STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, O4 . O4 Oey vs. Case No. 2008013532 MELWOOD NURSING CENTER, LLC d/b/a LIFE CARE CENTER OF MELBOURNE, Respondent. / ADMINISTRATIVE COMPLAINT - Petitioner, the Florida Agency for Health Care Administration (“AHCA”), through undersigned counsel, files this Administrative Complaint against the above-named Respondent (“Respondent”) pursuant to Sections 120.569 and 120.57, Florida Statutes (2007)*, and alleges: NATURE OF THE ACTION 1. This is an faction to impose an administrative fine in the amount of $2,367 (the “fine amount”) against Respondent, pursuant to Section 408.040, Florida Statutes, and Florida Administrative Code Rule 59C-1.021. 2. For the calendar year 2007 (the “calendar year”), Respondent failed to comply with the Medicaid condition upon Page 1 of 121 its Certificate of Need ("CON"), a copy of which is attached to this complaint as Exhibit A, JURISDICTION AND VENUE 3. This tribunal has jurisdiction over Respondent, pursuant to Sections 120.569 and 120.57, Florida Statutes, and also Sections 408.031- 408.045, Florida's “Health Facility and Services Development Act.” 4. Venue is determined by Florida Administrative Code Rule 28-106.207. PARTIES 5. Pursuant to Chapter 408, Florida Statutes, and Chapter 59C-1, Florida Administrative Code, AHCA is the licensing and enforcing authority with regard to community nursing home laws and rules. 6. Respondent is a corporation authorized under the laws o£ Florida to do business. Respondent operates a community nursing home located at E. Sheridan Road, Melbourne, Florida 32901 and is the licensee on the CON issued on October 20, 1987 for a minimum of 45% of the 120 bed facility’s total annual patient days shall be provided to Medicaid patients. The CON number is 3828; a copy of the CON is attached to this complaint as Exhibit A. lunless otherwise noted, all statutes and rules hereinafter cited are to the indicated year’s version of the statute or Page 2 of 11 COUNT I Respondent failed to meet its Medicaid condition Section 408.040, Florida Statutes Florida Administrative Code Rule 59C-1.021 7. AHCA re-alleges paragraphs 1-6 above. 8. Respondent failed to comply with its Medicaid condition as reported to the Agency in its Florida Nursing Home Utilization Report for the year 2007, a copy of which is attached to this complaint as Exhibit B. The facility responded to a request to provide a facility report, a copy of the report is attached to this complaint as Exhibit C. 9. Respondent failed to comply with the condition set forth in its CON, as required by Section 408.040, Florida Statutes, which provide, in part, as follows: 408.040 Conditions and monitoring (1) (a) The agency may issue a certificate of need, or an exemption, predicated upon statements of intent expressed by an applicant in the application for a certificate of need. Any conditions imposed on a certificate of need or an exemption based on such statements of intent shall be stated on the face of the certificate of need or in the exemption approval. (b) The agency may consider, in addition to the other eriteria specified in s. 408.035, a statement of intent by the applicant that a specified percentage of the annual patient days at the facility will be utilized by patients eligible for care under Title XIX of the Social Security Act. Any certificate of need issued to a nursing home in reliance upon an applicant's statements that a specified percentage of annual patient days will be utilized by residents eligible for care under Title XIX of the Social Security Act must include a statement that such certification is a condition of issuance of rule because this is the controlling year in question. Page 3 of 11 the certificate of need. The certificate-of-need program shall notify the Medicaid program office and the Department of Elderly Affairs when it imposes conditions as authorized in this paragraph in an area in which a community diversion pilot project is implemented. (c) A certificate holder or an exemption holder may apply to the agency for a modification of conditions imposed under paragraph (a) or paragraph (b). If the holder of a certificate of need or an exemption demonstrates good cause why the certificate or exemption should be modified, the agency shall reissue the certificate of need or exemption with such modifications as may be appropriate. The agency shall by rule define the factors constituting good cause for modification. (a) If the holder of a certificate of need or an exemption fails to comply with a condition upon which the issuance of the..certificate or exemption was predicated, the agency may assess an administrative fine against the certificate holder in an amount not to exceed $1,000 per failure per day. Failure to annually report compliance with any condition upon which the issuance of the certificate or exemption was predicated constitutes noncompliance. In assessing the penalty, the agency shall take into account as mitigation the. degree of noncompliance. Proceeds of such penalties shall be deposited in the Public Medicaid Assistance Trust Fund. k ek OF 10. The foregoing violation warrarits imposition of the above-mentioned fine amount pursuant to Florida Administrative Code Rule 59C-1.021, which provides, in part: 59C-1.021 Penalties. (1) General Provisions. The agency shall initiate administrative proceedings for revocation of a certificate of need for violation of paragraphs 408.040(2){a) and (b), F.S., or the assessment of administrative fines for failure to comply with conditions placed on a certificate of need as specified under Rule 59C-1.013, F.A.C x *k * (3) Penalties for Failure to Comply with Certificate of Need Conditions. The agency shall review the annual Page 4 of 11 compliance report submitted by the health care providers who are licensed and operate the facilities or services and other pertinent data to assess compliance with certificate of need conditions. Providers who are not in compliance with certificate of need conditions shall be fined. For community nursing homes or hospital-based skilled nursing units certified as such by Medicare, the first compliance report on the status of conditions must be submitted 30 calendar days following the eighteenth month of operation or the first month where 85 percent occupancy is achieved, whichever comes first. The schedule of fines is as follows: (a) Facilities failing to comply with any conditions set forth on the Certificate of Need will be assessed a fine, not to exceed $1,000 per failure per day. In assessing the penalty the agency shall take into account the degree of noncompliance. (ob) The assessed fine shall be paid to the agency within 45 calendar days after written notification of assessment by certified mail or within 30 calendar days after final agency action if an administrative hearing has been requested. If a health care provider desires it May remit payment according to a payment schedule accepted by the agency. The health care provider must — submit the schedule of payments to the agency within 30 calendar days after. the date of receipt of the notification of assessment or 21 calendar days after final agency action. The final balance will be due no later than 6 months after the health care provider has been notified in writing by the agency of the amount of the assessed fine or 6 months after final agency action, 11. AHCA, in determining the penalty imposed, considered the degree of noncompliance. WHEREFORE, AHCA requests the following relief: (1) enter factual and legal findings as set forth in this Count; (2) impose the above-mentioned fine amount for the violation; and (3) impose such other relief as this tribunal may find appropriate. NOTICE RESPONDENT is hereby notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Specific options for administrative action are set out in the attached Election of Rights (one page) and explained in the attached Explanation of Rights (one page). All requests for hearing shall be made to the Agency for Health Care Administration and delivered to the Agency for Health Care Administration, 2727 Mahan Dr., Bldg. 3, MS #3, Tallahassee, Florida, 32308; Attention: Agency Clerk. RESPONDENT IS FURTHER NOTIFIED THAT IF THE REQUEST FOR HEARING IS NOT RECEIVED BY THE AGENCY FOR HEALTH CARE ADMINISTRATION WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS ADMINISTRATIVE COMPLAINT, A FINAL ORDER WILL BE ENTERED. Submitted as of the date indicated on the below Certificate of Service. s H. Harris stant General Counsel Flav Bar No. 817775 Agency for Health Care Administration 525 Mirror Lake Drive, North Suite 330H St. Petersburg, Florida 33701 Phone: 727-552-1435 Pax; 727-552-1440 Page 6 of 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the original Administrative Complaint, Explanation of Rights form, and Election of Rights form have been sent: 1. by U.S. Certified Mail, Return Receipt Requested, Receipt #7007 0220 0001 1589 3409 to Life Care Center of Melbourne, Attention: Administrator, at 606 East Sheridan Road, Melbourne, Florida 32901; 2. by U.S. Certified Mail, Return Receipt Requested, Receipt #7007 0220 0001 1589 3416 to C.T. Corporation System, Registered Agent for Clay County Medical Investors, LLC, 1200 South Pine Island Road, Plantation, Florida 33324; and 3. by regular U.S. Mail to John F. Gilroy, III, P.A., 1435 East Piedmont Drive, Suite 215, Tallahassee, Florida 32308 on December {2e, 2008. oa our r mes H, Harris, Esq. gistant General Counsel Page 7 of 121 EXHIBITS (AHCA vy. Life Care Center of Melbourne Case No.2008013532) EXHIBIT “A” —__ Respondent’s CON # 3828, requiring a minimum of 45% of the 120 bed facility’s total annual patient days shall be provided to Medicaid patients. EXHIBIT “B” — Florida Nursing Home Utilization Report for Year 2007, page 98. EXHIBIT “C” — Respondent's facility report for calendar year 2007. (All are copies) Page 11 of 11 STATE OF FLORIDA ~ AGENCY FOR HEALTH CARE ADMINISTRATIO a CERTIFICATE OF NEED Under the provisions of the “Health Facility and Services Development Act” (Sections 408.031-.045, Florida Statutes (Supp 1992), AND Chapter 59C-1, Florida Administrative Code), the Agency for Health Care Administration certifies the need for this project. *Amended - Dates ***2 Amended Condition **Amended Ownership via 5896 *#***Condition Modified (2/26/99) ***Combination via 5994 NUMBER: 3828**** APPLICANT: : Holmes/VHA Long Term Care Joint Venture** PROJECT COST: $3,173,000 (A Florida General Partnership) : / «ISSUE DATE; - October 20, 1987* 5050 Poplar Avenue, 18" Floor TERMINATION DATE: October 19, 1988 Memphis, Tennessee 38157 REVISED TERMINATION DATE: COUNTY: Brevard DISTRICT: 7 SUBDISTRICT: PROJECT DESCRIPTION: Construction of 60 community nursing home beds under CON #3828 (as amended by CON #5896 which was a transfer of ownership) and combine with the 60-bed replacement facility of Holmes Regional Convalescent - Center for the construction of a 120-bed community nursing home to be licensed under one license. CONDITIONS: A minimum of'45%**** of total annual patient days shall be provided to Medicaid patients. New construction for the 60 beds under CON #3828 is 21,302 gross square feet. **#* FORM 1793, APRIL 1993 DISTRICT 7 NURSING HOME UTILIZATION (January 2007 - December 2007 Data) BED DAYS ANNUAL TOTALS QUARTERLY TOTALS 01/07-12/07 JANUARY 1, 2007 - DECEMBER 31, 2007 Licensed Beds JAN- APR- 6MO. JUL- OCT- BED PATIENT TOTAL M'CAID M'CAID ‘Fotal Comm. Shel.| MAR JUN TOTAL SEP DEC TOTAL] DAYS DAYS OCCUP DAYS OCCUP LD. Name of Facility Subdistrict 1 Brevard County 852 Anchor Care and Rehabilitation Center 1154 _ Atlantic Shores Nursing and Rehab Center 542 Avante at Melbourne, Inc. 396 Carnegie Gardens Nursing Center 1122 Consulate Health Care of Melbourne 857 Courtenay Springs Village 1027 Health Center of Merritt Island, The 352 Huntington Place Rehabilitation and Nursing Center . 1007 indian River Center 548 Island Health and Rehabilitation Center 1057 ~—_ Life Care Center of Melbourne 1281 Life Care Center of Palm Bay 987 Melbourne Terrace Rehabilitation Center 1227 Palms Rehabilitation and Healthcare Center, The 665 Rockledge Health and Rehabilitation Center 1097 Royal Oaks Nursing and Rehab Center 677 Titusville Rehabilitation & Nursing Center 896 Vista Manor 778 West Melbourne Health & Rehabilitation Center 1140 Wuesthoff Progressive Care Center 92.96% 43800 39232 89.57% 21200 54.04% 40150 35344 = 88.03% 23657 66.93% 50370 45107 89.55% 30958 68.63% 60955 55469 91.00% 24240 43.70% 35040 27472 78.40% 18990 69.12% 65700 58812 89.52% 27638 += 46.99% 36500 33409 91.53% 18008 53.90% 65335 62636 95.87% 45668 72.91% 43800 42860 95.57% 25486 60.88% 43800 39664 90.56% 15192 38.30% 31465 47482 92.26% 19774 41.65% 43800 39770 = 90.80% = 25487 64.09% 43800 42230 96.42% 27885 66.03% 39055 36648 = 93.84% 24301 66.31% 43800 39470 90.11% 17041 43.17%] 57305 46855 81.76% 34143 72.87% 43800 40555 92.59% 21949 = 54.12%] 65700 50830 77.37% 25478 50.12% 94.60% 34.35% Orange County 1264 Adventist Care Centers - Courtland, Inc. 544 Avante at Orlando, Inc. 835 Colonial Lakes Health Care 765 Commons at Orlando Lutheran Towers 1061 Conway Lakes Health & Rehabiltation Center 43800 41366 © 94.44% 18746 45.32%! 43070 41215 95.69% 25356 61.52% 65700 60285 91.76% 39031 64.74% 21900 22132 101.06% 10808 48.83%) 43800 38233 87.29% 22185 + 58.03%| EXHIBIT B 98 AHCA 04/04/08

Docket for Case No: 09-000102