STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

FINAL ORDER

These consolidated cases were heard by David M. Maloney, Hearing Officer of the Division of Administrative Hearings on February 8 and 9, 1996, in Tallahassee, Florida.

APPEARANCES

Petitioner: Peter A. Lewis, Esquire

Goldsmith & Grout, P.A.

307 West Park Avenue Tallahassee, Florida 32302-1017

Respondent: Richard M. Ellis, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Building 3

Tallahassee, Florida 32308 STATEMENT OF THE ISSUES

Whether proposed Rule 59A-4.128, (including Form No. AHCA 3110-6007, incorporated into the rule by reference,) which would govern the evaluation and rating of Florida nursing homes, is an invalid exercise of delegated legislative authority? Whether, contrary to Section 120.56, Florida Statutes, the Agency for Health Care Administration has failed to promulgate in rule policies upon which it has relied in evaluating and rating Florida nursing homes?

PRELIMINARY STATEMENT

On August 11, 1995, the Agency for Health Care Administration (the "Agency" or, as it appears in quoted portions of the proposed rule, "AHCA") published in the Florida Administrative Weekly proposed Rule 59A-4.128 (the "proposed rule.") The proposed rule concerns evaluation and rating of nursing homes. On August 31, 1995, Florida Health Care Association (the "Association" or "petitioner,") filed with the Division of Administrative Hearings a petition seeking a determination pursuant to Section 120.54, Florida Statutes, that the proposed rule is invalid. On September 1, 1995, Petitioner Central Park Lodges, Inc., d/b/a Central Park Village ("CPL") filed a separate petition also seeking a

determination that the proposed rule is invalid. The two proceedings were assigned DOAH Case Nos. 95-4367RP and 95-4372RP, respectively.

Consolidated by order dated September 7, 1995, the two cases were noticed for hearing to commence September 28, 1995. Upon the parties' joint motion, the hearing was continued and reset for November 2, 1995.

In the meantime, the Association filed a petition titled, "Petition for the Determination of the Invalidity of Existing Rule," which attached the proposed rule as an exhibit. In essence, the petition, pursuant to Section 120.56, Florida Statutes, (but not Section 120.535, Florida Statutes,) challenged non- rule policies of the agency. The proceeding was assigned DOAH Case No. 95- 4655RX. On September 22, the Agency moved to dismiss the petition in this last case and, by separate motion, moved for more definite statement. The motion to dismiss was granted in part and the motion for more definite statement was granted. An amended petition was filed, Central Park Lodges was allowed to intervene, and the case was consolidated with the first two cases.

Over the Agency's objection, final hearing on the three cases was continued to December 18. Upon the Association's motion, the case was continued again, this time without objection, to February 8, 1996. In the meantime, the Agency modified the proposed rule through a "Notice of Change," filed with the Department of State.

The case eventually reached final hearing on February 8 and 9, 1996 with the Association and the Agency participating as parties. (Central Park Lodges did not appear.) At hearing, the Association called LuMarie Polivka-West, Patricia Hall (an agency employee,) and Lyn Fletcher as witnesses and introduced through deposition the testimony of Tom Logan and Bonnie Baxter. The Agency presented the testimony of Ms. Hall. Petitioner's Exhibits Nos. 1 - 12 and Respondent's Exhibits Nos. 1 - 8 were all admitted into evidence.

Proposed recommended orders were filed on April 12 and April 15, 1996, by the respondent and the petitioner, respectively. Rulings on proposed findings of fact are contained in Appendix "A" to this final order.

FINDINGS OF FACT

The Rule

1. The full text of the proposed rule, as changed by the Notice of Change filed with the Department of State, is as follows:

   
   

   59A-4.128 Evaluation of nursing homes and rating system.

   
   

   1. The agency shall, at least every 15 months, evaluate and assign a rating to every nursing home facility. The evaluation and rating shall be based on the facility's comp- liance with the requirements contained in sections 59A-4.100 through 59A-4.128, of this rule, Chapter 400, Part II and the require- ments contained in the regulations adopted under the Omnibus Budget Reconciliation Act (OBRA) of 1987 (Pub. L. No. 100-203)

      (December 22, 1987), Title IV (Medicare, Medi- caid, and Other Health Related Programs), Sub-

      title C (Nursing Home Reform), as amended and incorporated by reference.

   2. The evaluation shall be based on the most recent licensure survey report, investigations conducted by AHCA and those persons authorized to inspect nursing homes under Chapter 400, Part II, Florida Statutes.

   3. The rating assigned to the nursing home facility will be either conditional,

      standard or superior. The rating is based on the compliance with the standards contained in this rule and the standards contained in the OBRA regulations. Non-compliance will

      be stated as deficiencies measured in terms of severity. For rating purposes, the following deficiencies are considered equal in severity: Class I deficiencies; Class II deficiencies; and those Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy. Further for rating purposes, the following defici- encies are considered equal in severity: Class III deficiencies; and those Substand- ard Quality of Care deficiencies which con- stitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm.

      1. Class I deficiencies are those with either an imminent danger, a substantial probability of death or serious physical harm and require immediate correction.

         Class II deficiencies are those deficiencies that present an immediate threat to the health, safety, or security of the residents of the facility and the AHCA establishes a fixed period of time for the elimination and correction of the deficiency. Substandard Quality of Care deficiencies are deficiencies which constitute either: immediate jeopardy to resident health or safety; a pattern of

         or widespread actual harm that is not immedi- ate jeopardy; or a widespread potential for more than minimal harm, but less than immedi- ate jeopardy, with no actual harm.

      2. Class III deficiencies are those which present an indirect or potential relationship to the health, safety, or security of the nursing home facility residents, other than Class I or Class II deficiencies.

   4. A conditional rating shall be assigned to the facility:

      1. if at the time of relicensure survey, the facility has one or more of the following deficiencies: Class I; Class II; or Substan-

         dard Quality of Care deficiencies which con- stitute either immediate jeopardy to resident health or safety or a pattern of or wide- spread actual harm that is not immediate jeopardy; or,

      2. if at the time of the relicensure survey, the facility has Class III deficiencies, or Substandard Quality of Care deficiencies which constitute a widespread potential for more than minimal harm to resi- dent health or safety, but less than immedi- ate jeopardy, with no actual harm and at the time of the follow-up survey, such defici- encies are not substantially corrected with- in the time frame specified by the agency

         and continue to exist, or,

      3. new class I or class II deficiencies or Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy are found at the time

         of the follow- up survey.

      4. A facility receiving a conditional rating at the time of the relicensure survey shall be eligible for a standard rating if:

         1. all Class I deficiencies, Class II deficiencies, and those Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy are corrected within the time frame established by the AHCA and

         2. All class III deficiencies and and (sic) those Substandard Quality of Care deficiencies which constitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm are substantially corrected at the time of the follow-up survey. A facility receiving a conditional rating at the time of the relicen- sure survey shall not be eligible for a superior rating until the next relicensure survey.

   5. A standard rating shall be assigned to a facility, if at the time of the relicen- sure survey, the facility has:

      1. No class I or class II deficiencies and no Substandard Quality of care defici- encies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy, and

      2. Corrects all class III deficiencies and those Substandard Quality of Care

         deficiencies which constitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm with- in the time frame established by the AHCA.

   6. A superior rating shall be assigned to a facility, if at the time of the relicen- sure survey, the facility has received a standard rating and meets criteria for a superior rating through enhanced programs and services as contained in (7) of this section.

   7. In order to qualify for a superior rating, the nursing facility must provide initiatives or services which encompass the following areas:

      
      

      1. Nursing services.

      2. Dietary or nutritional services.

      3. Physical environment.

      4. Housekeeping and maintenance.

      5. Restorative therapies and self help activities.

      6. Social Services.

      7. Activities and recreational therapy.

      
      

      In order to facilitate the development of facility wide initiatives and promote creativity, these areas may be grouped or addressed individually. In establishing the facility's qualification for a superior rating, the AHCA survey team will use the Rating

      Survey and Scoring Sheet, Form No AHCA 3110- 6007, June, 1995, incorporated by reference, and may be obtained from the Agency for Health Care Administration.

   8. Upon initial licensure, a licensee can receive no higher than a standard license. After six months of operation, the new licensee may request that the agency evalu- ate the facility to make a determination as to the degree of compliance with minimum requirements under Chapter 400, Part II, F.S., and this rule to determine if the facility can be assigned a higher rating.

   9. Nursing facilities will be surveyed on this section of the rule beginning March 1, 1995.

      
      

      Petitioner's Exhibit No. 3. The "specific authority" given for the rule by the agency is Section 400.23, Florida Statutes. The rule implements Sections 400.12, 400.19 and 400.23, Florida Statutes.

      The Parties

      
      

2. Florida Health Care Association, Inc., is a trade association. Its members are Florida nursing homes and it represents the great majority of nursing homes in the state.

   
   

3. The Agency for Health Care Administration is the licensing agency of the State of Florida responsible for regulating nursing homes under Part II of Chapter 400, Florida Statutes.

   
   

   Florida Unique Among the 50 States

   
   

4. Federal regulations do not require the rating of nursing homes. As one might expect, therefore, states typically do not rate nursing homes. In fact, of the fifty states, Florida is the only state that rates nursing homes.

   
   

   Statutory Requirement for Nursing Home Rules

   
   

5. Section 400.23, Florida Statutes, mandates the Agency, "in consultation with the Department of Health and Rehabilitative Services and the Department of Elderly Affairs, [to] adopt and enforce rules to implement," Part II of Chapter

400. Rules to be adopted by the Agency with regard to nursing homes "include reasonable and fair criteria in relation to ... the care, treatment, and maintenance of residents and measurement of the quality and adequacy thereof, based on rules developed under [Chapter 400, Part II, Florida Statutes,] and [OBRA,] the Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 100-203) (December 22, 1987), Title IV (Medicare, Medicaid, and Other Health-Related Programs), Subtitle C (Nursing Home Reform), as amended." (e.s.) Section 400.23, Florida Statutes.

The Statutory Framework for the Evaluation and Rating of Florida Nursing Homes

1. The Agency is not mandated just to adopt rules for measuring the quality and adequacy of the care, treatment and maintenance of nursing home residents. The Agency is also mandated to evaluate and rate the state's nursing homes. Section 400.23(8), F.S. Presumably, this rating process is intended to promote improvement of nursing homes, to enhance quality and adequacy of care of residents and to aid in selection of nursing homes by potential residents and their families. In any event, the Agency is required, "at least every 15 months, [to] evaluate all nursing home facilities and make a determination as to the degree of compliance by each licensee with the established rules ... as a basis for assigning a rating to that facility." Id.

   
   

   1. The various ratings

      
      

2. Taking into consideration the most recent inspection report and other material deemed pertinent by statute, the Agency must assign one of three ratings to a nursing home under evaluation: standard, conditional or superior.

   
   

3. A standard rating means,

   
   

   that a facility has no class I or class II deficiencies, has corrected all class III deficiencies within the time established by the agency, and is in substantial compliance at the time of the survey with criteria

   established under this part, with

   [agency rules] ... , and, if applicable, with rules adopted under [OBRA] ... as amended. (e.s.) Section 400.23(8)(a), F.S.

   
   

4. A conditional rating means,

   
   

   that a facility, due to the presence of one or more class I or class II deficiencies, or class III deficiencies not corrected within the time established by the agency, is not in substantial compliance at the time of the survey with criteria established under this part, [agency rules] ..., or, if applicable with rules adopted under [OBRA] ... as amended. ...

   (e.s.) Section 400.23(8)(b), F.S.

   
   

5. A superior rating means that a facility meets the criteria for a standard rating and exceeds those criteria through enhanced programs and services in seven areas: 1. nursing service; 2. dietary or nutritional services; 3. physical environment; 4. housekeeping and maintenance; 5.

   restorative therapies and self-help activities; 6. social services; and, 7. activities and recreational therapy, (the "seven statutory areas of enhancement.") Section 400.23(8)(c), F.S. In order to achieve a superior rating, a facility may group the seven areas of enhancement within single programs or address each individually. If a facility chooses to group any within a program or initiative, however, the facility will not qualify for a superior rating "if fewer than three programs or initiatives are developed to encompass the required areas." Section 400.23(8)(d), F.S.

   
   

   ii. Rules with regard to Ratings.

   
   

6. The Agency is responsible for establishing the rules under which most of the evaluation and rating process takes place. The Agency was charged with establishing uniform procedures by January 1, 1994, for evaluating nursing homes including the provision of criteria in the seven statutory areas of enhancement. Section 400.23(8)(h), F.S. Under the proposed rules, the rating is tied to classification of deficiencies, which must be "according to the nature of the deficiency." Section 400.23(9), F.S.

   
   

   OBRA Regulations and their Applicability

   
   

7. Compliance by a nursing home with OBRA regulation, if applicable, is part of the evaluation of nursing homes and is one aspect used to determine which rating, (conditional, standard or superior,) is to be given a nursing home. Section 400.32(8)(a),(b) and (c), F.S.

   
   

8. Effective July 1, 1995, the U.S. Department of Health and Human Services amended its rules regarding the survey, Medicare-certification and enforcement of regulations for nursing homes. The new rules implemented certain provisions of the federal Omnibus Budget Reconciliation Act of 1987 ("OBRA '87,") as amended. Changes were thereby made in the process of surveying skilled nursing facilities under Medicare and nursing facilities under Medicaid and in the process for certifying that such facilities meet the federal requirements for participation in Medicare and Medicaid programs.

9. The agency considers federal OBRA regulations in place after the amendments made under OBRA 87 to be applicable, including those adopted with an effective date of July 1, 1995. No evidence was introduced in this proceeding to contradict the agency's opinion that OBRA regulations are applicable to Florida nursing home ratings and evaluations.

   
   

10. The OBRA regulations effective in July of 1995 include a "matrix" made up of twelve boxes. The matrix, to be referred to in determining whether a nursing home is in "substantial compliance" with federal regulations and whether a deficiency constitutes "substandard quality of care," or not, was published by the federal Health Care Financing Administration in the Department of Health and Human Services as a pamphlet entitled "Public Reference Guide." The pamphlet states as part of its "Background" section, "[t]his regulation becomes effective on July 1, 1995.

    
    

11. The matrix (see Appendix "B", a copy of the matrix admitted into evidence as Petitioner's Exhibit No. 1) contains four levels of severity of federal deficiencies in bands stacked horizontally one on top of the other, described in descending order to the left of the matrix: "Immediate Jeopardy to Resident Health or Safety"; "Actual Harm that is not Immediate Jeopardy",; "No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy"; and, "No Actual Harm with Potential for More than Minimal Harm". The matrix is divided into three columns at its base describing the scope of the deficiency in ascending order from left to right: "Isolated," "Pattern," and "Widespread." The intersections of the four bands of severity and the three columns of scope produce the twelve boxes. The boxes are labeled "A" through "L." The A box, the least intense in severity, is denominated "No Actual Harm with Potential for Minimal Harm" and is the most confined in scope, that is, "Isolated." The antipode of the "A" box is the "L" box, where severity is most intense, denominated "Immediate Jeopardy to Resident Health and Safety," and scope is the broadest, that is, "Widespread."

    
    

12. The pamphlet is coded to indicate deficiencies which do not defeat substantial compliance. These are all the deficiencies which fall into the A, B and C boxes; that is, the least severe deficiencies no matter what their scope. Deficiencies falling into the remainder of the boxes indicate a facility's failure to achieve substantial compliance.

    
    

13. The pamphlet is also coded to indicate deficiencies which constitute substandard quality of care. These are all of the categories of most severe deficiencies, ("Immediate Jeopardy to Resident Health or Safety"), that is, the J, K and L boxes; the two of the next most severe category of deficiencies, ("Actual Harm that is not Immediate Jeopardy") that are broadest in scope, ("Pattern" and "Widespread"), that is, the H and I boxes; the broadest in scope ("Widespread") of the third level in descending order of categories of severity, ("No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy,") that is, the F box; and none of the least severe category of deficiencies. Left as not indicating substandard quality of care are deficiencies which fall into Boxes A through E and Box G.

    
    

14. One would be disappointed if holding the expectation that deficiencies which would indicate a facility culpable of substandard of care would be divided somewhere neatly in the progression from the A box to the L box so that every box lettered higher in the alphabet and above this division would contain deficiencies constituting substandard care and every box below this line and lower in the alphabet would contain deficiencies not constituting substandard care. This is because the expectation fails with the F and G boxes. Every box

    higher than G, (H through L) contain categories of deficiencies constituting substandard of care and every box lower than F, (A through E,) contain categories free of substandard of care. But there is a reversal when it comes to the F and G boxes. The G box, with the next to the most intense severity, ("Actual Harm that is not Immediate Jeopardy") and the narrowest scope, ("Isolated,") does not contain deficiencies constituting substandard quality of care. In contrast, deficiencies which fall into the F box, a box with lower severity than the G box, that is, the next to the least intense severity, ("No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy,") do indicate substandard quality of care because the scope of the F box is the greatest, that is, "widespread."

    
    

15. The code "key," which appears in the federal pamphlet and is part of the federal regulation, appears just below the matrix on the pamphlet. With regard to any box coded as "substandard quality of care," the key contains the following stipulation:

    
    

    Substandard quality of care: any deficiency in s. 483.13, Resident Behavior and facility Practices, s. 483.15 Quality of Life, or in

    S. 483.25, Quality of Care that constitutes: [deficiencies that fall in the F box, or boxes H through L.]

    
    

    Respondent's Exhibit No. 2.

    
    

    The Challenge to the Proposed Rule

    
    

16. The Association's challenge to the proposed rule has two parts: the first is to the text of the rule; the second, to Form No. AHCA 3110-6007, a "superior rating" form incorporated into the rule by reference.

    
    

    1. The Text

       
       

       1. Omission of Federal Limitations

          
          

17. The proposed rule contains definitions of Class I, II and III deficiencies as well as definitions of "substandard quality of care" deficiencies. The definitions of the Class I, II and III deficiencies come directly from Section 400.23 of the Florida Statutes. In contrast, the definition of "substandard quality of care" deficiencies, while established by regulations adopted under the Omnibus Reconciliation Act (OBRA) of 1987 (Pub. L. No. 100-203), as discussed above, are not the same in the proposed rule as in the federal regulations. This is because the federal regulations limit the definition in ways the proposed rule does not.

    
    

18. The federal regulations furnish the following definition:

    
    

    Substandard Quality of Care means one or more deficiencies related to participation require- ments under [s.] 483.13, Resident behavior and facility practices, [s.] 483.15, Quality of life, or [s.] 483.25, Quality of care of this chapter, which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is

    not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm.

    
    

    42 CFR 488.301. This provision of OBRA regulation limits the definition of "substandard quality of care," to deficiencies related to participation requirements under three sections of Chapter 42 in the Code of Federal Regulations: s. 483.13, governing resident behavior and facility practices; s. 483.15, governing quality of life; and s. 483.25, governing quality of care.

    
    

19. The proposed rule, by comparison, defines "Substandard Quality of Care" deficiencies as those which constitute either: "immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm." Petitioner's Ex. No. 3, p.

1. Unlike the federal regulations, the proposed rule does not limit the definition to deficiencies related to participation requirements under the three sections enumerated in the section defining "substandard quality of care," 42 CFR 488.301.

   
   

   1. It was the agency's intent that the proposed rule follow the definition of the federal regulations precisely. Nonetheless, the agency omitted from the proposed rule the limitations present in the federal regulations. The omission was attributed by the agency to oversight on its part. In the view of the agency, the absence in the proposed rule of the federal regulations' limitations makes the proposed rule "incomplete." (Tr. 339.)

      
      

      1. Lack of Definitions in OBRA Regulations

         
         

   2. The OBRA regulations do not define the terms used to describe scope: "isolated," "pattern," or "widespread." Neither do the statute or the proposed rule.

      
      

   3. With regard to severity, the term "immediate jeopardy" is defined in the OBRA regulations, but the terms "actual harm" and "minimal harm" are not defined. The terms "actual harm" and "minimal harm" are not defined by statute or the proposed rule.

      
      

   4. The lack of definitions creates a problem among surveyors. Left to themselves, surveyors define the terms differently. Differences as to definitions are found even among surveyors on the same agency survey team.

      
      

      1. Superior Rating with Substandard Quality of Care

      
      

   5. Deficiencies assigned the next to the lowest severity but the broadest scope, that is, those that fall into the F box, are considered substandard quality of care under the OBRA regulations and the proposed rule. Nonetheless, these deficiencies are equated with Class III deficiencies. A facility found to have rendered substandard quality of care equated with a Class III deficiency, therefore, is eligible still to receive a superior rating provided the deficiencies are corrected in a timely fashion.

      
      

   6. At present, under current law without the proposed rule being effective, it is possible for the most severe OBRA deficiencies to be classified

      by the state as Class I, II or III deficiencies. The proposed rule would change that so that the most severe OBRA deficiencies would not be classified as Class III deficiencies.

      
      

   7. Aside from any requirement of the statute, the agency's rationale for using the OBRA regulations with regard to substandard quality of care was to ensure that facilities which are found to be providing substandard quality of care not receive a superior rating.

      
      

      1. The Superior Rating Form

      
      

   8. The Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007, (the "Superior Rating Form) used by agency surveyors since March 1, 1995, opens with a section of instructions to the agency's surveyors to be used in making the determination as to whether a nursing home should be rated "superior."

      
      

   9. In observance of the statute, the instructions caution the surveyors that a superior rating survey is to be conducted only on facilities which have achieved "a standard rating at the time of the relicensure survey." The instructions go on to state:

      
      

      Florida law provides that a superior rating may only be awarded to a facility that exceeds the criteria for a standard rating in the following areas:

      1. Nursing services.

      2. Dietary or nutritional services.

      3. Physical environment.

      4. Housekeeping and maintenance.

      5. Restorative therapies and self help activities.

      6. Social services.

      7. Activities and recreational therapy.

         
         

         Petitioner's Ex. No. 6.

         
         

   10. The instructions then state, "[a] facility will be deemed to have met the statutory requirements if it attains the score necessary for a superior rating under this survey instrument." Id.

       
       

   11. After further instructions, the form is divided into six sections, four of which are to be completed by the surveyor and two of which are to be completed by the facility.

       
       

   12. The two to be completed by the facility are titled, "Consumer Satisfaction Survey," and "Staffing Characteristics." Id.

       
       

   13. The remaining four (those to be completed by the surveyors) call for descriptions of: 1. the resident population; 2. any quality improvement programs; 3. training not required by regulation to staff; and, 4. types of adjunct or specialty positions consistently used to provide improved resident care.

       
       

       1. Scored Sections

          
          

   14. Of the six sections to be filled out by the surveyor or the facility, four are scored to determine whether a superior rating should be assigned. The

       four are "quality improvement," "training," "resident care," and "staffing characteristics." Each demands a minimum number of points in order for the facility to receive a superior rating. "Quality improvement" demands 14 points, "training" 5, "resident care" 16, and "staffing characteristics" 12.

       
       

       1. Staffing Characteristics

          
          

   15. As to "staffing characteristics," the section of the form awards points for the years of experience of various key personnel at the facility. Points are also awarded for the number of years those individuals who occupy key staff positions have been employed by the facility. Points are awarded neither on the basis of ability of staff nor for adequate performance.

       
       

   16. The staffing section is the one scored section completed by the facility rather than the surveyors. After completion, the information filled in by the facility is not reviewed by the agency.

       
       

   17. While common sense advances a nexus between longevity of service and quality of service, no hard data was presented that longevity of service of key staff members plays a role in a facility's ability to provide superior service.

       
       

   18. Furthermore, the form provides for points to be assigned for the credentials of the staff members but neither the form nor the rule identify which credentials should yield points. The agency has such a list of credentials but neither the form nor the rule makes reference to the list.

       
       

   19. Agency surveyors do not confirm or question the information the facility provides in the "staffing characteristics" section of the form.

       
       

       1. The other scored sections

       
       

   20. With regard to the other three scored sections of the form, most of the information and scoring relate to the seven areas of enhanced programs and services the statute lists as necessary to qualify for a superior rating. For example, under Section III., the "Quality Improvement" section, points are awarded for active involvement in the quality improvement program of the following department/disciplines: nursing, rehabilitative services, dietary, housekeeping, maintenance, activities, social services and administration/medical staff. These department/disciplines all relate to at least one of the seven statutory areas of disciplines. Involvement of the nursing staff in a quality improvement program, for example, clearly relates to enhanced services in the area of "nursing services." Likewise, the same may be said for involvement of housekeeping and maintenance in the quality improvement program vis-a-vis the statutory area of housekeeping and maintenance.

       
       

   21. Other areas of scoring, however, do not relate as directly to one of the seven statutory areas of enhancement. Under Section III., "Quality Improvement," for example, 2 points are awarded under the heading "Implementation plans," for each of "resolve problems identified thorough monitoring aspects of care," "resolve problems identified by consumers," and "resolve problems identified by staff and management." With regard to the resolution of problems identified by staff and management, there is nothing to connect the problems to the seven areas of enhancement. For instance, a staff member could identify a personal problem with a supervisor, the resolution of which would have no impact on enhancement in any of the seven statutory areas.

   22. This shortcoming of the Superior Rating Form, (lack of nexus, with regard to achievement of points, between scored information and the seven areas of enhancement, appears throughout the scored sections.) In sum, it is difficult to know for certain that when points are awarded in every instance there will be a relationship with one of the seven statutory areas of enhancement.

       
       

   23. At the same time, at least one of the areas of enhancement appears to be shortchanged in the form. The only place "physical environment" enhancement is awarded points is under Section V., "Resident Care," and then only when "the facility has enhanced the physical environment to meet the extraordinary needs of special population residents." Id., p. 7. Yet, the listing of "physical environment," in the statute as one of the seven areas of enhancement does not limit the applicability of the area to any segment of the resident population. "Physical environment," is an area of enhancement applicable without limitation to the entire resident population of a nursing home.

       
       

   24. Nor does there appear to be much in the Superior Rating Form that relates directly to the statutory area of enhancement, "Restorative therapies and self-help activities."

       
       

   25. The difficulty in relating the scored categories of the form to the seven statutory areas of enhancement sets up the possibility for a nursing home to receive a superior rating when it does not deserve one because it does not exceed the criteria for a standard rating through enhanced programs and services in all seven areas.

       
       

   26. The form also requires a minimum of 14, 5, 16 and 12 points in the form's scoring categories of "Quality Improvement," "Training," "Resident Care," and "Staffing Characteristics," respectively. These minimums set up the possibility that a nursing home deserves a superior rating and yet will not receive one because, although it has enhanced programs and services in all seven areas, it may still not receive enough points as required by the form. This is true particularly if it does not receive the minimum number of points, (twelve,) under "staffing characteristics." In such a case, a facility could have enhancements in all seven areas, yet be defeated because of key personnel not having been in the facility's employ long enough.

       
       

       AHCA Use of an Unpromulgated Rule

       
       

   27. With the exception of the agency's use of the Superior Rating Form, there was no evidence offered at hearing that AHCA is using an unpromulgated rule to evaluate and rate nursing homes.

       
       

       CONCLUSIONS OF LAW

       
       

   28. The Division of Administrative Hearings has jurisdiction of these three consolidated cases pursuant to Sections 120.54 and 120.56, Florida Statutes.

       
       

   29. The Association has standing to bring these three cases.

       
       

   30. The burden of proof is upon the Association to show by a preponderance of the evidence that the proposed rule is an invalid exercise of legislative authority. Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759, 762 (Fla. 1st DCA 1978).

       Challenge to the Rule's Text

       
       

   31. The Association advances an elaborate argument founded on a number of grounds as to why the proposed rule is invalid. First, the Association sees the rule as an invalid exercise of delegated authority because in opposition to the federal OBRA regulations it fails to limit deficiencies constituting "substandard quality of care" to deficiencies falling under the three sections of the Code of Federal Regulations, ss. 483.143, 483.15 and 483.25.

       
       

   32. At first blush, the argument appears to be sound. The agency admitted the rule's failure to follow the OBRA regulations definition of "substandard quality of care" was an oversight and left the rule incomplete. The Agency, however, responds that the argument fails to account for the applicability of the OBRA regulations in the evaluation and rating process set up by the rules. Because the OBRA regulations are applicable, the agency argument continues, any limitations in the regulations themselves must be followed by the Agency in the evaluation and rating process.

       
       

   33. Indeed, the federal matrix in the pamphlet, "Pocket Reference Guide," (an OBRA regulation, itself, with an effective date of July 1, 1995,) used by agency surveyors and the agency, limits the deficiencies as does the definition of "substandard quality of care" elsewhere in the OBRA regulations.

       
       

   34. Moreover, the proposed rule, itself, opens with the statement that the agency's evaluation and rating of nursing homes is to be based not only on compliance with the requirements of applicable rules in Chapter 59A, Florida Administrative Code, and Part II of Chapter 400, Florida Statutes, but also:

       
       

       the requirements contained in the regulations adopted under the Omnibus Budget Reconcilia- tion Act (OBRA) of 1987 (pub. L. No. 100-203) (December 22, 1987), Title IV (Medicare, Medi- caid, and Other Health Related Programs), Sub- title C (Nursing Home Reform), as amended and incorporated by reference.

       
       

       Proposed Rule 59A-4.128(1), as proposed by the Agency for Health Administration.

       
       

   35. This statement flows directly from the statute that the rule intends to implement, Section 400.23. In subsection (2)(f) of the statute to be implemented, the agency is charged with adoption of rules which are to include criteria in relation to the measurement of the quality and adequacy of the care, treatment and maintenance of residents based on not only rules developed under Florida law but also rules under OBRA. And, most pertinently, in subsection (8) of the statute to be implemented, all of the ratings are dependent upon rules under OBRA, if applicable.

       
       

   36. At best, the Association has demonstrated a conflict in the proposed rule. On the one hand, the rule refers to substandard quality of care without limitation, but on the other, the rule bases the evaluation and rating process on compliance with OBRA regulations as well as state law. The OBRA regulations' incorporation into the proposed rule prevails over the Agency's unintentional failure to include the federal regulation's limitations when it used the term "substandard quality of care." Neither the agency nor its surveyors will be misled by the oversight. Anyone claiming any benefit from the rules' omission when using the term "substandard quality of care," will have to bend to the proposed rule's unequivocal incorporation of the OBRA regulations.

   37. It would be prudent for the Agency to change the proposed rule to correct the omission of the federal regulations limitations, but the oversight, once viewed in the light of the clear, express intent that the OBRA regulations govern the evaluation and rating process, does not render the rule invalid.

       
       

   38. The Association advances a number of other arguments in support of a determination of invalidity. It sees the proposed rule as invalid because it: one, illogically uses the OBRA enforcement regulations as a basis for determining a nursing home's rating; two, is arbitrary and capricious because use of the OBRA regulations requires the utilization of a system that employs vague and ambiguous terms in its application; three, is illogical because, through linkage with the federal regulations, it does not accomplish its stated purpose of preventing facilities with substandard quality of care deficiencies from obtaining a superior rating; and, four, is arbitrary and capricious because it uses terms borrowed from the OBRA regulations which are not defined, thereby vesting unbridled discretion in the agency.

       
       

   39. Each of the these arguments is based on the incorporation of the federal regulations into the proposed rule's evaluation and rating process.

       That incorporation cannot be deemed illogical, arbitrary or capricious or in any other manner "action which goes beyond the powers, functions and duties delegated by the legislature," Section 120.52(8), Florida Statutes, because it is the legislature which has demanded inclusion of the federal regulations in the proposed rule. It has done this indirectly in Section 400.23(2)(f), Florida Statutes, and directly in Section 400.23(8), Florida Statutes, in which all of the ratings are dependent upon compliance or non-compliance with OBRA regulations.

       
       

   40. While the Agency may have set out to ensure that no facility with a deficiency which indicates substandard quality of care ever receives a superior rating, the statute sets no such goal. Deficiencies that fall into the F box in the federal matrix constitute substandard quality of care but because of the level of severity of "F box" deficiencies, that is, the next to the least severe, "No actual harm with potential for more than minimal harm that is not immediate jeopardy," it is not illogical to equate these deficiencies with Class III deficiencies, the timely correction of which will not defeat a superior rating. In this regard, it is worth considering that such a deficiency will not prevent a facility from obtaining a standard rating if corrected in time. It is reasonable to allow a deficiency of such relatively low severity to not stand in the way of a standard rating if corrected in a timely fashion. The only difference between a standard and superior rating is enhanced programs in the seven areas. That difference is created by the legislature in Section 400.23(8)(c), Florida Statutes.

       
       

   41. At bottom, the Association's quarrels with the rule all stem from the OBRA regulations. The OBRA regulations are involved because the legislature has declared that they should be. There is nothing in this proceeding that can be done about vagueness in the OBRA regulations if it, indeed exists, or any other illogic, arbitrariness or caprice if created by the federal regulations. Nor is there anything that can be done in this proceeding about the legislature's declaration in statute that OBRA regulations are to be utilized by the agency in the evaluation and rating of nursing homes.

       The Superior Rating Form

       
       

   42. The Association makes its case with regard to the form. While the argument can be made that the information from the form is connected in part, at least, to the seven statutory areas of enhancement, it is difficult to tie much of the information to the seven areas of enhancement. It diminishes the importance of some of the areas of enhancement and it introduces considerations, such as in the staffing characteristics section, which could easily be unrelated to the seven statutory areas of enhancement.

       
       

   43. Worst of all, the form sets up the possibility that nursing homes deserving of superior ratings will not receive them and those not deserving superior ratings will receive them. This obviously makes the form illogical and capricious.

       
       

   44. The Proposed Superior Rating Form is an invalid exercise of delegated legislative authority.

       
       

       Case No. 95-4655RX

       
       

   45. Since the Association failed to prove reliance on non- rule policies, (with the exception of use of the form, determined herein to be an invalid exercise of delegated legislative authority), the case is dismissed.

ORDER

Based on the foregoing, it is, hereby, ORDERED that:

1. Proposed Rule 59A-4.128, with the exception of its incorporation of the Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007, is not determined to be invalid pursuant to Section 120.54, Florida Statutes;

   
   

2. The incorporation of the Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007 in Proposed Rule 59A-4.128 and the form itself are determined pursuant to Section 120.54, Florida Statutes, to be invalid exercises of delegated legislative authority.

   
   

3. Case No. 95-4655RX is dismissed.

DONE AND ORDERED this 16th day of July, 1996, in Tallahassee, Leon County, Florida.

DAVID M. MALONEY, 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 16th day of July, 1996.

APPENDIX A

Petitioner's Proposed Final Order

1. Paragraphs 1 - 7, 9 - 24, 27, 37 - 56 of petitioner's proposed final order are adopted, in substance, insofar as material.

2. Paragraphs 8 and 25 of petitioner's proposed final order are rejected insofar as they claim the statute allows a superior rating to be assigned a facility which has enhanced programs in only three of the seven statutory areas of enhancement. The statute requires enhancement in all seven areas. It simply allows one program or initiative to cover more than one area of enhancement and a facility to still qualify for a superior rating so long as no less than three programs or initiatives cover all seven areas.

3. Paragraph 26 of petitioner's proposed final order is subordinate. While it is true that none of the four scored parts of the form are listed as any one of the individual seven statutory areas of enhancement, the four parts, nonetheless relate to the seven areas of enhancement and each part includes at least some of the seven areas of enhancement.

4. Paragraphs 28 - 31 of petitioner's proposed final order are irrelevant.

5. Paragraphs 32 - 36 of petitioner's proposed final order are subordinate.

Respondent's Proposed Final Order

1. Paragraph 1 of the respondent's proposed final order is adopted with the recognition that the third sentence is a conclusion of law.

2. Paragraphs 2 - 5, 7 - 10, 12 - 15, 18 - 38 are adopted in substance, insofar as material.

3. Paragraphs 6 and 39 of the respondent's proposed final order are ruled irrelevant.

4. Paragraph 11 of the respondent's proposed final order is adopted with the exception of the last sentence which is a conclusion of law.

5. Paragraphs 16 and 17 of the respondent's proposed final order are subordinate.

6. Paragraphs 40 - 48 of the respondent's proposed final order under the heading "Findings of Fact Specific to Case No. 95- 4655RX" are irrelevant since no evidence was produced in the proceeding that any unpromulgated rule, other than the Superior Rating Form determined in this order to be invalid, was relied on by the Agency.

APPENDIX B

REMEDY SCALE BASED ON SCOPE AND SEVERITY

==============='////////////////'////////////////'///////////////

4 Immediate ' POC 10(J) ' POC 11(K) ' POC 12(L) Jeopardy to 'REQUIRED: CAT.3 'REQUIRED: CAT.3 'REQUIRED: CAT.3 Resident 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1 'OPTIONAL: CAT.2 Health or 'OPTIONAL: CAT.1 'OPTIONAL: CAT.2 'OPTIONAL: CAT.1 Safety ' ' '

==============='================'////////////////'///////////////

3 Actual Harm ' POC 7(G) ' POC 8(H) ' POC 9(1) is not 'REQUIRED: CAT.2 'REQUIRED*:CAT.2 'REQUIRED*:CAT.2 Immediate 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1 Jeopardy ' ' '

==============='================'================'///////////////

2 No Actual ' POC 4(D) ' POC 5(E) ' POC 6(F) Harm with 'REQUIRED*:CAT.1 'REQUIRED*:CAT.1 'REQUIRED*:CAT.2 more than 'OPTIONAL: CAT.2 'OPTIONAL: CAT.2 'OPTIONAL: CAT.1 Minimal Harm ' ' '

that is not ' ' '

Immediate ' ' '

Jeopardy ' ' '

' ' 1 No Actual ' 1(A) ' 2(B) ' 3(C)

Harm with 'COMMIT TO ' ' Potential for' CORRECT (POC) ' POC ' POC

Minimal Harm 'NO REMEDIES ' (NO REMEDIES) ' (NO REMEDIES) 'NOT ON HCFA 2567' '

ISOLATED PATTERN WIDESPREAD

/// Substandard qualify of care any deficiency in 483.13 (F221-F225) Resident Behavior and Facility Practices. 483.15(F240-F258) Quality of Life or in 483.25 (F309-F333) Quality of Care that constitutes immediate jeopardy to resident health or safety; or a pattern of or widespread actual harm that is not immediate jeopardy; or, a widespread potential for more than minimal harm that is not immediate jeopardy with no actual hear.

=== Substantial compliance

Remedy Categories

Category 1 (Cat. 1) Category 2 (Cat. 2) (Category 3 (Cat 3) Directed Plan of Denial of Payment Temporary Management Correction State for New Admissions; Termination

Monitor; and/or Denial of Payment Options: Civil Money Directed In-service for All Individuals. Penalties: $3,050- Training Imposed by HCFA; and $10,000 per day

/or Civil Money Penalties: $50-

$3,000 per day

* Denial of Payment for New Admissions must be imposed when a facility is not in substantial compliance within 3 months after being found out of compliance.

Denial of Payment and State Monitoring must be imposed when a facility has been found to have provided substandard quality of care on three consecutive standard surveys.

COPIES FURNISHED:

Richard M. Ellis, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Building 3

Tallahassee, Florida 32308

Peter A. Lewis, Esquire Goldsmith & Grout, P.A.

307 West Park Avenue Tallahassee, Florida 32301

Jerome W. Hoffman, Esquire

Agency for Health Care Administration 2727 Mahan Drive, Building 3

Tallahassee, Florida 32308

Carroll Webb, Executive Director Administrative Procedures Committee Holland Building, Room 120 Tallahassee, Florida 32302

Liz Cloud, Chief

Bureau of Administrative Code The Elliott Building Tallahassee, Florida 32399

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules Of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the Agency Clerk Of The Division Of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court Of Appeal, First District, or with the District Court Of Appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 95-004367RP

Orders for Case No: 95-004367RP