STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
Respondent. ) 92-6247 93-0896 93-6993
) 92-6248 93-6994
RECOMMENDED ORDER
Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on May 16, 17, and 18, 1994 in Tallahassee, Florida. The following appearances were entered:
APPEARANCES
For Petitioners: Gerald B. Sternstein, Esquire
Frank P. Rainer, Esquire
RUDEN, BARNETT, McCLOSKY, SMITH, SCHUSTER, & RUSSELL, P.A.
215 South Monroe Street, Suite 815 Tallahassee, Florida 32301
For Respondent: Harold M. Knowles, Esquire
KNOWLES & RANDOLPH
528 East Park Avenue Tallahassee, Florida 32347
STATEMENT OF THE ISSUE
Whether Florida Convalescent Centers, Inc., (FCC) and National Health Corporation, LP (NHC) are "related parties" by either ownership or control for the purposes of Medicaid reimbursement.
PRELIMINARY STATEMENT
This cause came on for hearing upon a petition filed by Florida Convalescent Centers, Inc. (FCC), with the Agency for Health Care Administration (AHCA). AHCA referred this matter to the Division of Administrative Hearings (DOAH) for formal hearing, pursuant to Section 120.57(1), Florida Statutes. The petition challenged certain audit adjustments made to cost reports submitted to the Agency for the years 1989, 1990, and 1991, by FCC for 12 of its facilities. In October, 1992, the Department of Health and Rehabilitative Services referred twelve (12) separate petitions relating to 1989 audits to DOAH for hearing. (DOAH Case No. 92-6238 through 92-6248) were initially consolidated and set for
hearing by order, dated November 13, 1992 and December 1, 1992, respectively. Prior to hearing, these cases were abated and transferred to the undersigned Hearing Officer. In February, 1993, eleven (11) separate petitions (DOAH Cases Nos. 93-0886 through 93-0896) relating to 1990 audits of FCC facilities were referred to DOAH for hearing. They, too, were consolidated and set for hearing. In December, 1993, the third batch of twelve (12) cases (DOAH Case Nos. 93-6983 through 93-6994) relating to 1991 audits were referred to DOAH for hearing. They were reassigned to the undersigned and consolidated. The Joint Motion for Bifurcation, filed on May 12, 1994, was granted by order of the Hearing Officer. The parties agreed to bifurcate the proceedings, limiting the initial proceedings to only the issue of whether FCC and NHC are "related parties" for the purposes of Medicaid reimbursement. A Motion to Compel was filed by FCC for failure of Respondent to respond to certain discovery requests. An order to respond to the discovery request was directed to Respondent. Ruling was reserved on Petitioners' renewed motion for sanctions. After thorough review of each party's submittal on the subject, it is determined that no prejudice has occurred and Petitioners' motion for sanctions is DENIED. Respondent's motion for attorney's fees is also DENIED.
At the formal hearing Petitioners presented oral testimony of the following witnesses, each of whom was qualified as an expert witness: James McCarver (re: nursing home development and ownership); John Robenalt (re: nursing home health care finance and development); Robert Van Tuyle (re: nursing home finance, development and management issues); Leonard C. Homer (re: analysis of Medicaid rules and regulations); Richard F. LaRoche, Jr. (re: nursing home development, acquisition and financing); and Martha Huey (re: Medicaid and Medicare reimbursement). Respondent presented the expert witness testimony of Frank Hughes (re: Medicaid reimbursement and related party issues). Petitioners' Exhibits 1-10 and Respondent's Exhibits 1-12 were admitted into evidence. Eight
evidentiary exhibits representing federal and state statutes, rules and publications were officially recognized and/or introduced into evidence.
In connection with the evidence adduced at hearing, after both parties had rested, Petitioners attempted to introduce, as rebuttal testimony, a portion of the pretrial deposition of Leonard C. Homer taken by the Agency. Petitioners had voluntarily excused this witness after he had testified at the hearing and attempted to introduce certain parts of his pretrial testimony as rebuttal to the Agency's case in chief, on the premise that he was now "unavailable." The Agency's counsel objected on grounds that the witness had already testified and there was no basis for the introduction of testimony in this manner. Such testimony would, in any event, be hearsay testimony and does not fall within any specified exception under the Florida Evidence Code (Section 90.804(2), F.S.).
Nor would it be admissible under the applicable rules of civil procedure (Rule 1.330(a)(3)(B)), since it appears that the absence of the witness from the jurisdiction was "procured" by the Petitioners. Accordingly, Petitioners' request to present rebuttal testimony in this manner was properly denied.
At the conclusion of all testimony, the Agency attempted to offer into evidence a loan agreement between John Robenalt and NHC to illustrate an arrangement analogous to the case sub judice. Admission of the agreement into evidence was denied and it was proffered by the Agency but has not been considered in this Order.
The transcript for these proceedings was filed with DOAH on June 2, 1994. Following the granting of motions for extension of time, the parties each filed proposed recommended orders on July 22, 1994. These proposals have been carefully considered and adopted where they have been supported by the greater
weight of evidence. My specific rulings on the parties' proposals are set forth in the Appendix attached hereto.
Based upon all of the evidence, the following findings of fact are determined:
FINDINGS OF FACT
Respondent Agency for Health Care Administration (AHCA) is the successor agency to the Department of Health and Rehabilitative Services and the agency responsible for administration and implementation of the Medicaid Program. The Florida Title XIX Long-Term Care Reimbursement Plan ("the Plan"), which was adopted and incorporated by reference in Rule 10C-7.0482, Florida Administrative Code, (now Rule 59G-0.010, F.A.C.), is the overall guide for Medicaid reimbursement in the State of Florida. According to the Plan, nursing homes participating in the Medicaid Program are required to submit cost reports to determine reimbursement and ensure that the costs which are reported are allowable under Medicaid.
Florida Convalescent Centers, Inc. (FCC), is a Florida corporation which owns 16 nursing homes located throughout the State of Florida. The audits of the cost reports for 1989, 1990 and 1991 for twelve of the facilities are involved in this proceeding.
The sole shareholders of FCC are James McCarver and his wife, Pat McCarver.
The president of FCC is James McCarver (McCarver). FCC's secretary/treasurer and Senior Vice President is Pat McCarver. Its Vice President and assistant secretary is John Robenalt. FCC's chief financial officer is Charles Wysocki. The directors of the corporation are James and Pat McCarver and John Robenalt.
National Health Corp., L.P. (NHC) is a long-term health care company that operates health care centers. NHC was founded in 1971 and became a publicly held corporation in 1983. In 1986, it was converted to a limited partnership and is traded on the American Stock Exchange.
None of the corporate officers or directors of FCC have ever been corporate officers, directors, agents or employees of NHC, and none of the corporate officers of NHC have ever been corporate officers, directors, agents or employees of FCC.
NHC cannot elect to remove any officers, directors or personnel of FCC.
All of the employees at each nursing home are employed by FCC and salaries are paid by FCC from FCC payroll accounts, except for the nursing home administrator.
McCarver, either individually or with his wife, has always owned 100 percent of the stock in FCC, and the McCarvers have never owned any stock in NHC.
As president/owner of FCC, McCarver runs the company and specifically performs the following functions, among others: review and approval of operating budgets, review and approval of all capital budgets, approval of all expenditures exceeding $5,000, long range planning for the corporation, deciding
when and where to file for certificates of need, and determining the corporate philosophy and mission.
As a corporation with a sole, owner/manager shareholder, the McCarvers have focused the corporate philosophy toward providing a higher level of patient care than is found in the average nursing home. Such dedication to patient care is reflected in the superior licensure rating which all sixteen of the FCC nursing homes have achieved and maintained and room sizes in the facilities which exceed industry standards.
The home office for FCC is located in Sarasota, Florida.
Charles Wysocki, the chief financial officer of FCC, operates out of an office located in the NHC offices in Murfreesboro, Tennessee; FCC does not pay rent for use of the office space provided by NHC.
FCC was chartered in 1983. The initial and sole owner of FCC was James McCarver. McCarver is educated as an attorney and certified public accountant. He provided the initial capitalization for FCC. He had extensive experience in the formation, building, development and ownership of nursing homes prior to the formation of FCC. Subsequent to its organization, James McCarver transferred a portion of his shares in FCC to his wife, Pat McCarver.
The corporation was chartered by McCarver for the purpose of securing certificates of need in the State of Florida, and for the building, developing and owning those nursing homes in the State of Florida.
McCarver's prior experience with nursing homes was as a part owner of over 20 nursing homes in the States of Texas and Missouri.
Dissatisfied with the limitations which ownership with partners entailed, McCarver began to explore other states in which he could develop nursing homes so that he would be the sole owner. After reviewing the available demographic information and conducting extensive market analyses, McCarver determined that the nursing home market was underserved in Florida and identified several geographic locations in the State of Florida for which nursing homes would be feasible.
The demographic and market analysis was conducted by a staff assembled and directly employed by McCarver. He also assembled and directly employed the architectural, construction management and development staff to prepare certificate of need applications for the State of Florida. With the assistance of his staff he filed 66 applications for certificates of need in the State of Florida, which were all initially denied. However, after considerable certificate of need litigation, McCarver was awarded 20 certificates of need (CONs) in 1985.
Having been successful in obtaining 20 CONs at one time, McCarver was faced with the large task of building, financing, staffing and operating twenty brand new nursing homes. CONs expire one year from the date when issued, unless construction of the facility is commenced. Thus, McCarver had the immediate task of assembling significant financial, construction, and managerial resources to develop 20 CONs in time to avoid losing them.
While McCarver had significant independent financial resources and employed managerial personnel, he did not possess sufficient resources to accomplish the task of building all 20 nursing homes in a one year time period.
McCarver sought to find assistance with respect to the financial and managerial resources he needed. As to the actual development/construction and opening of the facilities, McCarver was faced with the prospect of either expanding his current staff and then laying off the new hires afterwards, or finding a national development company which had sufficient development volume of its own to justify retaining a staff of the magnitude required and from whom he could purchase the services for this burst of development activity.
McCarver decided to seek the services of a large nursing home company to purchase the necessary services. He and/or his corporate counsel, John Robenalt, contacted and visited several companies, including: Arbor, Beverly, HCR, Hillhaven, Manor Care, Waverly Group, U.S. Care Corporation, Mediplex, NHC, Life Care Corporation, Care Age and Forum.
The purpose of contacting so many companies was to obtain the most competitive pricing and terms for the services to be purchased. While he was not necessarily seeking a package of services from any one company, McCarver recognized that financing and management services usually were sold together.
All of the companies contacted insisted on an ownership component as part of their offer to do business with McCarver. McCarver rejected these offers because he wanted to maintain complete ownership of the nursing homes.
During the search for assistance, McCarver came into contact with NHC in June 1985 through the efforts of John Robenalt. Prior to June 1985, the parties were unknown to each other and did not have any business relations.
Intensive negotiations and discussions were held between McCarver and Robenalt on behalf of FCC, and Ted LaRoche on behalf of NHC.
The specific concerns of FCC in the negotiations with NHC were as follows: (1) desire to retain ownership of the facilities and certificates of need; (2) desire to assure itself that NHC would not mismanage the facilities, cause a default and then obtain ownership by foreclosure; (3) quality of care and quality of construction of the facilities; (4) control of capital expenditures; and (5) insistence that all employees of the facilities be employees of FCC and not NHC.
NHC's concern during the negotiations was to avoid mistakes that it had made as a guarantor on previous transactions with other third parties. NHC wished 1) to provide default and foreclosure remedies, should NHC be required to make payments on its guaranty; 2) to prevent owners from stripping the cash flow and value from the facility by syndication; 3) to ensure that the contractor was bonded; and 4) to make sure the site had the proper zoning.
During the time of the negotiations, the parties recognized the related party limitations, as contained in the Medicare and Medicaid regulations, and considered such in structuring their arrangement. The intent of the parties was to insure that FCC retained ownership and control of all monetary and policy-making decisions.
The negotiations were at arm's length and competitively priced.
As a result of the negotiations, FCC and NHC entered into a master Agreement, dated June 14, 1985, (hereinafter the "Development Agreement"), in which FCC purchased from NHC the following services: development services for 13
nursing homes, including three in California, credit enhancement and guaranty backing for financing the facilities, working capital financing and management services.
Subsequent to the initial development and pursuant to the Development Agreement, FCC added and dropped facilities from the Agreement and negotiated amendments. The 16 facilities now owned by FCC were developed pursuant to the terms of the Development Agreement, with some modifications for each individual facility.
The development services purchased by FCC from NHC were to assist McCarver's existing staff of two architects, construction supervisor and interior designer in co-developing ten of the facilities for which certificates of need had been awarded. In addition, NHC obtained and provided recommendations of qualified, bonded contractors for FCC to choose from to construct the various facilities. FCC had final say as to which contractor and sites were acceptable; NHC's role was to prevent FCC from making a mistake during the contracting and site selection phase. FCC also negotiated a provision to obtain reimbursement of part of its up-front investment in architectural, interior design and some certificate of need procurement expenses as part of the construction contracts. The sum reimbursed was $400,000 per facility. However, in subsequent projects, these expenditures were not reimbursed to FCC.
The financing services purchased from NHC were credit enhancement and guaranty assistance, and are set forth fully in an Agreement to Guarantee attached as Exhibit "B" to the Development Agreement. Credit enhancement is essentially purchasing the financial strength of a well capitalized company by getting that company to guaranty debts. The primary benefit of purchasing credit enhancement is that a start-up company such as FCC on its own would have to pay a substantially higher interest rate to a lender, but could obtain a much lower rate with a credit enhancement.
FCC used the financing assistance of NHC to obtain tax-exempt industrial revenue bond financing or loans from private banks to construct the nursing home facilities. While NHC contributed its knowledge and expertise in locating acceptable lenders, much of the financing was located by FCC's officers, and all of the financing is a direct debt of FCC.
As a result of NHC's credit enhancements, FCC was able to obtain interest rates of eight percent when the interest rate at that time, without the NHC credit support, would have been 13 1/2 percent.
In return for providing such credit enhancements, NHC receives annually a guarantee fee of one percent of the outstanding indebtedness which is guaranteed by NHC.
Also, NHC for assuming the initial risk involved in the start-up and development of the nursing home facilities, receives the following deferred, contingent guaranty fees:
For facilities financed by non-tax-exempt financing, a right to 25 percent of the net proceeds in the event the facility is sold.
No right exists to force the sale of any facility; and, as long as FCC does not sell the facility, no right to such contingent fee accrues; furthermore, no fee accrues upon the transfer of stock which occurs because of
testamentary disposition to family members of McCarver. This contingent guaranty fee is speculative since it assumes, first, the facility will be sold and, second, that it will sell for more than the debt.
For facilities financed with tax-exempt financing, based on bond counsel advice, NHC is to receive a fee accruing at 3 percent a year on the outstanding principal balance guaranteed by NHC, the payment of which fee is deferred until the year 1997.
Payment of contingent guarantee/credit enhancement fees is common and accepted in the nursing home industry as additional compensation for the risk taken by the guarantor in connection with a new venture.
FCC is not obligated to purchase credit enhancement assistance from NHC. Nothing contained in the Development Agreement prohibits or prevents FCC from obtaining financing without the NHC credit enhancements, and if such credit enhancements are not used, then the applicable annual fees do not have to be paid. FCC has actively sought to refinance its projects when interest rates were declining.
The contingent guarantee fees are not an equity or ownership interest in FCC nor a control interest in FCC.
To secure its loan guarantees NHC required that FCC grant subordinated mortgages on its facilities.
In the event FCC defaults on debt payments guaranteed by NHC, and NHC is required to make the payments, FCC has a 120-day grace period, after notice, to repay NHC before NHC can declare FCC in default and exercise its foreclosure remedies.
NHC also provided working capital loans to finance the start-up operation of the facilities; however such loans are capped at a maximum dollar amount.
FCC is not limited to obtaining the working capital loans only from NHC and can seek other lenders. FCC has actively canvassed the market for cheaper working capital financing, if available.
After the working capital loan from NHC is exhausted, FCC is required to provide all additional working capital needs for the individual nursing homes.
The working capital loans with NHC had an original maturity of five years. Each were renewed for an additional five years. None of the working capital loans are demand loans.
The working capital interest rate is 2-1/2 percent over the prime rate. An interest rate for working capital loans at two and one half percent over the prime rate is a competitive rate.
The working capital interest rate does not exceed the price of comparable services that could be purchased elsewhere, and is in line with the charge for such services in the open market.
The management services purchased from NHC are described in a Management Agreement, attached as Exhibit "C" to the Development Agreement, and include the following, among others:
NHC recruits and recommends the administrator for each facility. Final selection of the administrator is made by McCarver.
NHC conducts all collections for services provided at the facilities and manages the various banking accounts for the facilities. The bank accounts for each facility are FCC accounts owned by FCC. Checks on such accounts are written by the bookkeeper at each facility, who is an FCC employee, and are signed by the facility's administrator. While such accounts are the source for payment of NHC's management and guarantee fees, pursuant to the Management Agreement, NHC must first submit an invoice to the facility to initiate payment. NHC is prohibited from commingling such funds and handles such funds as a fiduciary.
The management fee is six percent of gross revenue. A 6 percent fee is a competitive rate, and does not exceed the price of comparable services that could be purchased elsewhere.
It is in line with the charge for such service in the open market.
In addition, as further consideration for the services provided by the Development Agreement, NHC requires the following:
The personal guaranty of McCarver
A right of first refusal upon the sale of any facility to a third
party.
Covenants, contained in paragraph 5(a), (b) and (c), page 3 of the
Agreement to Guarantee, that failure to pay the guaranty fee would result in a default and that such default would entitle NHC to commence foreclosure of subordinated mortgages recorded to secure its guaranty position.
Covenant, contained in paragraph 6(a), page 3 of the Agreement to Guarantee, prohibiting the owner from incurring additional debt on the facility or conducting an equity offering, without retaining the monies raised for use in the facility. This provision is included to prevent the owner from stripping all the cash from the facility.
Covenant contained in paragraph 14(b), page 12 of the Management Agreement, which would require any purchaser of the facility to assume the Management Agreement in the event of a sale while the debt guaranteed by NHC is still outstanding.
Covenant contained in paragraph 4(c), page 8 of the Management Agreement, requiring the owner to maintain a reasonable operating reserve, which at a minimum will be three months operating costs.
Extensive monitoring and evaluation of NHC's performance under the Management Agreement is performed by FCC's employees; McCarver on an ongoing basis monitors the patient care performance of NHC at the facilities by site visits and patient and family interviews. Wysocki extensively monitors NHC's financial performance, management of FCC's banking accounts, verifying the accuracy of any charges invoiced by NHC for guarantee, management and any other
fees, and all other financial matters. Wysocki is located at NHC's offices in order to have ready access to financial data and to be FCC's watchdog over NHC's contract performance.
FCC has delegated only the day-to-day operations of the facilities to NHC under the management agreement.
FCC retains the power to direct the actions or policies of the facilities and corporation through the following provisions in the Management Agreement, among others: (1) review and approval of the selection of the administrator; (2) review and approval of all operating and capital expenditure requests above $5,000; (3) review and approval of all annual operating and capital expenditures budgets; (4) decision making on pursuit of certificate of need and other facility expansion decisions; and (5) setting of corporate philosophy and corporate mission.
FCC does not lease any facilities from NHC, nor is FCC subject to any non-competition clause with NHC.
The contractual agreements with FCC are not a substantial part of the business activity of NHC. The FCC beds managed by NHC totaled 1,578 beds in 15 facilities. In 1991, NHC owned or managed a total of 10,204 nursing home beds in 82 facilities; owned 17 home care programs and three retirement apartment complexes with 235 units, and NHC managed a total of 38 facilities for third parties. NHC's gross revenues were $184,612,000 and its gross revenues from FCC were approximately $4,000,000 plus the guarantee fee of 1 percent on the outstanding principal balance which equals at least $500,000 annually.
NHI, a real estate investment trust (REIT) which is affiliated with NHC, in 1991 purchased by assignment the taxable financing on five of the FCC facilities representing about $14,000,000 of debt. NHI has outstanding 183 different loans and over $500,000,000 of assets. Therefore, the outstanding indebtedness of FCC represents approximately 2.5 percent of NHI's assets and loans.
Within the nursing home industry there have developed expertise and economies of scale for construction and development services. It is possible for owners to purchase development services to take advantage of such expertise and economies of scale.
It is not uncommon for the nursing home owner, to the extent he has incurred fees for architectural services and other up-front development costs, to receive reimbursement of such development fees from the project's financing.
There are significant numbers of suppliers of management services in the nursing home industry and pricing is competitive and open among the suppliers.
It is a common practice in the nursing home industry for owners to engage management companies to provide day-to-day operating services.
Management companies are utilized by owners to access special expertise and economies of scale in management skills and talent, medical staff recruitment and retention, purchasing, quality control, regulatory compliance and reimbursement practices.
It is a common contractual term in the industry for management companies to provide the administrator for the facility.
It is a common contractual term in the industry for management companies, as part of their services to manage the operating accounts of the facilities.
It is a common contractual term in the industry for companies that perform the management of a facility to require a right of first refusal upon the sale of the facility to third parties.
It is a common contractual term in the industry for management agreements to require that the owner maintain operating account reserves.
The Management Agreement entered into between FCC and NHC is not out of line with the standard in the industry.
A typical ancillary service provided as part of the management services is working capital loans.
The terms of the working capital loans between FCC and NHC are common provisions required by lenders of working capital funds.
The purchase of credit enhancement services is a standard and common practice in the industry.
When credit enhancement services are purchased, it is standard business practice for the lender to require the corporate shareholder to guaranty the financing.
When credit enhancement services are obtained, it is normal business practice for the lender to secure the funds or credit advanced by default provisions, lien rights and foreclosure remedies, and standard grace periods for default are 5 days.
When credit enhancement services are obtained, it is a normal contractual term to limit the ability of the purchaser to conduct additional financing by syndication or otherwise, which could result in the owner "cashing out" from the property, leaving the guarantor with a financially bankrupt asset.
The Agreement to Guarantee between FCC and NHC is typical and contains terms and provisions common to comparable business transactions, as required by the open market for such services.
The sale of financing and management services as a package is a standard industry offering.
The documentation and terms for management and credit enhancement services have become standardized in the nursing home industry.
The terms and pricing of the Development Agreement, Agreement to Guarantee, and Management Agreement are not excessive within the industry and do not exceed the price or terms of comparable services that could be purchased elsewhere. They are in line with the terms and charges for such services in the open market, and are not in excess of what is available to other organizations under circumstances comparable to FCC's.
NHC is charging FCC the same or less for the services it is providing, pursuant to the Development Agreement and Agreement to Guarantee, as is provided to other comparable organizations it supplies such services.
The services being obtained pursuant to the Development Agreement, Agreement to Guarantee and Management Agreement are not a basic element of patient care ordinarily furnished directly to patients by such institutions; delivery of patient care services is made only by FCC employees.
All default provisions in the Development Agreement, Agreement to Guarantee, and Management Agreement are triggered by objective criteria by which default is to be determined. These provisions do not give NHC the ability to use the threat of default to coerce FCC into paying greater compensation or otherwise control the business decisions of FCC, or influence or direct the actions or policies of FCC, as would be the case if the loans and guarantees were in the form of demand notes.
The Development Agreement and its Exhibits are within the standard in the nursing home industry.
The Development Agreement and its Exhibits do not give NHC an ownership interest in FCC.
The Development Agreement and its Exhibits do not give NHC control over FCC.
Medicaid is a federal social welfare program, created as "Title XIX of the Social Security Act." It is administered by the states, and the method of reimbursement is generally set forth by each state. However, the states to a large extent utilize the regulations promulgated for the Medicare program for determining provider reimbursement issues.
Florida has elected to participate in the Medicaid Program and has passed appropriate authorization statutes and regulations to promulgate the state plan required by the federal statutes. One component of the state plan established and implements a Florida Title XIX Long-Term Care Reimbursement Plan. The Plan for nursing houses has been adopted as Rule 59G-6.010, Florida Administrative Code.
In the Plan, Florida does not have a separate "related party" rule for its Medicaid program, but relies upon the Medicare rule contained in 42 C.F.R. Section 413.17 and Chapter 10 of the Provider Reimbursement Manual (HIM-15).
The applicable Medicare reviewing entities, applying the Medicare related party rules, have not found a related party relationship between FCC and NHC. FCC has submitted annually cost reports to the fiscal intermediary for the federal Medicare program. The fiscal intermediary questioned the nature of the relationship between FCC and NHC as to whether related parties exist. The fiscal intermediary requested all of the underlying documentation and explored the nature of the relationship between the parties, and repeatedly has found that a related party relationship does not exist.
AHCA seeks to use generally accepted accounting principles (GAAP) to support its decision that FCC and NHC are related parties.
The regulatory objective of 42 C.F.R. Section 413.17 is to assure that the government program pays no more than a provider's reasonable costs for
services rendered. It achieves that by collapsing or combining the business operations of related parties to prevent such related parties from collaborating to increase the costs to the Medicare and Medicaid programs by internal transactions in which a related party's charges become the provider's costs for such services, facilities or supplies.
HIM-15 recognizes and permits providers to purchase a bundle of services, including but not limited to, working capital loans and management services, without creating a related party transaction.
HIM-15 permits providers, in lieu of employing in-house staff, to purchase management services, and authorizes reimbursement for a:
full service management contract in
which the management contractor provides a complete package of services, has overall day-to-day management responsibility for the
operation of the provider, and is accountable only to the governing board (or delegated representative) of the provider.
In order for the bundle of services between FCC and NHC to be considered as a control relationship, HIM-15 requires each of the following: (1) the management agreement would replace several of the key employees of FCC, (2) the working capital loans would be evidenced by demand notes, and (3) NHC would own and lease the nursing home facilities to FCC, with NHC having the sole right to cancel the lease.
In this case, although NHC does provide, subject to FCC's approval, the nursing facility administrator, the working capital loans provided by NHC are not demand notes that afford control by economic coercion but, rather, are term loans having default provisions based on objective criteria with a 120-day period for cure. Similarly, the facilities are not owned by NHC and leased to FCC with a sole right of termination in NHC. Here, the converse is true, FCC owns the facilities and has the right to terminate NHC's management contracts.
42 C.F.R. Sections 455.100 and 455.101 are regulatory requirements relating to disclosure by providers and do not provide standards as to whether a related party relationship exists for reimbursement purposes.
The "evil" which the related party regulations are designed to prevent is not occurring in the business relationship between FCC and NHC.
FCC and NHC are not related parties pursuant to the applicable Medicaid statutes and rules.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding, and the parties thereto, pursuant to subsection 120.57(1), Florida Statutes.
The Agency for Health Care Administration is the state agency authorized to administer the Florida Medicaid Program.
AHCA, as the party seeking to establish a Medicaid overpayment based on a related party determination, has the burden of proving the allegation by a
preponderance of the evidence. Southpointe Pharmacy v. DHRS, 596 So.2d 106 (Fla. 1st DCA 1992); Florida Department of Transportation v. J.W.C. Co., 396 So.2d 778 (Fla. 1st DCA 1981).
The party asserting the affirmative of an issue generally has the burden of proof. Balino v. DHRS, 348 So.2d 349 (Fla. 1st DCA 1977). In this case, AHCA is asserting that FCC is related by common ownership or control to NHC. As AHCA is the party asserting the affirmative of the issue, it is in the best position to disclose what facts are pertinent to its determination.
Furthermore, the party seeking to change the status quo is generally required to carry the burden of proof. Id.; Amico v. Division of Retirement, Dept. of Administration, 352 So.2d 556 (Fla. 1st DCA 1977). In the cause at issue, FCC was previously determined by AHCA to be unrelated to NHC. Therefore, the determination at a later date that FCC and NHC are related parties would constitute a change in the status quo. As the party asserting the accuracy of this change, the Agency has the burden of proof on this issue.
To the extent that Greynolds Park Manor v. DHRS, 454 So.2d 29 (Fla. 1st DCA 1984), has not been overruled by Southpointe Pharmacy, supra, and assuming that FCC has the burden of proof on the question at issue, the greater weight of evidence still supports the findings of fact and conclusions in this order.
The federal Medicaid program provides for the ability of states to seek federal appropriations for financing indigent health care within a state.
42 U.S.C. Section 1396 et seq. The program provides that the states are required to implement a plan which complies with the requirements of federal statutes and rules. 42 U.S.C. Section 1396(a).
One of the components of the state plan is as follows:
(13) provide -
(a) For payment . . . of the . . . nursing facility services . . . provided under the plan through the use of rates . . . which the state finds, and makes assurances satisfactory to the Secretary, are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable State and Federal laws, regulations, and quality
and safety standards, and to assure that individuals eligible for medical assistance have reasonable access . . . ." 42 U.S.C. Section 1396(a)(13)(a)
Pursuant to Section 409.908, Florida Statutes, Florida has implemented the above federal requirement by authorizing AHCA to "reimburse Medicaid providers, in accordance with state and federal law, according to methodologies set forth in the rules of the department and in policy manuals and handbooks incorporated by reference therein."
Section 409.908 (2)(b), Florida Statutes, also authorizes AHCA to: establish and implement a Florida Title XIX
Long Term Care Reimbursement Plan (Medicaid) for nursing home care which utilizes a
rate-setting mechanism whereby the rates are reasonable and adequate to cover a nursing home's cost which must be incurred by an efficiently and economically operated facility in order to provide care and services in compliance with the applicable state and federal laws, rules, regulations, and quality and safety standards and to ensure that individuals eligible for medical assistance have reasonable geographic access to care. . .
Pursuant to this authority, AHCA promulgated Florida Title XIX Long Term Care Reimbursement Plant ("the Plan"). Rule 59G-6.010, Florida Administrative Code adopts the Plan and requires AHCA to reimburse participating nursing homes in accordance with the Florida Title XIX Long-Term Care Reimbursement Plan.
One aspect of making provider reimbursement decisions is to determine whether any costs incurred by the nursing home are the result of related party transactions. Reference to the Plan, which is a duly promulgated rule of AHCA, directly points to the applicable regulations for determining related party situations. Section III, F of the Florida Title XIX Long-Term Care Reimbursement Plan requires that:
Costs applicable to services, facilities, and supplies furnished to a provider by organizations related to a provider by
common ownership or control shall be governed by 42 C.F.R. 405.427, now 42 C.F.R. 413.17),
Medicare (Title XVIII) Principles of Reimbursement, and Chapter 10, HIM-15.
An agency's interpretation of its own rules is entitled to great weight. Maclean Rehabilitation Center v. DHRS, 588 So.2d 12, 13 (Fla. 1st DCA 1991); Pershing Industries v. Department of Banking and Finance, 591 So.2d 991 (Fla. 1st DCA 1991). If an agency's interpretation of its governing rules is one of several permissible interpretations, it must be upheld unless clearly erroneous. Id. at 9933; DHRS v. Framat Realty, Inc., 407 So.2d 238, 242 (Fla. 1st DCA 1981). Moreover, the agency's interpretation must be upheld so long as it is consistent with legislative intent and supported by competent substantial evidence. PERC v. Dade County Police Benevolent Association, 467 So.2d 58 (Fla. 1st DCA 1986); Florida School for the Deaf and Blind v. Teachers United, FTP- NEA, 483 So.2d 58 (Fla. 1st DCA 1985). However, in its interpretation of the "related parties rule," AHCA's interpretation is clearly erroneous.
The Plan section and 42 C.F.R. 413.17, do not incorporate by reference, or in any manner identify or allude to, any other section of the Code of Federal Regulations. These sections, Section III, F of the Plan and Section 413.17, are the only sections which specify the determination whether two entities are "related parties" for reimbursement purposes. Furthermore, the Plan specifically deals with cost reporting requirements for related organizations in Section I, titled "Cost Finding and Cost Reporting," Subsection H, and states as follows:
Records of related organizations as defined by 42 C.F.R. [413.17] shall be available upon demand to representatives, employees, or contractors of HRS, the auditor general accounting office (GAO), or Department of Health and Human Services (HHS).
Chapter 10, HIM-15, the Provider Reimbursement Manual, is the official interpretation of 42 C.F.R. 413.17. This chapter of HIM-15 provides general statements regarding the interpretation and application of the principles established by 42 C.F.R. 413.17. Chapter 10 also provides examples of the type of ownership or control interest which is required before two entities are deemed to be "related parties." Chapter 10 does not incorporate by reference, or in any manner identify or allude to, any other section of the Code of Federal Regulation, other than 42 C.F.R. 413.17.
42 C.F.R. 413.17 reads in pertinent part:
Common Ownership. Common Ownership exists if any individual or individuals possess significant ownership or equity in the provider and the institution or organization serving the provider.
Control. Control exists if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the action or policies of an organization or institution.
c. Application. (1) Individuals and organizations associate with others for various reasons and by various means. Some deem it appropriate to do so to assure a steady flow of supplies or services, to reduce competition, to gain a tax advantage, to extend influence, and for other reasons.
These goals may be accomplished by means of ownership or control, by financial assistance, by management assistance, and other ways . . .
Chapter 10 of the Provider Reimbursement Manual provides in this connection:
...1002 Definitions
1002.1 Related to the provider means that the provider to a significant extent is associated or affiliated with, or has control of, or is controlled by, the organization furnishing the services, facilities, or supplies.
1002.2 Common ownership exists when an individual or individuals possess significant ownership or equity in the provider and the institution or organization serving the provider.
1002.3 Control exists where an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution . . .
1004.1 Common Ownership Rule
A determination as whether an individual (or individuals) or organization possesses significant ownership or equity in the provider organization and the supplying organization, so as to consider the organizations related by common ownership, will be made on the basis of the facts and circumstances in each case. This rule applies whether the provider organization or supplying organization is a sole proprietorship, partnership, corporation, trust or estate, or any other form of business organization, proprietary or nonprofit. In the case of a nonprofit organization, ownership or equity interest will be determined by reference to the interest in the assets of the organization (e.g. a revisionary interest provided for in the articles of incorporation of a nonprofit corporation).
1004.3 Control Rule
The term "control" includes any kind of control, whether or not it is legally enforceable and however it is exercisable or exercised. It is the reality of the control which is decisive, not its form or the mode of its exercise.
42 C.F.R. 413.17 implements section 1861(V) of Title XVIII of the Social Security Act (Medicare) and seeks to define, in part, reasonable cost for purposes of reimbursement under Medicare and, by incorporation, under the Florida Medicaid Plan. The corresponding Manual provisions contained in Chapter
10 of HIM-15 contain definitions of both control and common ownership. It is these definitions which apply to the question of related party for cost reimbursement in the case at bar. Nicholson v. State, 600 So.2d 1101 (Fla. 1992) (holding that a definition contained within a statute controls over all others). Not one case involving related parties before the courts regarding reimbursement under Medicare, or under Medicaid, utilizes the disclosure provisions contained in 42 C.F.R.. Section 455.100, et seq., to define or otherwise make the related party determination.
In making the related party determination in this case, the substantial competent evidence is persuasive that AHCA improperly relied on definitions contained in 42 C.F.R. Section 455.100 et seq. Those sections focus on program integrity and disclosure, not reimbursement. These sections implement the disclosure requirements of the 1977 Medicare-Medicaid Anti-Fraud and Abuse Amendments to the Social Security Act. 42 C.F.R. Part 455 is titled
"Program Integrity: Medicaid," Subpart A is titled "Medicaid Agency Fraud Detection and Investigation Program." The definitions contained therein set forth the interests a provider is required to disclose in order to become or remain a participant in either the Medicare or Medicaid programs. See 42 C.F.R.
455.100. They were not designed as, and bear no relationship to, the method set forth in regulation and agency manuals for determining whether two entities are related for reimbursement purposes. A review of 42 C.F.R. Section 455.100, which is titled "Purpose," clearly reveals that this regulatory section only concerns itself with what disclosure requirements are required by the state plan, and the section does not comprise the applicable federal regulations or state plan requirements for reimbursement to providers.
In reaching the determination that FCC and NHC are related parties for reimbursement purposes, Frank Hughes, the agency expert, testified that he applied the standards outlined in 42 C.F.R. 455.100, et. al., essentially because the latter provided a 5 percent bright line standard rather than the definitions and provisions contained in Chapter 10 of HIM-15 which "doesn't define the terms, except by example." In fact, Chapter 10 uses examples to define ownership and control. Those Chapter 10 examples speak to interest or control percentages of 40 percent or more, while making clear that, even with such percentages, the entire body of facts and circumstances must be taken into account before finding the parties to be related. HIM-15, Chapter 10, section 1004.3. Thus, Mr. Hughes reached an inaccurate determination, unsupported by the authority of the statute, regulation or informal rule. See also, United Guaranty Residential Insurance Co. of Iowa v. Alliance Mortgage Co., 644 F. Supp. 339 (M.D. Fla. 1986) (A party asserting an ambiguity in a statute bears the burden of establishing that ambiguity exists.)
In determining whether two entities are related for reimbursement purposes, Sections 1004.1 and 1004.3 of HIM-15 require that "the facts and circumstances in each case" be considered to determine if two entities are related by control or ownership. As required by the applicable regulations, the decision in this case must be controlled by a consideration of the facts and circumstances of the relationship which exists between FCC and NHC, and whether the regulatory objective is served.
Section 1004.2 of HIM-15 provides several examples of common ownership. The examples employed in that section suggest individual or spousal stock or ownership rights in each of the related entities. The examples demonstrate that the ownership interest must be a present possessory interest, and not a speculative, contingent future interest. This type of common present possessory interest is not present in the case before this Hearing Officer. The greater weight of the evidence in this case, and application of the examples, do not support a finding that FCC or NHC are related parties by virtue of ownership.
It is clear from the cases cited that the regulatory objective of the related party rules in connection for common ownership is "to avoid the 'double' or 'intra-company' profit which results where a provider purchases good or services from a supplier to which it is related." Richlands Medical Association
v. Harris 651 F.2d 931, 935 (4th Cir. 1981). In deciding whether two entities are "related parties" by ownership, courts have required the presence of some present, possessory interest. For example, in American Hospital Management Corp. v. Harris, 638 F.2d 1208 (9th Cir. 1981), the court relied on the fact that partners holding 60.44 percent interest in one entity also possessed 48.66 percent of the stock of the provider. In another case, Friedman v. Heckler, 765 F.2d 383 (2d Cir. 1985), the court relied on the fact that the owners of the
provider owned a 50 percent interest in the servicing organization to justify a finding of relatedness. Similarly, in Monongahela Valley Hosp., Inc. v. Bowen, 728 F. Supp. 1172 (W.D. Pa. 1990), the court considered the fact that the provider was a subsidiary of the organization with which it was dealing to be conclusive proof that the two entities were related under 42 C.F.R. Section 413.17.
Unlike the cases cited above, there is no evidence in the case before this Hearing Officer that there exists a present possessory ownership interest between FCC and NHC. The evidence clearly shows no ownership overlap whatsoever between FCC and NHC. FCC is a closely-held corporation which, at the time of the agreement, was owned by a sole shareholder, James McCarver. NHC, on the other hand, is a publicly-held limited partnership in which McCarver holds no interest. Therefore, the evidence was persuasive that NHC and FCC can not be considered related by virtue of a common present possessory ownership interest.
The interest which is alleged by AHCA to be the "ownership interest" is the right of NHC to receive from the facilities financed with taxable financing, 25 percent of the net proceeds in the event of a sale of the facility. The evidence established that right to deferred payment is not an ownership interest but, rather, deferred, contingent compensation. NHC was given the right to payment of such monies, to compensate it for the risk and liability it assumed in giving its guaranty to a highly risky start-up venture. Such deferred compensation was recognized as an acceptable mechanism for compensating a guarantor and not burdening the start-up venture with initial guarantee fees. Furthermore the right is highly speculative and its exercise is entirely within the discretion and control of FCC. Such right has none of the normal attributes of an ownership interest: NHC is given no voting rights, NHC can not elect corporate officers or directors and NHC has no rights to dividends. The greater weight of evidence does not support a finding that the contingent guaranty fee is an ownership interest.
A federal appellate court has rejected the notion that participation in future proceeds is probative of relatedness. The long-term lease in Biloxi Regional Medical Center v. Bowen, 835 F.2d 345 (D.C. Cir. 1987), had provided that the proceeds of the Medical Center's operations would revert to the City of Biloxi upon expiration of the lease. The court noted, ". . . we find it difficult to believe that the prospect of having to disgorge proceeds . . . 25 years down the road will have any significant bearing on the present policies and actions of the Center." In the case at bar, NHC's deferred compensation for guaranty services takes the form of participation in future proceeds; however, unlike the Biloxi case, NHC's participation represents earned income and is wholly contingent upon FCC's decision to sell the facilities. Thus, compared to Biloxi, NHC's participation right is justified on independent grounds, and in no way punished FCC by requiring it to disgorge proceeds for which it received no consideration; nor does it grant NHC control over FCC's facilities.
Based upon all of the foregoing and the greater weight of evidence placed before this tribunal, no common ownership between FCC and NHC exists for purposes of AHCA's determination in this case.
The important factor, in order to demonstrate that control exists, is that the actions or policies of the organization are being "significantly influenced" by the controlling organization. Section 1004.3 of the Provider Reimbursement Manual provides several examples of control. Example number 2 is most applicable. The relationship at issue in that example is the relationship between a provider and a management contractor. Example 2 is also significant
because it demonstrates that the Health Care Financing Administration (HCFA) is aware of common industry practices and is providing guidance as to how those common industry practices can be structured to avoid the related party determination. The example demonstrates that it is acceptable to: (1) buy a "package" of services from one vendor, (2) to enter into a full service management contract with a vendor and (3) to buy working capital services from the management company. However, as the example indicates -- when the package of services contains terms that allow the vendor to take over the facility for any reason and without cause or a default, then this standard industry structure has run afoul of the related party regulations. The package of services purchased by FCC from its vendor, NHC, is similar in structure to the example contained in the example with some significant differences: (1) there are no demand features to any of the contractual agreements; (2) all default provisions are triggered by objective criteria and long grace periods are provided to cure any defaults; (3) the management agreement only replaces one key employee of FCC, the facilities' administrator, all other employees at the facilities are FCC employees; (4) FCC owns the facilities out-right, and only used the NHC guaranty to efficiently purchase financing from third party lenders; and (5) the power to direct the actions and policies of FCC are retained by FCC. FCC conducts the following activities: approval of administrators, spending authority above $5,000, pursuit of certificates of need, patient care philosophy, corporate mission, approval of capital and operating budgets and long range planning. The substantial competent evidence reveals that as to Section 1004, there is no related party relationship between FCC and NHC.
Where relatedness is premised on control, the courts have characterized the regulatory objective as to avoid an expenditure of Medicaid funds on goods or services where the price is set through collusion rather than arms-length bargaining. Richlands Medical Association v. Harris, 651 F.2d at 935. The evidence presented demonstrates there was no relationship between FCC and NHC when the two companies entered into the negotiations that resulted in NHC's financial assistance to FCC and a management agreement. The negotiations between the parties were at arms-length. There was, therefore, no potential for provider abuse of the Medicaid program through inflating unfairly the Program's share of the cost of services and supplies.
The court in Northwest Community Hospital v. Califano, 442 F.Supp. 949 (S.D. Iowa 1977), specifically recognized the fact that when unrelated parties negotiate there is no bias toward unfair outcomes for Medicare or Medicaid payment purposes. At issue was Medicare reimbursement of charges for management services and interests on a loan the management company made to the provider, a situation not unlike that in the present case. The court held that any relationship between the parties is to be determined by circumstances existing at the time the management contract is executed, without reference to any rights created under the contract. To do otherwise, the court stated, would effectively preclude reimbursement for most, if not all, fees under health care management contracts, since such contracts typically provide for a substantial degree of management company control. Congress, the court said, did not intend such an outcome. Well-managed facilities benefit the Medicare and Medicaid programs. Indeed, HIM-15 provides for reimbursement of management fees where the management companies have responsibility tantamount to control under the Medicare/Medicaid program principles.
Services provided under the management contract between FCC and NHC begin with construction oversight and continue through day-to-day management, including both the development of operating policies and procedures and their implementation. The right to make decisions on major policies or procedures,
however, has been retained by the owner-provider. FCC must approve, for example, both capital and operating budgets, along with any expenditure by a facility that exceeds $5,000. FCC reviews the financial and reports of the various facilities on a monthly basis. FCC's approval is also required of administrators. Only FCC may obligate FCC when the issue is pledging credit or borrowing money. FCC and NHC have renegotiated and amended the management agreements as well as the guarantee and loan documents. Finally, while management contracts between FCC and NHC are currently in place, provisions in the agreements permit termination by FCC both with cause.
A mere contractual relationship is insufficient to establish control. In a review of the cases, as a general rule, courts reject a finding of relatedness unless the parties are subjected to an unusual avenue of influence.
In essence, it is individuals occupying decision-making seats on the board of directors in both the provider and management company that gives rise to a finding of relatedness through control after a management agreement has been signed as well as before. Medical Center of Independence v. Harris, 628 F.2d 1113 (8th Cir. 1980).
The provisions relied on by AHCA as evidence of relatedness in the case of FCC do not, individually or as a group, represent a departure from the usual and customary terms of business transactions of this type. And further, they do not evidence an ability by NHC, or by FCC, to significantly control the other party. The evidence, as demonstrated above, is that FCC and NHC competitively and at arms-length have bargained and continue to bargain for the services purchased and that FCC is purchasing those services as an efficient and economical provider.
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED as follows:
AHCA issue a final order finding that FCC and NHC are not related parties for the purposes of reimbursement under the Medicaid program.
AHCA issue a final order rescinding its previous notices to FCC that it reimburse the Medicaid Program as a result of previous overpayments by the Medicaid Program.
AHCA issue a final order rescinding the audit report which was issued for the years and facilities at issue, and re-audit those years based on the recommendation herein.
DONE and ENTERED this 31st day of August, 1994, in Tallahassee, Florida.
DANIEL M. KILBRIDE
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904)488-9675
Filed with the Clerk of the Division of Administrative Hearings this 31st day of August, 1994.
APPENDIX
The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties.
Proposed findings of fact submitted by Petitioner.
Accepted in substance: paragraphs 1 (in part), 3 (in part), 8, 9, 10
through 57, 59-87, 88 (in part), 89-95.
Rejected as subsumed, irrelevant or immaterial or argument: paragraphs 1 (in part), 2, 3 (in part), 4, 5, 6, 7, 58, 88 (in part).
Proposed findings of fact submitted by Respondent.
Accepted in substance: paragraphs 1, 3, 4 (in part), 5, 6, 7, 8, 9. Rejected as a conclusion of law: paragraph 2.
Rejected as subsumed, irrelevant, immaterial or argument: paragraphs 10,
11.
Rejected as against the greater weight of evidence: paragraphs 4 (in part).
COPIES FURNISHED:
Harold D. Lewis, Esquire Agency for Health Care
Administration
325 John Knox Road Tallahassee, Florida 32303
Sam Power, Agency Clerk Agency for Health Care
Adminsitration
The Atrium, Suite 301
325 John Knox Road Tallahassee, Florida 32303
Gerald B. Sternstein, Esquire Frank P. Ranier, Esquire RUDEN, BARNETT, MCCLOSKEY,
SMITH, SCHUSTER & RUSSELL, P.A.
215 South Monroe Street, Suite 815 Tallahassee, Florida 32301
Harold M. Knowles, Esquire KNOWLES & RANDOLPH
528 East Park Avenue Tallahassee, Florida 32347
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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.
| Issue Date | Proceedings |
|---|---|
| Apr. 17, 1996 | Final Order filed. |
| Apr. 17, 1996 | Final Order filed. |
| Feb. 20, 1996 | Order Relinquishing Jurisdiction and Closing Files sent out. CASE CLOSED, |
| Feb. 19, 1996 | (Florida Convalescent) Settlement Agreement filed. |
| Feb. 16, 1996 | (FCC) Notice of Hearing on Motion to Enter Recommended Order In Accordance With Settlement and for Sanctions filed. |
| Feb. 14, 1996 | (Petitioner) Motion to Enter Recommended Order In Accordance With Settlement and for Sanctions filed. |
| Sep. 08, 1995 | (Gerald Sternstein) Motion to Reconsider filed. |
| Aug. 30, 1995 | Order sent out. (motion to consolidate denied) |
| Aug. 25, 1995 | (Gerald B. Sternstein) Motion to Consolidate (with DOAH Case No/s. 92-6237-92-6248, 93-886-93-896, 93-6983-93-6994, 94-6893-94-6906) filed. |
| May 23, 1995 | Transcript filed. |
| May 10, 1995 | (Respondent) Notice of Hearing filed. |
| May 08, 1995 | Order Continuing Hearing sent out. (hearing date to be reset by separate order) |
| May 05, 1995 | Petitioner`s Notice of Service of Answers to Interrogatories 1 through 7 filed. |
| May 02, 1995 | Respondent`s Motion for Continuance of Final Hearing filed. |
| Mar. 30, 1995 | (Petitioner`s) Notice of Propounding of Second Set of Interrogatories to Respondent, Agency for Health Care Administration; Petitioners` Second Request for Production to Respondent, Agency for Health Care Administration filed. |
| Mar. 22, 1995 | (Respondent) Notice of Service of Interrogatories filed. |
| Feb. 27, 1995 | Notice of Hearing sent out. (hearing set for 5/22/95; 10:00am; Tallahassee) |
| Feb. 16, 1995 | Respondent`s Request for Final Hearing on Remaining Issues filed. |
| Feb. 03, 1995 | (Petitioner`s) Motion Requesting Final Hearing on Remaining Issues filed. |
| Sep. 15, 1994 | Respondent`s Exceptions to Recommended Order filed. |
| Aug. 31, 1994 | Recommended Order sent out. CASE CLOSED. Hearing held 05/16,17 & 18/1994. |
| Aug. 22, 1994 | Respondent`s Response to Petitioner`s "Suggested Remedy" filed. |
| Aug. 04, 1994 | (Petitioner) Suggested Remedy for Respondent`s Failure to Comply With Discovery Order filed. |
| Jul. 25, 1994 | Case Law for Petition FCC`s Proposed Recommended Order & cover ltr filed. |
| Jul. 22, 1994 | Petitioner`s Proposed Recommended Order filed. |
| Jul. 22, 1994 | Respondent`s Proposed Recommended Order filed. |
| Jul. 19, 1994 | Order sent out. (Petitioner`s Motion for Enlargement of Time for the Filing of Proposed Recommended Orders GRANTED; due on or before 7-22-94) |
| Jul. 15, 1994 | Florida Convalescent Center`s, Inc. Motion to Extend Time to File Proposed Recommended Orders filed. |
| Jul. 07, 1994 | Order sent out. (motion granted) |
| Jul. 05, 1994 | Joint Motion for Extension of Time to File Proposed Recommended Order; Motion to Enlarge Page Limitation on Proposed Recommended Orders filed. |
| Jun. 24, 1994 | Petitioner`s Response to Reply Memorandum of Respondent With Respect to the Deposition of Leonard Homer as Rebuttal Testimony filed. |
| Jun. 06, 1994 | Reply Memorandum in Opposition to Request to Admit Deposition of Leonard Homer as Rebuttal Testimony filed. |
| Jun. 02, 1994 | Transcript (volume 2, tagged) filed. |
| Jun. 02, 1994 | Transcript (Volumes I, III, IV, V/tagged) filed. |
| May 27, 1994 | (Petitioner) Motion and Memorandum of Law In Support of the Request To Admit Deposition of Leonard Homer as Rebuttal Testimony; Deposition of L. Homer filed. |
| May 18, 1994 | CASE STATUS: Hearing Held. |
| May 12, 1994 | Petitioner`s Amended Notice of Taking Depositions of Glenn Gullo, Doug O`Doud and Tracy Wiexelbaum by Telephone Conference; Petitioner`s Corrected Notice of Taking Deposition of Expert Witness Leonard C.Homer,ESQ. by Telephone Conference filed. |
| May 12, 1994 | Joint Motion for Bifurcation filed. |
| May 10, 1994 | Petitioner`s Amended Notice of Taking Depositions of Charles Stophel,Jr. and Gary Crayton filed. |
| May 10, 1994 | Petitioner`s Notice of Taking Depositions of Charles Stophel, Jr. and Gary Crayton; Petitioner`s Notice of Taking Expert Witness Deposition of Leonard C. Homer, esq., by Telephone Conference; Petitioner`s Notice of Taking Depositions of Glenn Gullo, Dou |
| May 09, 1994 | (joint) Pre-Hearing Stipulation filed. |
| May 06, 1994 | Order sent out. (Petitioner`s Motion to compel discovery granted; Petitioner`s motion to compel discovery as to interrogatory 9 denied; Petitioner`s motion for attorney`s fees is reserved) |
| Apr. 26, 1994 | Petitioner`s Motion for Order Compelling Discovery and for Attorney Fees; Petitioner`s Amended Notice of Taking Depositions of Frank Hughes and Steve Diaczyk filed. |
| Apr. 25, 1994 | (Respondent) Notice of Taking Deposition filed. |
| Apr. 25, 1994 | Petitioner`s Notice of Taking Depositions of Frank Hughes and Steve Diaczky filed. |
| Apr. 21, 1994 | (Respondent) Notice of Service of Answers To Interrogatories filed. |
| Apr. 18, 1994 | Preliminary Witness List of Respondent, State of Florida, Agency for Health Care Administration filed. |
| Apr. 15, 1994 | Preliminary Witness List of Petitioner`s, Florida Convalescent Centers, Inc. and Florida Convalescent Associates filed. |
| Mar. 15, 1994 | Petitioner`s First Request for Production to State of Florida, Agency for Health Care Administration w/Exhibit-A; Notice of Propounding First Set of Interrogatories to Respondent, State of Florida, Agency for Health Care Administration (filed in 93-886 |
| Feb. 21, 1994 | Notice of Hearing and Prehearing Order sent out (Hearing set for 5/16-18/94; 1:00pm; Tallahassee; Joint Motion to Consolidate Granted; Consolidated cases are: 92-6237 - 92-6248, 93-0886 - 93-0896, 93-6983 - 93-6994) |
| Feb. 18, 1994 | (Respondent) Notice of Service of First Request to Produce; Notice of Service of Second Request to Produce filed. |
| Feb. 03, 1994 | Joint Agreed Motion to Consolidate Case filed. |
| Dec. 13, 1993 | Order of Consolidation sent out. (Consolidated cases are: 92-6237, 92-6238, 92-6239, 92-6240, 92-6241, 92-6242, 92-6243, 92-6245, 92-6246,92-6247, 92-6248) |
| Dec. 13, 1993 | Case No/s: 92-6237, 92-6238, 92-6239, 92-6240, 92-6241, 92-6242, 92-6243, 92-6244, 92-6245, 92-6246, 92-6247, 92-9248 unconsolidated. |
| Nov. 10, 1993 | Order sent out. (Parties to file status report by 1/31/94) |
| Nov. 05, 1993 | (Petitioner) Joint Agreed Motion to Hold Final Hearing in Abeyance filed. |
| Sep. 15, 1993 | (Petitioner) Status Report filed. |
| Aug. 27, 1993 | Notice of Appearance and Substitution of Counsel and Party filed. (From Harold M. Knowles) |
| Aug. 03, 1993 | (Petitioner) Notice of Appearance as Co-Counsel filed. |
| Jul. 16, 1993 | (Respondent) Notice of Filing w/CC Response to Request for Admissions filed. |
| Jul. 06, 1993 | Order sent out. (Parties to file status report by 9-15-93) |
| Jul. 01, 1993 | (joint) Status Report filed. |
| Jun. 25, 1993 | (Respondent) Motion for Continuance filed. |
| Jun. 23, 1993 | (Petitioner) Notice of Service; Petitioner`s Second Interrogatories to Respondent; Petitioner`s Second Request for Production of Documents From Respondent; Petitioner`s Second Request for Admissions filed. |
| Jun. 07, 1993 | Respondent`s First Request to Produce to Petitioner filed. |
| May 18, 1993 | Order of Abatement sent out. (Parties to file status report by 7-1-93) |
| May 12, 1993 | Petitioner`s First Request to Produce to Defendant filed. |
| May 11, 1993 | Letter to DMK from K. Goldsmith (re: status report) filed. |
| Apr. 14, 1993 | (Petitioner) Notice of Taking Deposition filed. |
| Mar. 23, 1993 | Order of Continuance sent out. (hearing date to be rescheduled at a later date; parties to file status report by 4-30-93) |
| Mar. 19, 1993 | (Respondent) Motion for Continuance filed. |
| Jan. 27, 1993 | Order Granting Continuance sent out. (hearing rescheduled for 4-6-93; 9:30am; Orlando) |
| Jan. 20, 1993 | (Petitioner) Motion for Continuance filed. |
| Dec. 01, 1992 | Order Setting Hearing sent out. (hearing set for 2/16-19/93; 9:30am; Orlando) |
| Nov. 13, 1992 | Order Granting Consolidation sent out. (Consolidated cases are: 92-6237, 92-6238, 92-6239, 92-6240, 92-6241, 92-6242, 92-6243, 92-6244, 92-6245, 92-6246, 92-6247, 92-6248) |
| Nov. 03, 1992 | (Petitioner`s) Motion to Consolidate (with DOAH Case No/s. 92-6238, 92-6239, 92-6240, 92-6241, 92-6742, 92-6743, 92-6744, 92-6745, 92-6746, 92-6747 & 92-6748) filed. |
| Nov. 02, 1992 | Ltr. to JSM from Karen L. Goldsmith re: Reply to Initial Order filed. |
| Nov. 02, 1992 | (Petitioner) Motion to Consolidate (with DOAH Case No/s. 92-6238-92-6248) filed. |
| Oct. 21, 1992 | Initial Order issued. |
| Oct. 16, 1992 | Notice of Related Petitions; Notice; Petition for Formal Administrative Proceeding; Agency Action letter; Supporting Documents filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 09, 1995 | Agency Final Order | |
| Aug. 31, 1994 | Recommended Order | Owner and management company are not ""related parties"" by either ownership or control for medicaid reimbursement purposes. |
