURVEY AND TRAINING | 500.00 |
C. ABUSE REGISTRY | 285.00 |
D. WAGE AND HOUR FOR MAINTENANCE | 11,178.00 |
E. MAINTENANCE BENEFITS | 2,123.81 |
TOTAL 14,487.86
VI. | OTHER REGULATORY CHANGES | |
A. MINIMUM WAGE | 13,827.84 | |
B. MINIMUM WAGE BENEFITS | 2,627.29 | |
C. CHANGES IN OBRA/NFPA 9/ STANDARD | 7,412.99 | |
D. REMOVAL OF INFECTIOUS WASTES | 2897.01 |
10/
TOTAL 26,765.13
GRAND TOTAL $126,598.32
Classification of New Cost Items
Cost items IV.B, IV.C, and VI.C. are property costs representing $2495 and $1540 for computer software and hardware and $7412.99 for privacy curtains around residents'
beds. Petitioner has failed to prove that these items, whose costs appear suitable for depreciation or cost-recovery, constitute patient care costs or operating costs.
As property costs, Cost Items IV.B, IV.C, and VI.C are ineligible for an interim rate adjustment. Even if
Petitioner had requested a FRVS property cost adjustment and thus raised the issue in this case, these items total only $11,447.99, which is below the $18,000 threshold for FRVS property cost rate adjustments. Because of the failure of these items to satisfy the threshold, as well as the fact that changing legal requirements are irrelevant to an adjustment in the property cost reimbursement rate, the remainder of the recommended order does not address Cost Items IV.B, IV.C, and VI.C.
Cost Item VI.D, which is $2897.01 for infectious- waste removal, is an operating cost that is not a patient care cost.
Cost Items VI.A and B, which are for $16,455.13 in wages and benefits due to an increase in the minimum-wage law, are operating costs that are partly patient care costs. Based partly on the testimony of Petitioner's accountant, one-half of the minimum wage and benefits, such as in the laundry and housekeeping departments, is an operating cost that is not a patient care cost. The remainder of the minimum wage and benefits is a patient care cost. Thus, $8227.57 of Cost Items
VI.A and B is an operating cost that is not a patient care cost, and $8227.56 of Cost Items VI.A and B is a patient care cost.
Cost Items V.D and E, which are for $13,301.81 in
maintenance wages and benefits, are also operating costs that are partly patient care costs. These items represent an incremental increase over typical maintenance costs previously incurred by the facility. Petitioner has proved that two-thirds of the additional maintenance costs are patient care costs expended to address better the needs of the residents, such as by providing immediate repairs to wheelchairs or making their rooms more homelike by, for example, hanging bulletin boards in the rooms, installing personal television sets, and installing locks on cabinet drawers. Thus, $8867.88 of Cost Items V.D and E are patient care costs. The evidence as to the remaining $4433.93 of Cost Items V.D and E is sufficient to establish these expenditures as operating costs, but insufficiently descriptive to prove that these maintenance expenses are properly classified as patient care costs.
Cost Item VI.D, one-half of Cost Items VI.A and B, and one-third of Cost Items V.D and E total $15,558.51 in operating costs that are not patient care costs. This is below the $34,350 threshold required for an interim rate hike for operating costs. Due to the possibility that Respondent may reject the Conclusion of Law that the patient care costs and operating costs must separately satisfy the threshold, the remainder of the recommended order discusses Cost Item VI.D.
Description of Cost Items
Background
Prior to making any changes at the WeCare nursing facility following the effective date of OBRA, Petitioner was in full compliance with all applicable law and had earned and maintained a superior rating. None of the cost items was expended to eliminate pre-OBRA substandard conditions.
In addition, patient needs were generally
unchanged during the year preceding the effective date of OBRA and the following year. In other words, there were no
significant changes in patient mix with respect to activity, levels of admissions and discharges, or other matters affecting costs.
The largest portion of Petitioner's claim is Cost Item I, which comprises $64,097.54 in wages and benefits for
nurses, nurse assistants, and dietary services. The nursing item is for 1.43 fulltime equivalents, the nursing assistant item is for 1.9 fulltime equivalents, and the dietary item is for 0.35 fulltime equivalents.
Following the implementation of OBRA, WeCare
changed its resident assessment forms. Previously, the facility had used primarily a standard admission record and nursing history and assessment to assess initially the new resident.
These forms required about one-half hour per patient to complete.
The new standardized assessment form has become
known as the Minimum Data Set (MDS). The 11-page MDS is a highly sophisticated instrument that requires comprehensive data
collection far more elaborate than that previously undertaken. These data must be obtained from the resident and, in many cases, other sources. The MDS also contains an intricate analytic section.
In general, the MDS standardizes the resident- assessment process by which nursing staff collect and analyze data, form conclusions, and recommend interventions. The MDS is also a major step toward assembling a national database on the burgeoning population of nursing-facility residents.
Even without regard to the analytic features of
the MDS, the old resident assessment forms are different by kind, not degree, from the MDS. The new form requires that the facility's personnel invest considerably greater time and effort assessing each resident's functional abilities. The MDS elicits a richly detailed description of an individual and his needs and abilities, and many questions in the MDS require careful and thoughtful observation of the resident.
For instance, the first page of the MDS requires important information concerning the resident's legal status. The array of options include legal guardian, durable power of attorney/health care proxy, health care surrogate, and family member. The same page also demands that the facility personnel determine if the resident has effectuated a living will, do-not- resuscitate code, organ donation, feeding or medication restriction, or autopsy request. Encouraging the resident's involvement with the outside community, the first page concludes by asking if the resident is registered to vote.
The second page deals with cognitive patterns. This section also places demands on facility personnel considerably greater than those required by the old resident
assessment forms. Personnel must check the resident's short- term and long-term memory and his ability to recall the current season, location of his own room, faces of staff, and his presence in a nursing facility. Personnel must assess the resident's ability to make decisions; the four options range from independent to severely impaired. Personnel must also assess the resident's tendency toward disordered thinking or delirium with five optional specific descriptions, such as "cognitive ability varies over course of day."
Twenty-five options are contained in the section
of the MDS covering the resident's ability to communicate. These data range from whether he wears a hearing aid or uses another receptive communicative technique such as lip reading to very detailed descriptions of the extent to which he can make himself understood and, in a separate set of questions, understand others.
The level of detail is intense throughout the MDS. Other areas covered include physical functioning and structural problems (with 12 options to describe the resident's body control problems ranging from loss of balance to loss of limbs); continence; psychosocial wellbeing (including his level of
identification with past roles and life status); mood and behavior patterns; activity pursuit patterns; disease diagnoses (32 options); health conditions (22 options); oral/nutritional status; skin condition; medication,' use; and special treatment and procedures.
The analytic aspect of the MDS is contained in the Resident Assessment Protocol (RAP). The RAP references by letter and number nearly all of the answers," supplied on the MDS. The RAP legend supplies a matrix by which these answers are analyzed to determine if they require (trigger) an identified intervention. The RAP even quantifies the extent to which an intervention is likely necessary. These triggers are very detailed and quantify a decision-making process that gas subjective and necessarily more variable prior to the introduction of the MDS.
The MDS takes at least one hour more to complete
per resident than did the old forms. Petitioner's personnel have tried to avoid duplication. However, Respondent cited Petitioner for a deficiency involving their elimination of one of the pre- OBRA forms in WeCare's first audit following implementation of OBRA. Moreover, quarterly updates of the MDS take additional time, although only selected information is required at such times.
Recognizing the increased importance of the initial resident assessment, Petitioner assigned the primary responsibility for the task to the three nurses who serve as
coordinators of the three 60-bed units at WeCare. While working on the MDS forms, the unit coordinators' responsibilities are assumed by licensed nurses. The additional work presented by the MDS over the old form requires 1.43 licensed nurse fulltime equivalents. The cost of this is reflected in Cost Item I.A, which is $30,027.52, exclusive of benefits. Benefits were calculated in Petitioner Exhibit 8 at 19% of wages, so the benefits attributable to Cost Item I.A equal $5705.23.
Petitioner has failed to establish that the
nursing assistants, reflected as cost Item I.B, were required by to complete the new MDS form or any-other new OBRA requirement. The substance of Petitioner's evidence in this regard amounts to proving that: a) no other variables (e.g., change in patient mix or number) could account for the increased hours and b) nursing assistant hours increased after OBRA became effective. Without specific proof of the activities performed by the nursing assistants, it is impossible to determine if their efforts were necessitated by OBRA, such as in the MDS-assessment process, or were merely associated with nonrecurring activities by which facilities such as WeCare digested OBRA and tried to determine the extent to which they had to change prior practices.
It is doubtful that Petitioner could have established the requisite relationship between the nursing
assistant work and the MDS duties. Cost Item I.A is a reasonable allowance for the new work required of nurses by the MDS forms.
Exclusive of benefits, $30,027.52 represents 1.43 fulltime nursing equivalents or about 2980 hours annually of nursing service. There is no evidence in the record linking the expenditure of additional nursing hours to the preparation of the MDS forms, even after consideration of the more limited quarterly reassessments. Petitioner likewise failed to establish that any new OBRA requirement, including the preparation of the MDS, was associated with the dietary cost of $4073.23, which is Cost Item I.C.
Petitioner proved that Cost Items II.A and B,
totalling $4013 of wages and $762.47 of benefits, were associated with the processing of the data collected in the process of preparing the MDS. The data-processing duties of these individuals are a necessary part of processing the RAPs and triggers in the MDS and determining if an intervention is indicated or required.
The ward clerk and data entry person relieved the Director of Nursing of data-processing duties that, unlike the data-collection part of the MDS, do not require nursing expertise to perform. The processing of the RAPs and triggers, although important and time-consuming, is largely mechanical task.
Petitioner proved that Cost Item IV.A, which is
$3033.75 for outside data processing services, was also associated with the processing of the data collected in the process of preparing the MDS. These services ran from October, 1990, through April, 1991, when the ward clerk and data entry person assumed these duties. The outside data processing, as well as the ward clerk and data entry person, also included trust fund and asset accounting on behalf of residents.
Petitioner failed to establish that the services
of the in-service coordinator, as reflected in Cost Item II.C, were required by OBRA. Prior to OBRA, the Director of Nursing performed nearly all of the in-service activities. When OBRA was implemented, the Director of Nursing, could not perform these tasks because she was, at first, intensely involved with all aspects of ensuring that WeCare attained or maintained compliance with the new law.
A nursing facility and its personnel must remain familiar with federal and state laws governing nursing facilities and their professions. However, nothing in OBRA required new levels of in-service education of nursing facility staff. By contrast, Petitioner proved that the promotion of residents' rights and welfare necessitated Cost Item V.B, which is $500 for a geriatrics survey and training. Petitioner showed that the services of Myra Carpenter, which are Cost Item V.B, were narrowly focused to assist Petitioner's personnel in promoting the rights and welfare of geriatric residents.
Cost Items I.A and V.B are sufficient to allow for whatever training was necessary of the unit coordinators in charge of completing the MDS forms and general facility personnel as to the promotion of the rights of residents, especially geriatric residents.
Petitioner failed to prove that Cost Items III.A, and C, which are $440 for pharmacy and $1093.7.5 for dietary
consultants, were associated with army new OBRA requirement. As discussed in the Conclusions of Law, prior state requirements in these areas were rigorous. For the same reason, Petitioner failed to prove that OBRA necessitated Cost Item V.A, which is
$401.05 for printing residents' rights manuals.
Petitioner proved that the promotion of residents' rights and welfare was directly responsible for Cost Item III.B, which is $250 for a social service consultant. He increased his hours after OBRA to meet the demands of the residents and the residents' council for operational and structural changes at WeCare.
Petitioner proved that the promotion of residents' rights and welfare was also associated with the two-thirds of Cost Items V.D and E previously determined to constitute patient care costs. 11/ The portion of these maintenance wages and benefits assigned to patient care costs constitute part of Petitioner's effort to promote the rights and welfare of the residents. Many of WeCare's residents are young persons who, often afflicted with multiple sclerosis, still possess considerable mental acuity. Adjustment to the environment of a nursing facility can be difficult for such persons, as well as for other residents. Empowering the residents to demand and obtain changes in their living environment is one useful means of promoting the residents' rights and, especially, welfare.
The evidence was unconvincing that all of Cost Items V.D and E were devoted to the type of patient-care maintenance described in the preceding paragraph. Petitioner
thus failed to establish the nature of the remaining one-third of Cost Items V.D and E. In the absence of proof to the contrary, these expenditures are characterized merely as operating expenses unassociated with any aspect of OBRA.
Respondent has emphasized OBRA's promotion of residents' rights and welfare in seminars devoted to OBRA and post-OBRA facility surveys. As to the latter, the surveys of WeCare prior to OBRA typically took a couple of hours. Following OBRA, the surveys take four hours with much of the additional time devoted to resident interviews to ensure that the facility is promoting residents' rights and, especially, welfare.
The OBRA mandates, as properly construed by Respondent, increasingly emphasize results or outcome's, not merely processes or procedures. Although OBRA largely leaves to the nursing facility the decision of how specifically to promote residents' rights and welfare, the new requirements of OBRA, as
discussed in the Conclusions of Law, remain clear, ambitious, and
enforceable. Cost Items III.B, V.B, and two-thirds of V.D and E, although not explicitly dictated by OBRA, were reasonably expended by Petitioner to promote residents' rights and, especially, welfare.
Petitioner has proved that Cost Item VC, which is
$285 for checking the names of employees on the abuse registry, was associated with a new OBRA requirement.
The minimum-wage hike and benefits, which are Cost Item VI.A and B totalling $16,455.13, were mandated by a change in law and exclude any "ripple-effect" in other wages Petitioner proved that one-half of the minimum.-wage hike and benefits or $8227.56, are patient care costs. The remaining
$8227.57 of minimum-wage hike and benefits, which obviously were also mandated by law, are operating costs that are not patient care costs.
The only other operating cost that is not a
patient care cost is Cost Item VI.D, which is $2897.01 for the removal of infectious wastes. Petitioner has proved that the additional costs in connection with the disposal of infectious wastes were associated with a change in state law.
Based on the foregoing, Petitioner has proved that
$61,672.41 of its expenditures are patient care costs associated with new OBRA requirements and a change in the minimum-wage laws. Petitioner failed to prove that the remaining $37,919.41 of its patient-care costs were associated with any change in law.
Petitioner has proved that $11,124.58 of its expenditures are operating costs, other than patient care costs, that were associated with new infectious waste regulations and minimum-wage laws. Petitioner failed to prove that tie remaining
$4433.93 of operating costs, which are one-third of the maintenance wages and benefits, were,' associated with any change in law.
The remaining $11,447.99 of Petitioner's expenditures are property costs. For the reasons set forth above, the necessity of these costs is irrelevant to this proceeding.
CONCLUSIONS OF LAW
Jurisdiction
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes. All references to Rules are to the Florida Administrative Code. All references to CFR s are to the Code of Federal Regulations.)
Respondent's Motion to Dismiss for Mootness/Motion for Official Recognition filed December 2, 1991, is denied. Respondent argues that the proceeding is moot because the
Department of Health and Human Services (HHS), by letter dated November 12, 1991, determined that Respondent is in compliance with OBRA. According to the HHS letter, Respondent provided supporting evidence that the current payment rate accounts for the costs of a nursing facility to comply with OBRA.
The HHS determination-has nothing to do with the present case. Based largely upon Respondent's assurances and without the benefit of an evidentiary hearing, HHS approved Respondent's long-term care Medicaid plan. Whatever standards governed this determination have little, if any, bearing on the question whether Petitioner is entitled to an interim rate hike under the provisions of the Plan. The issues in the present case require a construction of the Plan and not a determination whether the Plan is satisfactory to HHS.
Requirements of Law
The MDS Form
CFR ss483.1 et seq. have been promulgated pursuant to OBRA. CFR s483.20 requires a nursing facility to "conduct initially and periodically a comprehensive, accurate, standardized, reproducible assessment of each resident's functional capacity." The assessment is to be based upon a "uniform data set specified by the Secretary . . . that [d]escribes the resident's capability to perform daily life functions and significant impairments in functional capacity." CFR s483.20(b)(1). This uniform data set is the MDS.
Other relevant requirements concerning the MDS are that the assessment must be done at least every 12 months and reviewed each three months. CFR s483.20(b)(4)(v) and (5). The results of the assessment are used to "develop, review, and revise" the care plan, but not replace the care plan. CFR s483.20(b) (6).
The MDS must be "conducted or coordinated with the appropriate participation of health professionals." CFR s483.20(c)(1)(i). Each assessment must be signed and certified by a registered nurse. CFR s483.20(c)(1)(ii). Each person completing part of the MDS must also certify the accuracy of the portion that he prepared. CFR s483.20(c)(2). Anyone who "willfully and knowingly certifies (or causes another to certify) a material and false statement in a resident assessment is subject to civil money penalties." CFR s483.20(c) (3)
Most of the requirements imposed upon resident assessments prior to OBRA are set forth in Rule 10D-29.109. This rule combines the requirements of assessments and preliminary care plans. State law neither explicitly nor implicitly requires that the assessment be comprehensive, standardized, and reproducible or that the preparers of the assessment certify to its accuracy under threat of a monetary penalty.
State requirements are for a medical "plan of
care," which must consist of a "primary diagnosis, identification
of resident's problems, medical history, findings of physical examination, [doctor's] orders, and rehabilitative . potential." Rule 10D-29.109(6) (a).
State requirements are also for a nursing "assessment" and "plan of care." The nursing assessment must consist of a "statement of nursing needs and problems and self- care limitations with the assistance needed in performing
activities of daily living." Rule 10D-29.109(6)(b). The nursing care plan must consist of "short-term, resident-centered, measurable goals; medications, special orders, diagnostic tests, and treatments as ordered by the resident's physician; and priorities for care." Rule 10D-29.109(6)(c).
Rule 10D-29.109(7) requires a comprehensive resident assessment, which must consist of "identification of long-term goals for the resident; identification of care and services needed to achieve those goals; and the team members
responsible for provision of care and services needed to achieve those goals." Updates to the care plan must take place at least quarterly and must include an evaluation of the success of the care plan and "identification of new problems." Rule
10D-29.109(7) (c) .
The MDS mandated by OBRA is more comprehensive and time-consuming to prepare than the old forms. The federal
requirement that the preparers assume personal, liability for the accuracy of the information, as a practical matter, demands that the personnel completing the assessment take the time to obtain and analyze all required information. Perhaps as important as the required comprehensiveness of the assessment are the OBRA requirements that the results of the assessment be standardized and reproducible. The achievement of these objectives is responsible for much of the detail required in the data- collection portion of the MDS and much of the intricacy of the analytic portion of the MDS.
Promotion of Residents' Rights and Welfare
Not entirely unrelated to the MDS provisions described in the preceding section, federal regulations require that the facility promote the residents' welfare. CFR s483.25 states:
Each resident must receive the necessary nursing, medical and psychosocial services to attain and maintain the highest possible mental and physical functional statute, as defined by the comprehensive assessment and plan of care. Each resident must receive and the facility must provide the necessary care and services to attain or maintain the highest practicable physical, mental, and psychosocial well-being, In accordance with the comprehensive assessment and plan of care.
83. CFR s483.25(a)(1) and (2) adds::
Based on the comprehensive assessment of a resident, the facility must ensure that--
A resident's abilities in activities of daily living do not diminish unless circumstances of the individual's clinical condition demonstrate that diminution was unavoidable. This includes the resident's ability to--
Bathe, dress and, groom;
Transfer and ambulate;
Toilet;
Eat; and
To use speech, language or other functional communication systems.
A resident is given the appropriate treatment and services to maintain or improve his or her abilities specified in paragraph (a)(1) of this section
The promotion of residents' rights is addressed by s483.10, which provides:
The resident has a right too a dignified existence, self-determination, and communication with and access to persons and services inside and outside the facility. A facility must protect and promote the rights of each resident, including each of the following rights:
* * *
(b)(1) The facility must inform the resident both orally and in writing in a
language that the resident understands of his or her rights . . .
* * *
(c)(3)(i) The facility must deposit any resident's personal funds in excess of $50 in an interest bearing account . . . that is separate from any of the facility's operating accounts, and that credits all interest earned on the resident's account to his or her account.
* * *
(c)(4) Effective [October 1, 1990 , the facility must establish and maintain a system that assures a full and complete and separate accounting, according to generally accepted accounting principles, of each resident's personal funds entrusted to the facility on the resident's behalf.
* * *
(5) Effective October 1, 1990, the facility must notify each resident that receives Medicaid benefits--
When the amount in the resident's account reaches $200 less than the SSI resource limit for one person, specified in section 1611(1)(3)(B) of the Act, and
That, if the amount in the account, in addition to the value of the resident's other nonexempt resources, reaches the SSI resource limit for one person, the resident may lose eligibility for Medicaid or SSI.
* * *
(m) The resident has the right to retain
and use personal possessions, including some furnishings, and appropriate clothing, as space permits, unless to do so would infringe upon the rights or health or safety of other residents.
CFR s483.13 deals with restraints and psychoactive drugs, as well as the employment of certain individuals at the facility:
(a) The resident has the right to be free from any physical restraints imposed or psychoactive drug administered for purposes of discipline or convenience, and not required to treat the resident's medical symptoms.
* * *
(c)(1)(ii) The facility must--not employ individuals who have been convicted of abusing, neglecting or mistreating individuals.
CFR s483.15 requires that a facility "care for its residents in a manner and in an environment that promotes maintenance or enhancement of each resident's quality of life." The rule adds:
The facility must promote care for residents in a manner and in an environment that maintains or enhances each resident's dignity and respect in full recognition of his or her individuality.
The resident has the right to--
* * *
(3) Make choices about aspects of his or her life in the facility that are significant to the resident.
* * *
(c)(5) The facility must provide a designated staff person responsible for providing assistance and responding to written requests that result from group meetings;
(6) When a resident or family group exists, the facility must listen to the views and act upon the grievances and
recommendations of residents and families concerning proposed policy and operational decisions affecting resident care and life in the facility.
* * *
(h)(1) The facility must provide--a safe, clean, comfortable and homelike environment, allowing the resident to use his or her personal belongings to the extent possible
State law only partly corresponds to CFR s483.25, which requires that the facility attain and maintain the highest possible mental and physical functional status and highest practicable physical, mental, and psychosocial well-being. Rule 10D-29.108(5)(b)12 requires nursing measures to:
promot[e the] resident's self-concept or self-esteem through promotion of resident independence and self-care activities designed to assist the resident in maintaining an optimal level of functioning in the activities of daily living.
Rule 10D-29.108(5)(b)16.b states that rehabilitative and restorative nursing care shall include:
(III) Activities of daily "living. Nursing services personnel shall encourage, and when necessary, teach residents' to function at their maximum level in appropriate activities of daily living, for as long as and to the degree that they are able.
* * *
(VI) Nursing services personnel shall assist residents in the psychosocial acceptance of their limitations and assist them in redirecting their interests and activities, when necessary.
However, there are considerable differences
between the state and federal provisions concerning the extent to which the facility must promote the residents' welfare. Federal provisions require that the nursing facility deliver medical and psychosocial, as well as nursing, services, while the state provisions speak only in terms of nursing services. The state provisions require promotion of self-concept or self-esteem, but the federal requirements demand that the nursing facility deliver the services necessary to achieve the "highest practicable" "physical, mental and psychosocial well-being."
The more demanding nature of the federal
regulations concerning residents' welfare is reinforced by the other cited requirements of s483.25--most notably that, unless "clinical" circumstances render the loss unavoidable, the nursing facility must "ensure" that a resident's functional abilities, including communications skills, "do not diminish." Further, the nursing facility must provide the services--not necessarily
limited to nursing, which is the case with the above-cited state authority--required to maintain or improve the resident's functional abilities.
The correspondence between federal and state law is closer with respect to residents' rights. CFR s483.10
requires a nursing facility to "protect and promote" a resident's rights. Section 400.022(1)(a), Florida Statutes (1990), gives the resident the "right to encouragement and assistance from the staff of the facility in the fullest possible exercise of [the] rights [of civil and religious liberties, including knowledge of available choices and the right to individual personal decisions]." Section 400.022(1), Florida Statutes (1990), requires the facility to adopt and make public a statement of residents' rights. Section 400.022(1)(i), Florida Statutes (1990), recognizes the resident's right "to be treated courteously, fairly, and with the fullest measure of dignity." Rule 10D-29.105(4) requires each nursing facility to furnish each resident, upon admission, "a copy of the facility's retention, transfer, and discharge policies." Section 400.022(1)(j), Florida Statutes (1990), extends to residents the right to be free from physical and chemical restraints. Section 400.022(1)(m), Florida Statutes (1990), gives the resident the right "to retain and use personal clothing and. possessions as space permits."
Federal law requires the facility to accept, in trust, funds of a resident, credit these funds with interest in most cases, and advise the resident when his account reflects
assets that may jeopardize his eligibility for Social Security or Medicaid. No state law, including the provisions of Section 400.162, Florida Statutes (1990), imposes similar requirements.
Section 400.022(1)(d), Florida Statutes (1990), merely gives the resident the right to delegate his financial affairs to the facility.
Nothing in Chapter 400, Part I, Florida Statutes (1990), requires that a facility screen employees on the Florida Abuse Registry. Cf. Section 415.51(4), Florida Statutes (1990). Although Section 464.008(1)(c), Florida Statutes (1990) requires applicants for nursing licensure to be screened on the registry, this law would not affect persons already licensed as nurses or nonlicensed personnel employed at a nursing facility. Likewise, Section 464.008(1)(c) imposes no obligation upon the nursing facility, as OBRA does.
To the extent that parts of Cost Items II.A and B
and IV.A concern trust fund and asset accounting, as opposed to MDS processing, these parts are clearly required by OBRA's new accounting requirements, including those pertaining to the crediting of interest and warning of imminent SSI and Medicaid ineligibility due to "excessive" assets. Cost Item V. C, which is the abuse registry expense, is also an explicit OBRA requirement not found in prior law.
Cost Items III.B, which is the social service consultant, and V.B, which is the geriatrics training consultant,
are closely linked to OBRA's new emphasis on the promotion of residents' rights and, especially, welfare. Although not explicitly required by OBRA, these items represent Petitioner's reasonable implementation of new OBRA requirements.
Cost Items V.D and E, which are maintenance wages
and benefits, have already been allocated one-third to operating expenses due to the insufficiency of the proof describing these items. The same insufficiency precludes a conclusion that OBRA required the expenditures of one-third of Cost Items V.D and E.
The remaining two-thirds of Cost Items V.D and E, which amount to less than $50 per resident annually, represent Petitioner's reasonable implementation of OBRA's required new emphasis on the promotion of residents' rights and, especially, welfare. The focus on OBRA on outcomes rather than process leaves considerable discretion on the part of the facility as to how to achieve the rigorous requirements of OBRA in terms of resident welfare.
Cost Item VI.D, which is the removal of infectious wastes, is required by new law. Rules 10D-104.001, et seq., introduced new requirements upon all persons handling and disposing of hazardous wastes. These rules became effective April 3, 1990. Likewise, Cost Items VI.A and B reflect a change in the minimum-wage law that became effective shortly before Petitioner filed its request for an interim rate hike.
Summary
Patient Care Costs
99. Cost Items I.A and part of I.C, which total
$35,732.75, are required by the OBRA-mandated MDS. Cost Items
II.A and B, plus related benefits, and IV.A, which total
$7809.22, are also required by the same provisions of OBRA, as well as other OBRA provisions regarding trust fund accounting for interest and asset accounting for SSI and Medicaid eligibility.
Cost Items III.B, V.B, and two-thirds of V.D and E, which total $9617.87, represent Petitioner's reasonable
implementation of OBRA requirements regarding the promotion of residents' rights and, especially, welfare.
Cost Item V.C, which is $285, is required by
OBRA's prohibition against the employment of certain persons.
One half of Cost Items VI.A and B, which totals
$8227.56, is required by changes in the minimum-wage law.
2. Operating Costs
One-half of Cost Items VI.A and B, which total
$8227.57, is required by changes in the minimum-wage law.
Cost Item VI.D, which is $2897.01, is required by changes in state law regulating hazardous wastes.
3. Calculating the Interim Rate
The Plan establishes separate thresholds for
patient care costs and operating costs that are not patient care costs. Each rate is calculated separately, such as with respect to low-occupancy factors, ceilings, and targets. Each component is stated separately on the annual cost report. By contrast, the retroactive adjustment mentioned in Findings of Fact Paragraph 11 allows patient care costs and operating costs to be aggregated in determining if the applicable threshold has been met for a retroactive adjustment. The language of the interim rate provisions is clear and does not contemplate the aggregation of these components in determining if the threshold has been met.
Petitioner's qualifying patient care costs, as set forth in Conclusions of Law Paragraphs 29-32, total
$61,672.41. The remaining $37,919.41 of patient care costs were not shown to be required by changes in the law. However, the qualifying patient care costs of $61,672.41 exceeds the $36,071 threshold.
Petitioner's qualifying operating costs, as set forth in Conclusions of Law Paragraphs 33 and 34, total
$11,124.58. The remaining $4433.93 of operating costs were not required by changes in the law. The qualifying operating costs of $11,124.58 fail to satisfy the $36,071 threshold.
The property costs of $11,447.99 do not qualify
for consideration as part of the present request for an interim rate hike.
Pursuant to the Plan, only the qualifying patient care costs may be included in the interim rate adjustment. Dividing these costs of $61,672.40 by the total patient days in the 1990 cost report of 64,412, the resulting interim rate adjustment is $0.96 per diem.
Based on the foregoing, it is hereby RECOMMENDED that the Department of Health and
Rehabilitative Services enter a final order determining that
Petitioner is entitled to an interim rate adjustment of $0.96 per diem.
ENTERED this 20 day of March, 1992, in Tallahassee, Florida.
ROBERT E. MEALE
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 20 day of March, 1992.
ENDNOTES
1/ Actually, Wildwood Healthcare, Inc. owns and operates the subject facility, which is known as WeCare.
2/ The parties did not contest the applicability of this version of the Plan.
3/ This is sometimes referred to as the use allowance.
4/ Based on different acquisition, costs, the computer and software may be different from those discussed below.
5/ The cost report was due by September 30, 1990. Plan, page
1. However, a late-filing provider is not terminated from the Medicaid program until its cost report is late by six months. Plan, page 3. Neither the Plan nor the remainder of the record indicates that the "penalty" for a late-filed "report is that Respondent may ignore the per diem cost figures from the most recent cost report. At least when these figures are being used to determine if a provider has satisfied a threshold for entitlement to an interim rate hike, such a "penalty" is an advantage to the provider. The lower per diem rates applicable in earlier years mean lower thresholds and easier eligibility.
6/ One percent of the 1990 cost report per diem reimbursement rate is $0.55. When multiplied times 64,412 total patient days, the result is $36,071.
7/ One percent of the 1989 cost report per diem reimbursement rate is also $0.55. When multiplied times 62,455 total patient days, the result is $34,350.
8/ In Petitioner's proposed recommended order, the total costs are $121,991.95. The only difference between the two sets of figures is that the proposed recommended order omits $1979.08 of benefits for "administrative nursing" and $2627.29 of benefits for "minimum wage."
9/ National Fire Protection Association.
10/ This item is for the addition of privacy curtains.
11/ As found in Findings of Fact Paragraph 35, s8867.88 of maintenance wages and benefits are patient care costs..
APPENDIX
Treatment Accorded Proposed Findings of Petitioner 1-8: adopted or adopted in substance.
9: rejected as unsupported by the appropriate weight of the evidence.
11-12: adopted.
13-15: rejected as subordinate. 16: adopted in substance.
17: rejected as unsupported by the appropriate weight of the evidence.
18-19: adopted or adopted in substance. 20: rejected as recitation of testimony. 21-22: adopted.
23 (first three sentences): rejected as irrelevant.
23 (remainder): adopted.
24: adopted as to changes discussed in Findings of Fact. 25: adopted.
26: rejected as recitation of evidence.
27: adopted in part and rejected in part as legal argument. The state statutes regarding the exercise of residents' rights, as well as the rights themselves, have been cited in the Conclusions of Law.
28, 34, 43-44, 46, and 48: rejected to the extent of implication that expenditure was required by new law.
29: rejected as unnecessary.
30: adopted to the extent indicated in the Findings of Fact.
31-32: rejected as unsupported by the appropriate weight of the evidence.
33: adopted in substance.
35: rejected as unsupported by the appropriate weight of the evidence.
36-40 and 42: adopted.
41: adopted as to OBRA requirements, but state law required updates as well.
45, 47, 49-54, and 57: adopted.
55-56: rejected as unsupported by the appropriate weight of the evidence.
58: rejected as irrelevant.
Treatment Accorded Proposed bindings of Respondent 1-2: adopted.
3-17: rejected as subordinate.
18-22 and 25: adopted in substance to extent relevant. 23-24, 29, 35,: rejected as recitation of testimony and unsupported by the appropriate weight of the evidence.
26-28: rejected as irrelevant in view of new OBRA requirements concerning analysis of data in the MDS and trust fund and asset accounting.
30: rejected as irrelevant.
31-34: rejected as unnecessary except as to Myra Carpenter's services; on this point, rejected as unsupported by the appropriate weight of the evidence.
36, 38-43, 46,: adopted to the extent a finding of fact.
37: rejected as unsupported by the appropriate weight of the
evidence.
44: rejected as not finding of fact.
45 and 49: rejected as unsupported by the appropriate weight of the evidence.
47-48: rejected as irrelevant.
50-53 and 55: rejected as subordinate and recitation of evidence.
54 and 56-58: adopted or adopted in substance.
59: rejected as unsupported by the appropriate weight of the evidence.
60: adopted, but rejected to the extent of the implication that the late report could not be used to set the threshold.
61 and 63: adopted.
62, 64, 67, 68-69, and 72: rejected as irrelevant.
65: adopted.
66: adopted, although operating and patient care costs must each satisfy the threshold.
70: rejected as recitation of testimony and irrelevant. 71: adopted.
73: rejected as recitation of testimony.
74-77: rejected as recitation of evidence, subordinate, and irrelevant.
78: adopted in substance. 79: rejected as subordinate.
80-81 (first sentence): rejected as, recitation of testimony.
81 (second sentence): rejected as unsupported by the appropriate weight of the evidence.
82: rejected as recitation of testimony. 83-84 and 87-88: rejected as irrelevant.
85-86, 89, 92, and 98 (first sentence): rejected as subordinate.
90 and 98 (second sentence): rejected as recitation of testimony.
91: rejected as irrelevant.
93: rejected as subordinate and irrelevant.
94: rejected as recitation of testimony and subordinate. 95-97: rejected as recitation of testimony and irrelevant.
98 (third sentence): adopted.
COPIES FURNISHED:
Robert B. Williams, Secretary
Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
John Slye, General Counsel
Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
Sam Power Agency Clerk
Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, FL 32399-0700
Karen L. Goldsmith Goldsmith & Grout, P.A. 2709 Fairbanks Ave.
Winter Park, FL 32790-2011
Karel Baarslag, Senior Attorney HRS Medicaid Office
1317 Winewood Blvd. Building Six, Room 234 Tallahassee, FL 32399-0700
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
WECARE,
vs.
Petitioner, CASE NO.: 91-1955 RENDITION NO.: HRS-92-360-FOF-MDC
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). The Recommended Order entered March 20, 1992, by Hearing Officer Robert E. Meale is incorporated by reference.
RULING ON EXCEPTIONS FILED BY WECARE
Petitioner excepts in whole or in part to findings of fact 31, 51, 52, 56, 59, 68, and 70. The challenged findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
RULING ON EXCEPTIONS FILED BY THE DEPARTMENT
FINDINGS OF FACT
In paragraph 17 counsel requests that Hearing Officer's conclusion regarding the adjustments for the effect of inflation be corrected. The Hearing Officer stated:
This is done by multiplying both of these per diem costs by the rate of increase of the Florida Nursing Home Cost Inflation Index at the midpoint of the cost reporting period. Plan, page 41.
The finding is corrected to indicate that the determination is made at the midpoint of the cost reporting period to the midpoint of the rate period. Plan, page 41.
Counsel requests that paragraph 18 be corrected to state that the department, not the facility calculates the adjustment for a low occupancy factor. Paragraph 18 is hereby corrected.
Counsel excepts to paragraph 23 on the grounds of lack of relevance. The lack of relevance is not readily apparent; therefore, the paragraph will not be stricken.
Regarding paragraph 28, counsel points out that there were two costs reports for 1990, June 30, 1990, and December 31, 1990. Counsel does not assert that Wecare failed to meet the one percent threshold.
Counsel excepts to paragraphs 34 and 66 regarding costs due to an increase in the minimum wage. The minimum wage costs were implemented and included in the cost report period which was closed out in June 30, 1990. The plan does not grant an interim rate for the part of increased costs which were included in a prior, closed out cost report. The exception is granted.
Counsel excepts to the findings of fact in paragraphs 35, 37, 67, 68, and
69. Counsel maintains that the Hearing Officer's choice of the introductory words "Petitioner proved..." is a fatal flaw to findings of fact 53, 55, 57, 60, 61, 67, and 69. Such wording implies that the Hearing Officer exercised his function to weigh the evidence and then decided in favor of petitioner. The challenged findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
CONCLUSIONS OF LAW
Counsel excepts to the Hearing Officer's finding of jurisdiction and the finding that the conclusion of the federal Department of Health and Human Services (HHS) that OBRA `87 had no financial impact on Florida providers was
irrelevant. 1/ Counsel maintains that HHS conclusion is conclusive and thus petitioner is not entitled to litigate its contention in a state administrative hearing that it incurred additional costs in complying with the requirements of OBRA `87.
There is no authority for counsel's opinion that the HHS conclusion is conclusive and therefore prevents a provider from attempting to prove its reimbursement rate is inadequate in a Section 120.57 proceeding. 2/ There was competent evidence admitted at the hearing supporting the HHS conclusion, the testimony of Susan Acker (T2 73, 74), but the Hearing Officer found petitioner's evidence more credible. Section 120.57, Florida Statutes gives a provider who alleges he is substantially affected by a state agency's decision, the chance to prove his allegations, including Wecare's allegations that the requirements of OBRA `87 caused Wecare to incur additional costs. In effect counsel urges that the department establish a conclusive presumption barring litigation of such allegations in the Division of Administrative Hearings. The Courts have held that an agency has no authority to establish presumptions. B. R. vs.
Department of Health and Rehabilitative Services, 558 So2d 1027 (Fla. 2nd DCA 1989). I find that DOAH had jurisdiction to conduct this proceeding.
Moving on, counsel maintains that paragraphs 7 and 10 are mutually exclusive. I disagree. Counsel excepts to the finding in Paragraph 11 that the record keeping required by OBRA `87 is more comprehensive and time consuming than the old forms. The finding is supported by competent, substantial evidence; therefore, the exception is denied.
Counsel excepts to the Hearing Officer's findings in Paragraphs 17, 19, 20, and 25 that OBRA `87 imposed new requirements on a facility regarding patient welfare. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Finally, counsel maintains that the new requirements for handling hazardous wastes imposed no additional costs. The Hearing Officer's findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
FINDINGS OF FACT
The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where modified by the ruling on exceptions. Both parties stipulate that the Hearing Officer erred in finding in Paragraph 35 that the Plan established separate thresholds for patient care costs and operating costs that are not Patient care costs. Patient care and operating costs can be combined for purposes of the threshold.
CONCLUSIONS OF LAW
The department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where modified by the ruling on exceptions. The petitioner sought an interim rate increase of $2.53. The Hearing Officer recommends approval of only $.96. The conclusion in this Final Order that the increased minimum wage costs cannot be included in an interim rate adjustment and the stipulation discussed in the findings of fact will require the interim rate adjustment to be recalculated. Assuming the newly calculated interim rate is above the one percent threshold of $.55, petitioner is entitled to an interim rate adjustment.
Based on the foregoing, the department shall calculate an interim rate adjustment consistent with this Order and approve said adjustment if it exceeds the one percent threshold requirement.
DONE and ORDERED this 5th day of August, 1992, in Tallahassee, Florida.
Robert B. Williams, Secretary Department of Health and Rehabilitative
by Deputy Secretary for Human Services
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE_ RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
Robert E. Meale Hearing Officer
DOAH, The DeSoto Building 1230 Apalachee Parkway
Tallahassee, FL 32399-1550
Karen L. Goldsmith, Esquire GOLDSMITH & GROUT, P. A.
Post Office Box 2011
Winter Park, FL 32790-2011
Rarel Baarslag, Esquire Medicaid Counsel
1317 Winewood Boulevard
Building 6, Room 233
Tallahassee, FL 32399-0700
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above named people by U.S. Mail this 10 day of Aug., 1992.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, FL 32399-0700 (904)488-2381
ENDNOTES
1/ The state Medicaid plan must be approved by the federal government's Department of Health and Human Services (HHS). Wilder vs. Virginia Hospital Association, 110 Led 2d 455,
462 (U.S. 1990). The state is required to give "assurances" to HHS that reimbursement to providers is reasonable and adequate. Wilder 463. However the state is not required to provide HHS with the factual basis for its assurances; thus, the review has been described as limited and cursory. Wilder 475, Amisub, Inc. vs. State of Colorado, 879 F2d 789, 794 (10th Cir. 1989).
2/ The federal cases cited by counsel do not support his conclusion; to the contrary, it is clear that the state is obligated to provide an administrative forum for a provider to challenge a rate as being inadequate in its particular case. Wilder 475, Multicare Medical Center vs. State of
Washington, 768 F. Supp. 1349, 1401 (W. D. Wash 1991). The cited cases hold that a provider may challenge a state reimbursement plan in federal court under the civil rights statute, 42 U.S.C. Section 1983. The cases neither state
nor imply that jurisdiction is limited exclusively to the federal judiciary.
| Issue Date | Proceedings |
|---|---|
| Aug. 07, 1992 | Final Order filed. |
| May 06, 1992 | AGENCY APPEAL, ONCE THE RETENTION SCHEDULE of -KEEP ONE YEAR AFTER CLOSURE- IS MET, CASE FILE IS RETURNED TO AGENCY GENERAL COUNSEL. -ac |
| Mar. 20, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held November 6, and December 9-10, 1991. |
| Mar. 12, 1992 | (certified copy) Transcript (Vols 1&2) filed. |
| Feb. 05, 1992 | (Respondent) Notice of Withdrawal of Motion to Strike filed. |
| Feb. 03, 1992 | (Respondent) Motion to Strike Petitioner`s Recommended Proposed Order filed. |
| Jan. 30, 1992 | Amended Index to Appendix & Petitioner`s Exhibit List filed. (From Lisa J. Augspurger) |
| Jan. 29, 1992 | Appendix (Vols 1-4) filed. |
| Jan. 29, 1992 | Petitioner`s Proposed Recommended Order filed. |
| Jan. 27, 1992 | Respondent`s Proposed Recommended Order filed. |
| Jan. 21, 1992 | Ltr. to REM from K. Goldsmith requesting extension of time to filed proposed Recommended Order filed. |
| Jan. 13, 1992 | Transcript (Vols 1&2) filed. |
| Jan. 09, 1992 | Letter to REM from Sue Habershaw Johnson (re: transcript) filed. |
| Jan. 08, 1992 | Transcript filed. |
| Jan. 06, 1992 | Respondent`s Motion for Extension of Time to File Additional Portions of Videotape of Connie Cheren filed. |
| Dec. 02, 1991 | (Respondent) Motion to Dismiss for Mootness/Motion for Official Recognition filed. |
| Nov. 25, 1991 | (Respondent) Amendment to Witness and Exhibit List filed. |
| Oct. 28, 1991 | Amended Notice of Taking Deposition filed. (From Karel Baarslag) |
| Oct. 25, 1991 | (Petitioner) Supplement to Prehearing Stipulation Amendment to Witness List filed. |
| Oct. 24, 1991 | (Respondent) Notice of Taking Deposition filed. |
| Oct. 17, 1991 | Order Granting Continuance sent out. (hearing rescheduled for Nov. 6, 1991; 11:00am; Sanford). |
| Oct. 14, 1991 | (Petitioner) Motion for Continuance filed. |
| Oct. 10, 1991 | Prehearing Stipulation w/Exhibit A&B filed. |
| Oct. 04, 1991 | Order Granting Motion to Compel sent out. |
| Oct. 04, 1991 | Notice of Taking Deposition filed. (From Karel Baarslag) |
| Oct. 03, 1991 | Order Denying Motion for Continuance sent out. |
| Oct. 02, 1991 | (Respondent) Motion for Continuance filed. |
| Sep. 26, 1991 | (Respondent) Motion to Compel filed. |
| Sep. 20, 1991 | Prehearing Order sent out. |
| Sep. 18, 1991 | (Respondent) Motion for Pre-Hearing Order filed. (From Karel Baarslag) |
| Sep. 11, 1991 | Order Granting Continuance and Amended Notice sent out. (hearing set for October 16, 1991: 12:00 Noon: Orlando) |
| Sep. 09, 1991 | (Petitioner) Supplement Motion for Continuance filed. (From Karen L. Goldsmith) |
| Sep. 06, 1991 | (Petitioner) Motion for Continuance filed. (From Karen Goldsmith) |
| Aug. 13, 1991 | (Respondent) Notice of Substitution of Counsel filed. (From Karel Baarslag) |
| Aug. 12, 1991 | (DHRS) Notice of Serving Interrogatories filed. |
| May 07, 1991 | Notice of Hearing sent out. (hearing set for Sept. 18, 1991; 9:00am;Orlando). |
| Apr. 29, 1991 | (Respondent) Response to Initial Order filed. (From David G. Pius) |
| Apr. 24, 1991 | (Respondent) Notice of Appearance; Response to Initial Order filed. (From David G. Pius) |
| Apr. 23, 1991 | (Respondent) Notice of Appearance filed. (From David G. Pius) |
| Apr. 08, 1991 | (Petitioner) Response to Initial Order filed. (From Karen L. Goldsmith) |
| Mar. 29, 1991 | Initial Order issued. |
| Mar. 26, 1991 | Notice; Request for Formal Administrative Hearing w/exhibits A&B filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 05, 1992 | Agency Final Order | |
| Mar. 20, 1992 | Recommended Order | New Federal law governing nursing facilities entitles facility to interim rate increase because certain requirements not previously required under state law added. |
