STATE OF FLORIDA ; AGENCY FOR HEALTH CARE ADMINISTRATION HORIZON SPECIALTY AND REHABILITATION CENTER, - Petition er, v. DOAH Case No. 01-3608 DSI Leva Judge Daniel Manry Audit no. NH-00-157R Provider no. 211192 AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. ; / FINAL ORDER On July 9, 2001, Respondent AGENCY FOR HEALTH CARE ADMINISTRATION notified the Petitioner that its Medicaid costs for the year ending January 31, 1999 should be adjusted, resulting in a reduction of Petitioner’s allowable costs. These audit adjustments to Petitioner’s reported costs will result in a reduction of allowable Medicaid costs for reimbursement purposes. Such reductions will result in a lower Medicaid per diem rate for the facility. Petitioner requested and was granted an administrative hearing. However, on November 29, 2001 the Petitioner filed a Notice of Voluntary Dismissal. On December 3, 2001, DOAH issued an Order Closing File. Based on the foregoing, the petition filed in the above-styled cause is dismissed, the audit adjustments as set forth in the July 9, 2001 audit report and attachments are final, the facilities per diem rates shall be re-calculated, and the Agency’s file is hereby CLOSED. Sr meres epee OT RRR RET com oer TREE ee Mitt --sie e ra DONE and ORDER this_ /s day of Ait? , 2002, in (row, Rhonda M. Medows, MD, Secret Agency for Health Care Administration Tallahassee, Leon County, Florida. A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Theodore E. Mack, Esquire Powell & Mack — 803 North Calhoun Street Tallahassee, Florida 32303 Kelly A. Bennett Assistant General Counsel Agency for Health Care Administration Mail Stop #3 (Interoffice Mail) Daniel Manry Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 John Owens Medicaid Program Analysis : Agency for Health Care Administration Mail Stop #21 (Interoffice Mail) Willie Bivens, Finance & Accounting Mail Stop #14 (Interoffice Mail) ee ee eee TR leper rae Se eee peo eames CORE ERR RRR Or BERR Tr ee Terme RRS PORE Re eR FERRE RR ener CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing document has been furnished to the above-named addresses by U.S. Mailonthis_/S _ day of Detuoke? 20a, - “ae Agenc Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 922-5873 wo hn : vue oo on Ala. Pre emerge rene coe & r sede GUY Leet arin Pemlou Qh Fe uae eee eee STATE OF FLORIDA ar AGENCY FOR HEALTH CARE ADMINISTRATION NU } 02 FEQ co Ie fa ky Ag Fy Pars c Shes ag HORIZON SPECIALTY AND arts REHABILITATION CENTER, are . Petitioner, vs vs. ; Case No. 01-3608 AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. NOTICE OF VOLUNTARY DISMISSAL Horizon Specialty and Rehabilitation Center, by and through undersigned counsel, hereby voluntarily dismisses its petition for a formal administrative hearing in this matter.” Submitted this 29th day of November, 2001. Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303 (850) 224-1452 Attorney for Horizon CERTIFICATE OF SERVICE | HEREBY CERTIFY that the original of the foregoing has been furnished by Facsimile to Kelly A. Bennett, Assistant General Counsel, Agency for Health Care Administration, Fort Knox Building 3, 2727 Mahan Drive, Tallahassee, Florida 32308-5403, this 29th day of November, 2001. | Theodore E. Mack CORRWE rm crore oogepcoe eA a ad a weer STATE OF FLORIDA s DI STRATIVE HEAR VISION OF ADMINISTRATIVE HERRINGS Ie HORIZON SPECIALTY AND REHABILITATION CENTER, “Petitioner, vs. Case No. 01-3608 AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. ORDER CLOSING FILE This cause having come before the undersigned on Petitioner's Notice of Voluntary Dismissal, filed November 29, 2001, and the undersigned being fully advised, it is, therefore, ORDERED that: 1. The final hearing in this cause scheduled for December 4 and 5, 2001, is hereby cancelled. 2. The file of the Division of Administrative Hearings in the above- captioned m matter is hereby closed. DONE AND ORDERED this 3rd day of December, 2001, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us eee ee OE RTE TO REIT PRE TR PR TERR IC er RR = RR RR RE Takano oo oReEr rr —_— a STATE OF FLORIDA NACA . AGENCY FOR HEALTH CARE ADMINISTRATION ¢” 2 FEB A JEB BUSH, GOVERNOR tuk Beane: Acts SECRETARY Q ° July 9, 2001 Return Receipt No. 7000 1530 0000 5397 4053 HORIZON SPECIALTY/REHAB KISSIMMEE HORIZON SPEC/REHAB-KISSIMMEE 221 PARK PLACE BLVD KISSIMMEE, FL 34741 Provider No./Name: 211192/HORIZON SPEC & REHAB CTR-KISSIMM Audit Period/Engagement No.: January 31, 1999/NHO0-157R Dear Administrator: We have completed the audit of your facility’s Medicaid cost report for the period specified above. A copy of the audit report is attached for your information. Audit adjustments result from the application of Medicaid ~ reimbursement principles to costs as reported on the Medicaid cost report for the period specified. You have the right to request a formal or informal hearing pursuant to Section 120.57, Florida Statutes. If a petition for a formal hearing is made, the petition must be made in compliance with Section 28-106.201, Florida Administrative Code. Please note that Section 28-106.201(2) specifies that the petition shall contain a concise discussion of. specific items in dispute. Additionally, you are hereby informed that if a request for a hearing is made, the request or petition must be received within twenty-one (21) days of your receipt of this letter, and that failure to timely request a hearing shall be deemed a waiver of your right to a hearing. Please address all petitions for a hearing and/or questions to 2727 Mahan Drive, Mail Stop 21, Tallahassee, FL. 32308. Sincerely, Many h. Leioact- Mary A. Stewart Administrator of Audit Services Medicaid Program Analysis (850) 487-1240 Attachment(s): cc: INTEGRATED HEALTH SERVICES ATTN: CAROL DISBRO 910 RIDGEBROOK ROAD Visit AHCA Online at 2727 Mahan Drive e Mail Stop 21 www.fdhe.state fl.us Tallahassee, FL 32308 mee To mmm rate ee On em I lic Al A A i and re cece HORIZON SPECIALTY & REHABILITATION CENTER MEDICAID AUDIT REPORT YEAR ENDED JANUARY 31, 1999 re RAR Te peloitte & Touche LLP Certified Public Accountants Suite 1800 of 200 South Orange Avenue { Orlando, Florida 32801 Tel: (407) 246 8200 Fax: (407) 422 0936 Feclao7 4720936 Deloitte &Touche | INDEPENDENT ACCOUNTANTS’ REPORT Secretary Agency for Health Care Administration We have examined the amounts and statistical data in the accompanying schedules, as listed in the Table of Contents, which were derived from the Cost Report for Florida Medicaid Program Nursing Home Service Providers (cost report) of Horizon Specialty & Rehabilitation Center, for the year ended January 31, 1999. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included such procedures as we considered necessary in the circumstances. _ Attachment A to this report includes adjustments which, in our opinion, should be recorded in order for the data, as reported, in the accompanying schedules for the year ended January 31, 1999, to be presented in conformity with federal and state Medicaid reimbursement principles as described in Note 1. To quantify the effect of the required adjustments, we have applied the adjustments as described in Attachment A to the amounts and statistical data, as reported, in the accompanying schedules. In our opinion, except for the effects of not recording adjustments for the matters referred to in the preceding paragraph, the amounts and statistical data derived from the cost report of Horizon Specialty & Rehabilitation Center, for the year ended January 31, 1999, are presented, in all material respects, in conformity with federal and state Medicaid reimbursement principles as described in Note 1. This report is intended solely for the information and use of the State of Florida’s Agency for Health Care Administration and management of Horizon Specialty & Rehabilitation Center, in connection with the cost report of Horizon Specialty & Rehabilitation Center, for the year ended January 31, 1999. DaQertte i Touche LLP November 20, 2000 Deloitte Touche Tohmatsu OT REN Re me ager CRETE TO RP ORR ee gm eR coe meee eT RET Tremere: HORIZON SPECIALTY & REHABILITATION CENTER SCHEDULE OF COSTS YEAR ENDED JANUARY 37, 1999 Cost Center Totals Costs to be allocated: Plant operation Housekeeping Administration Owner's administrative compensation Allowable ancillary cost centers: Physical therapy Speech therapy Occupational therapy Respiratory therapy Medical supplies Other Patient care costs: Nursing Dietary Oxygen Other Laundry and linen costs Property costs: Depreciation Interest on property - Rent on property Insurance on property Taxes on property Nonailowable ancillary cost centers: Radiology Lab Pharmacy Other Other nonreimbursable cost centers: Beauty and barber Gift shop Clinic Other Total operating costs Medicaid bad debts Total costs : As Reported $ = 252,725 152.363 405.088 1,255,657 696,943 181,451 348.077 78,402 207,102 1,511,975 2,481,367 516,172 177,210 3,174,749 101.303 200,772 696,176 84.939 76,645 1,058,532 72,896 7,467 503,392 76,645 5,048 5,048 8,096,107 $_8,096.107 1.255.657 1,660.745 Increase (Decrease) 2.702 (1.354) 1,348 (23.197) (23.197) (21.849) (52) (15) (180) 197,511 (22.393) (175.118) (247) (27.289) (3.181) (1.795) (32.265) (783) $ (111.276) 2.078 (109,198) (453,053) (453,053) (617,395) (617,395) The accompanying notes are an integral part of this schedule. ta As Adjusted $ 255.427 151,009 406.436 1.232.460 1.232.460 1,638.896 696.891 175.415 3.142.484 100.520 200,772 584.900 87.017 76.645 949.334 72,896 7,467 $0,339 130,702 5.048 5,048 7,478,712 $ 7,478,712 NHO00-157R 21119-2 SERRE ree ae re perme + a CTE rrp ogee OE oe re Sa HORIZON SPECIALTY & REHABILITATION CENTER SCHEDULE OF CHARGES YEAR ENDED JANUARY 31, 1999 As Increase Reported (Decrease) Usual and customary daily rate $ 361.58 $ - Patient Charges: Medicaid: Ancillary cost centers: Physical therapy $ 24,760 $ - Speech therapy 11,880 Occupational therapy 2,640 Respiratory therapy : 12.421 Medical supplies 29,390 (4,526) Other 20.146 (7.895) Room and board 3.530.375 Totals 3.619.191 Medicare: Ancillary cost centers: Physical therapy 1,281,962 Speech therapy 422.889 Occupational therapy . : 644,680 Respiratory therapy 545,827 Medical supplies 24,504 (7,231) Other 550.607 (538,596) Room and board 1,734,701 Totals 4,659,343 Private and other: Ancillary cost centers: .Physical therapy 514,528 Speech therapy 85,490 Occupational therapy 198,704 Respiratory therapy 70,844 Medical supplies 27,063 (13,105) Other 72.644 (57,739) Room and board 1,779,402 Totals 2,677,831 Total charges $ 10,956,365 $ -. — es Sees The accompanying notes are an integral part of this schedule. Ley) As Adjusted $ 361.58 $ 24.760 11.880 2.640 12.421 24.864 12.251 3.530.375 3.619.191 1,281,962 422.889 644.680 545,827 17.273 12.011 1,734,701 4.659.343 514,528 85,490 198,704 70,844 13,958 14.905 1,779,402 2,677,831 $ 10,956,365 SS NHO00-157R 21119-2 nore SPR PRR ger ne eee ar 7 ROR COR Ir TE COPS ESU REISE EE FRET PMR TE = CAREER NO RRR TE Re TREE Sor ROT I EO ORE ERR TT oe é HORIZON SPECIALTY & REHABILITATION CENTER SCHEDULE OF STATISTICS AND EQUITY CAPITAL YEAR ENDED JANUARY 31, 1999 As Increase Statistics: Reported (Decrease) Number of beds 120 : Patient days: Medicaid 25.508 : Medicare 6.047 Private and other 7.406 Total patient days 38.961 : Percent Medicaid 65.47 % : Facility square footage: Allowable ancillary cost centers: Physical therapy 1,808 : Speech therapy 192 Occupational therapy 305 Respiratory therapy Medical supplies 338 Other 254 Patient care 22,347 Laundry and linen 1,046 Radiology Lab. Pharmacy Other Beauty and barber 158 Gift shop Clinic Other - nonreimbursable Total facility square footage 26,448 - Equity Capital: Ending equity capital $ (8,367,518) $ - Average equity capital $ 288,690 $ (143,680) Annual rate of retum 6.594 % : Return on equity before apportionment $ 19,036 $ (9,474) __- Type of ownership: Corporation Date cost report accepted: August 5, 1999 The accompanying notes are an integral part of this schedule. As Adjusted 158 26.448 $ (8.367.518) $_14so19 6.594 % $ 9,562 NH00-157R 21119-2 Std secede aidal..cddiia a eee HORIZON SPECIALTY & REHABILITATION CENTER SCHEDULE OF ALLOWABLE MEDICAID COSTS YEAR ENDED JANUARY 31, 1999 Total Costs: - Allocations & Costs As Apportionment Reimbursement Class Adjusted (Note 2) Operating $ 1,739,416 $ (872.151) Patient care 4,654,212 (2.543.314) Property 949,334 (327.704) Nonreimbursable 135.750 3.743.169 Totals (Page 2) 7,478,712 Return on equity (Page 4) 9.562 (4.882) Non-Medicaid 4.882 Totals $ 7.488.274 $ : Allowable Medicaid Costs: Increase As (Decrease) Reimbursement Class Reported (Note 1) - Operating $ 831.308 $ 35.957 Patient care 2.128.298 (17,400) Property * 693.052 (71.422) Return.on equity 8.588 (3.908) Totals $ 3.661.246 $ (56.773) Allowable Medicaid Per Diem Costs: Increase As (Decrease) Reimbursement Class Reported (Note 1) Operating $ 32.59 $ 1.41 Patient care . 83.44 (.69) Property (not applicable if reimbursed on FRVS) 27.17 (2.80) Return on equity 34 (.16) Initial Medicaid per diem (Note 3) $ 143.54 $ (2.24) The accompanying notes are an integral part of this schedule. Un Costs After Allocations & Apportionment $ 867.265 2.110.898 * 621.630 3.878.919 $ $ $ $ $ TAT8.712 4,680 4.882 7.488.274 As Adjusted 867,265 2,110,898 621.630 4,680 3,604,473 As Adjusted 34.00 82.75 24,37 18 141.30 NH00-157R 21119-2 omer opps cnrgerersr i Sage capemes oer eee re + CORR Ope re ep ce eet od SOPRA Teer rome eree = cererarrm = dik ee HORIZON SPECIALTY & REHABILITATION CENTER SCHEDULE OF FAIR RENTAL VALUE SYSTEM DATA ! YEAR ENDED JANUARY 31, 1999 As Reported Capital Additions and Improvements: Acquisition costs: 01/01/98 - 04/15/98 $ 10,679 04/16/98 - 10/15/98 10/16/98 - 01/31/99 14,008 Totals $ 24.687 Original loan amount $ - ee Retirements $ - Capital Replacements: Acquisition costs 01/01/98 - 01/31/99 $ 4.073 Original Joan amount $ - ——— Pass-through Costs (Note 4): Acquisitions: 01/01/98 - 01/31/99 Depreciation $ 256 Interest Prior to 01/01/98 Depreciation 353 Interest Totals $ 609 Equity in Capital Assets: Ending equity in capital assets $ 955,134 Average equity in capital assets $ 3.023.169 Annual rate of return 6.594 % —— Return on equity in capital assets before apportionment $ 13,982 —— Return on equity in capital assets apportioned to Medicaid $ 6,308 —— Mortgage Interest Rate: 04/15/98 11.05 % 10/15/98 11.05 % Increase (Decrease) $ (2.114) $ (2.114) $ 140 $ 140 $ 185,366 $ 89,646 Fixed Fixed The accompanying notes are an integral part of this schedule. As Adjusted $ 8.565 14.008 $ 22.573 $ - $ - $ 6.187 $ - $ 396 353 $ 749 $ 955.134 =e $ 3.023.171 6.594 % $ 199.348 $ 95,954 NHO00-157R 21119-2 SCORE ORR FR re o ReRRecneRERE rer A . opr CR reer y= pee ear ae ee cate ere SRR res Pre eeeenr a a ? HORIZON SPECIALTY & REHABILITATION CENTER NOTES TO SCHEDULES YEAR ENDED JANUARY 31, 1999 Note 1 - Basis of Presentation The schedules, which were derived from the Cost Report for Florida Medicaid Program Nursing Home Service Providers (cost report) for the current period, have been prepared in conformity with federal and state Medicaid reimbursement principles as specified in the State of Florida Medicaid Program as defined by applicable cost and reimbursement principles, policies and regulations per Medicare principles of reimbursement as interpreted by the Provider Reimbursement Manual (HCFA-Pub. 15-1), Florida Title XIX Long-Term Care Reimbursement Plan, and the State of Florida’s Audit Services Medicaid Procedures Manual. The balances in the “As Reported” columns of the schedules are the assertions and responsibility of the management of the nursing home. The balances in the “As Adjusted” columns are the result of applying the adjustments reflected in the “Increase/Decrease” columns to the balances in the “As Reported” columns. Note 2 - Allocations and Apportionment Schedules G, G-1 and H of the cost report allocate allowable administration, plant operation and housekeeping costs to allowable and nonallowable ancillary, patient care, laundry and linen and nonreimbursable cost centers based on predetermined statistical bases, such as square footage or total costs, as explained in the cost report. These schedules then apportion allowable costs after allocations to the - Medicaid program based on other statistical bases, such as patient days or ancillary charges, as explained in the cost report. The net effect of such allocations and apportionment on each reimbursement class is presented in the schedule of allowable Medicaid costs. Note 3 - Initial Medicaid Per Diem Medicaid per diem costs for property and return on equity have been calculated under the provisions of the Florida Title XIX Long-Term Care Reimbursement Plan, excluding fair rental value provisions. The effect, if any, of the fair rental value system, will be determined during the rate setting process, and where applicable, prospective rates will be calculated by applying inflation factors, incentives, low utilization penalties and reimbursement ceilings. Note 4 - Capital Replacement Pass-through Costs Capital replacement pass-through costs in the form of depreciation and interest are presented without regard to the number of years remaining, if any, to full fair rental value system phase-in. Accordingly, pass-through reimbursement will be calculated based on amounts equal to or less than fifty percent of the costs presented herein as capital replacement pass-through costs. Once full fair rental value system phase-in has occurred, no capital replacement costs are allowed to be passed-through. NH00-157R 21119-2 rer Tom enna = ORR CI REREE ERE rT ene SAM ht tdci ll OE ORR RET Ere oe fa HORIZON SPECIALTY & REHABILITATION CENTER ATTACHMENT A - AUDIT ADJUSTMENTS YEAR ENDED JANUARY 31, 1999 Account Classification Number Comment Adjustments to Costs (Page 2) Plant operations: Lo Infectious waste disposal 1006502500 To reclassify cost to the proper cost 2. Worker’s compensation Housekeeping: 3. Worker’s compensation Administration: 4, Worker’s compensation 5. Public liability insurance 5306653000 Allowable ancillary cost centers: 6. Oxygen and inhalation therapy Oxygen and inhalation therapy 7. IV therapy IV therapy 8. Worker’s compensation - physical therapy speech therapy . occupational therapy center. (Section 2302.8, HIM-15) To. disallow unsupported costs. (Section 2304, HIM-15) To disallow unsupported costs. (Section 2304, HIM-15) To disallow unsupported costs. (Section 2304, HIM-15) To disallow unsupported costs. (Sections 2150.3 and 2304, HIM-15) To reclassify allowable ancillary oxygen and inhalation therapy to the proper cost center for proper apportionment. (Sections 2203 and 2302.8, HIM-15) To reclassify cost to the proper cost center. (Section 2302.8, HIM-15) To disallow unsupported costs. (Section 2304, HIM-15) Increase (Decrease) $ 3,267 (1,354) (3,455) (19,742) 23,197) (197,511) 197,511 (22,393) 22,393 (52) (15) (180) (247) NHO00-157R 21119-2 rma rare serrem CR mee UCU ETE RETIRES REET CARNE ETT TEE RR IERIE oe IRE one att aad a 9 HORIZON SPECIALTY & REHABILITATION CENTER ATTACHMENT A - AUDIT ADJUSTMENTS YEAR ENDED JANUARY 31, 1999 Account _Increase Classification Number Comment (Decrease) Adjustments to Costs (Page 2 Patient care costs: 9. Infectious waste disposal 1006502500 To reclassify cost to the proper cost . center. (Section 2302.8, HIM-15) $ (3,267) 10. | Worker’s compensation - To disallow unsupported costs. nursing — (Section 2304, HIM-15) (24,022) dietary — (3,181) other patient care = (1,795) , : (32.265) Laundry and linen costs: 11. Worker’s compensation sone To disallow unsupported costs. (Section 2304, HIM-15) (783) ‘Property costs: 12. Interest expense 5307000000 To disallow intercompany interest. (Sections 218 and 218.1, HIM-15) (111,276) 13. ‘Insurance - To allow costs which are supported property and other 5306652000 and related to patient care. (Section 2102.2, HIM-15) 2,078 (109,198) Nonallowable ancillary cost centers: 14, Prescription drugs 2505133000 To allow 10% of pharmacy costs for (162,758) Prescription drugs 3005133000 proper allocation of costs. (Section (290,295) 2328, and per AHCA memo) (453,053) Net Adjustments to Costs $_. (617,395) Adjustments Affecting Ending Equity Capital (Page 4) None Adjustments Affecting Statistics (Page 4) None NHO00-157R 21119-2 SEE ORR ee ONES OR emer RRR RRR RRR Fe Ee a oT nek, n . py HORIZON SPECIALTY & REHABILITATION CENTER ATTACHMENT A - AUDIT ADJUSTMENTS YEAR ENDED JANUARY 31, 1999 The following adjustments reported in the schedule of fair rental value system data are in accordance with the fair rental value system provisions of the Florida Title XIX Long-Term Care Reimbursement Plan and, where appropriate, the applicable sections of Chapters 100, Depreciation, and 2300, Adequate Cost Data and Cost Finding, of the Provider Reimbursement Manual (HIM-15). The provider has been furnished with schedules developed during the course of the audit which detail allowable components of the fair rental value system. Fair Rental Value System Data Increase Classification (Decrease) Capital Additions and Improvements: : 1. Acquisition costs $ Qu1 14) 2. Retirements $ - Capital Replacements: 3. Acquisition costs S$ 2 14 4. Pass-through costs $ 140 Equity in Capital Assets: 5. Ending equity $ - 6. Average equity $ 2 7. Return on equity before apportionment $ 185,366 8. Return on equity apportioned to Medicaid $ 89,646 NH00-157R 21119-2 <0 7 FS RE RR OE Te RT ORR TE RN RR: NR RRR RT RR eA i Ae i he

Docket for Case No: 01-003608