vs. ) Case No. 86-4068
Respondent. )
Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 18, 1987, in Tallahassee, Florida.
For Respondent: John R. Perry, Esquire
On August 8, 1986, the Administrator of the Petitioner, the Franklin County Visiting Nurse Association, Inc., filed an application with the Respondent, the Department of Health and Rehabilitative Services, for renewal of the Petitioner's license to operate a home health agency. The Respondent rejected the application by letter dated September 2, 1987. The Petitioner timely requested an administrative hearing to contest the denial of its application.
At the final hearing, the Petitioner presented the testimony of Denise L. Putnal, Herbert Kraft and Virginia H. Schorger. The Petitioner presented one exhibit which was marked as Petitioner's exhibit 1 and accepted into evidence.
The Respondent presented the testimony of Joyce Farr, Marilyn Nevado and Arthur George Harberts. The testimony of Ms. Nevado and Mr. Harberts was taken by telephone.
The parties also presented a composite exhibit which was marked as Composite exhibit 1 and accepted into evidence.
The parties have filed a Prehearing Stipulation in which certain facts have been admitted. Those admitted facts have been included in the Findings of Fact portion of this Recommended Order.
Prior to and during the final hearing the Department of Health and Rehabilitative Services was incorrectly treated as the petitioner in this case and the Franklin County Visiting Nurse Association, Inc., was treated as the Respondent. The style of this case has been corrected and the parties have been properly designated in this Recommended Order, sua sponte.
The parties have timely filed proposed recommended orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto. In the Appendix it has been indicated where proposed findings of fact which have been accepted have been made in this Recommended Order and why proposed findings of fact which have not been accepted have been rejected.
Whether the Respondent's rejection of the Petitioner's Application for Licensure dated August 8, 1986, was proper?
The Petitioner was issued a license dated July 1, 1985 (hereinafter referred to as the "License"), to operate a home health agency in Franklin County, Florida.
On the face of the License it was indicated that the "Expiration Date" of the License was June 30, 1986.
By letter dated April 2, 1986, the Respondent notified the Petitioner that its License would expire on June 30, 1986. The Petitioner was also informed that if an application for renewal of the License was not filed on or before May 2, 1986, the Petitioner would be subject to an administrative fine. An application to be used to renew the License was also sent with the letter.
In April or May of 1986, the Petitioner filed for Chapter 11 bankruptcy. On May 8, 1986, the United States District Court for the Northern District of Florida, Tallahassee Division, entered an order pursuant to 11
U.S.C. s. 362, which, among other things, stayed the commencement or continuation of any legal proceedings against the Petitioner.
The Petitioner began discussions with Charles Hecht, Jim Palmer and a group called the Well Springs group about the possibility of selling the Petitioner. The Well Springs group was represented by John Branch and Ann Morgan.
On June 16, 1986, Marilyn Nevado of the Respondent's Jacksonville Office of Licensure and Certification called the Petitioner's office. Ms. Nevado talked with Denise Putnal, the secretary and bookkeeper of the Petitioner.
Ms. Nevado called to remind the Petitioner that its License was going to expire on June 30, 1986, and to ask why no application to renew the License had been filed. Ms. Putnal explained to Ms. Nevado that the Petitioner was involved in a bankruptcy proceeding.
Virginia Schorger, the Administrator of the Petitioner, asked Ms. Putnal to call the Respondent on June 16, 1987, and find out what the Petitioner should do about its License.
Ms. Putnal called the Respondent's Jacksonville office. She spoke with a woman, whose name she could not recall, and was told by the woman that she would have someone who could answer Ms. Putnal's questions call Ms. Putnal.
Later that day, Arthur Harberts called the Petitioner and spoke with Ms. Putnal. According to a memorandum from Mrs. Putnal dated July 23, 1986, Ms. Putnal told Mr. Harberts the following:
I explained in detail to the man that our agency had filed bankruptcy and was in the process of being sold to either of two bidders with this decision being made by the Federal Bankruptcy Court.
Mr. Harberts told Ms. Putnal the following:
He told me that FCVNA [the Petitioner] should not renew the license in that name. He said to have the agency write a letter to Mr. John Adams' office detailing all of what I had explained to him via telephone. With this letter he requested the agency send a copy of our current license. He also explained that the new owner would have to obtain a license in the new agency name. . . .
Mr. Harberts had been told that the sale of the Petitioner was to take place before June 30, 1986.
Ms. Putnal reported her conversation with Mr. Harberts to Ms. Schorger and made a copy of the License.
The Petitioner did not send a letter with a copy of the License to the Respondent as suggested by Mr. Harberts.
As of July 1, 1986, no application to renew the License was filed by the Petitioner.
On June 30, 1986, the Petitioner's License expired by operation of
law.
On July 17, 1986, a sale of the Petitioner to the Well Springs group
was approved by the bankruptcy court.
On July 23, 1986, Ms. Schorger was informed by Ms. Morgan that she had been told that the License had expired.
Upon learning that the License had expired, Ms. Schorger sent a letter dated July 23, 1986 to Amy Jones, Director of the Office of Licensure and Certification of the Respondent. In part, Ms. Schorger indicated the following in her letter:
Early in June our Secretary/Bookkeeper called your office to inform you of our bankruptcy with reorganization plans and to ask about renewing the license.
She was told that as soon as the court decided who the new owner would be to send a copy of the present license and the name of the new owner.
Ms. Schorger also had Ms. Putnal write a memorandum memorializing her telephone conversation of June 16, 1986, with Mr. Harberts. Ms. Putnal completed the memorandum on July 23, 1986. A copy of this memorandum was sent with the July 23, 1986 letter.
A check for $500.00 was also included with the July 23, 1986, letter.
After July 23, 1986, Ms. Schorger had several telephone conversations with Ms. Jones.
In a letter dated August 5, 1986, Ms. Jones recommended that the "new owner" of the Petitioner apply for a new license as an "uncertified" home health agency. This action was suggested so that the Petitioner could continue to operate. Ms. Jones told the Petitioner that the Petitioner would not, however, be entitled to bill Medicaid/Medicare and, therefore, it was also recommended that the new owner apply for a certificate of need. Once the certificate of need was approved, it was recommended that an application be filed for a license as a "certified" home health agency. In the interim, Ms. Jones recommended that the Petitioner contact other certified home health agencies "in an effort to see if you can solicit their assistance in serving the Medicaid/Medicare clients in your area."
On or about August 8, 1986, Ms. Schorger filed an Application for Licensure as a home health agency. Under Section I.D. of the application Ms. Schorger indicated that the application was for a license as a "certified agency" and not a "non-certified agency" as Mr. Jones had suggested. The check for $500.00 previously sent to the Respondent on July 23, 1986 and subsequently returned to the Petitioner was also included with the application.
By letter dated September 2, 1966, the Respondent informed the Petitioner that the Application for Licensure submitted on August 8, 1986, for a license as a certified agency was denied.
The Petitioner was aware that its License would expire on June 30, 1986. The evidence failed to prove that the Petitioner was told that the expiration date of the Petitioner's License would be extended or waived, that failure to file an application for renewal of the License would be excused or that the date for filing an application for renewal would be extended.
The Petitioner did not hold a certificate of need for a home health agency at the time its Application for Licensure was filed on August 8, 1986.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, this proceeding. Section 120.57(1), Florida Statutes (1986 Supp.).
Section 400.462(2), Florida Statutes (1985), defines a "home health agency" as follows:
"home health agency," hereinafter referred to as "agency," means any public agency or private organization, or a subdivision of
such agency or organization, whether operated for profit or not, which provides home health services and which is certified or seeks certification as a Medicare home health service provider, expect as provided in s.
400.505.
Section 400.505, Florida Statutes (1985), is not applicable to this case.
All home health agencies must be licensed by the Respondent. Section 400.464, Florida Statutes (1985). A home health agency seeking to be licensed by the Respondent must file an application for a license and the appropriate license fee of Section 400.467, Florida Statutes (1985), with the Respondent. Section 400.471, Florida Statutes (1985). The applicant must also file "satisfactory proof that the agency is in compliance with this act and any rules and minimum standards promulgated hereunder . . . . Finally, Section 400.471(3), Florida Statutes (1985), provides that the "department shall not issue a license to a home health agency which fails to receive a certificate of need under the provisions of ss. 381.493-381.497."
Once a license has been issued, Section 400.477(1), Florida Statutes (1985), governs the expiration and renewal of the license and conditional licenses:
(1)(a) Licenses issued for the operation of an agency, unless sooner suspended or revoked, shall expire 1 year from the date of issuance. Sixty days prior to the expiration date, an application for renewal shall be submitted to the department on forms furnished by the department, and licenses shall be renewed if the applicant has first met the requirements established under this act and all rules promulgated hereunder. The agency shall file with the application satisfactory proof that the agency is in compliance with this act and all rules and minimum standards promulgated hereunder and satisfactory proof of financial ability to operate and conduct the agency in accordance with the requirements of this act.
(b) Any agency having a license on October 1, 1983, may not be denied a renewal of such license on the basis of not being certified as a Medicare home health service provider. [Emphasis added].
Pursuant to Section 400.477(1)(a), Florida Statutes (1985), a license expires by operation of law 1 year from the date of its issuance. If a license expires the home health agency ceases to be a certified home health agency upon the expiration of the license.
In this case the Petitioner was a home health agency as defined by Section 400.462(2), Florida Statutes (1985). The Petitioner was certified as a Medicare home health service provider and had obtained a license pursuant to Section 400.464, Florida Statutes (1985). The Petitioner's License, which was issued effective July 1, 1985, was due to expire by operation of law on June 30, 1986, pursuant to Section 400.477(1)(a), Florida Statutes (1985). The Petitioner failed to file an application for renewal of its License as required by Section 400.477(1)(a), Florida Statutes (1985). Therefore, pursuant to Section 400.477(1)(a), the Petitioner's License expired as of June 30, 1986. Upon the expiration of the License, the Petitioner became a non-certified, unlicensed home health agency.
In a letter dated August 5, 1986, the Respondent informed the Petitioner of the options available to the Petitioner to obtain authority to continue operating after the expiration of its License. The Petitioner was told the following:
In order for the Petitioner to serve Medicare and Medicaid patients, the Petitioner would have to apply for a certificate of need as a home health agency. After obtaining a certificate of need, the Petitioner could
file an application for a license as a certified home health agency.
In the interim, the Petitioner could file an application for a license as an uncertified home health agency. The Petitioner could continue to operate with such a license but would not be eligible for Medicare and Medicaid patient reimbursement.
The Petitioner could contact other certified home health agencies to arrange for care to Medicare and Medicaid patients until the Petitioner received a license as a certified home health agency. In light of the fact that a sale of the Petitioner had been approved, the Respondent suggested
that the new owner file the necessary applications.
The Petitioner did not follow these instructions of the Respondent. Instead of applying for a certificate of need as a home health agency and filing an application for a license as an uncertified home health agency, the Petitioner filed an application dated August 8, 1986, for a license as a certified home health agency. Line I.D. of the Application for Licensure filed by the Petitioner provides a box next to "certified agency" and a box next to
"non-certified agency" for an applicant to select. The application dated August 8, 1986, filed by the Petitioner included a check-mark in the box next to "certified agency."
By letter dated September 2, 1986, the Respondent informed the Petitioner that the Application for Licensure was denied. It is this denial that the Petitioner has challenged in this proceeding. As discussed, supra, once the Petitioner's License expired it no longer constituted a certified home health agency. Therefore, it could not obtain a license as a certified home health agency without first obtaining a certificate of need, which the Petitioner did not do. The Petitioner has not disputed these conclusions of law. Instead, the Petitioner has argued that it should not be treated as having lost its License because of its failure to file an application to renew its License before June 30, 1986. This argument is without merit.
The Petitioner was aware that its License was due to expire on June 30, 1986. The expiration date was clearly displayed on the License and the Respondent sent a letter to the Petitioner dated April 2, 1986, reminding the Petitioner that the License was due to expire. Additionally, the Petitioner was told during a telephone call from the Respondent to the Petitioner on June 16, 1986, that the License was due to expire on June 30, 1986. Despite these facts, the Petitioner has argued that the Respondent did not "provide correct or sufficient information and instructions to FCVNA [the Petitioner] to enable them to make an orderly transition of patients under their care, re-licensing and the transfer of the CON." Petitioner's Proposed Recommended Order, page 4.
The Petitioner's position with regard to the action of the Respondent is without merit. The law clearly provides that licenses to operate as a home health agency are valid for one year from the date they are issued. It is the Petitioner's responsibility to be aware of the requirements of the law and, therefore, the Respondent was under no duty to inform the Petitioner that its License would expire on June 30, 1986.
More importantly, the evidence in this case indicates that the Respondent did in fact tell the Petitioner that the License would expire on June 30, 1986 on three occasions. The evidence also proved that the Petitioner knew that the License was due to expire. Despite these facts, the Petitioner did not file an application to renew the License.
The evidence also failed to prove that the doctrine of equitable estoppel applies in this case. In order to conclude that the Respondent is equitably estopped from refusing to renew the Petitioner's License, it would have to be concluded that the following circumstances exist:
There has been a representation by the Respondent of a material fact that is contrary to a later asserted position;
The Petitioner relied upon that representation; and
The Respondent changed its position detrimentally to the Petitioner. See Department of Revenue v. Anderson,
403 So.2d 397 (Fla. 1981); and Kuge v. Department of Administration,
449 So.2d 389 (Fla. 3rd DCA 1984). In order for the doctrine of equitable estoppel to apply in this case, it would be necessary to find
that the Respondent told the Petitioner that the Petitioner did not have to renew the License by June 30, 1986, that the Petitioner relied upon such a representation and did not renew its License and that the Respondent then changed its position and took the position that
the License expired on June 30, 1986. The facts in this case fail to prove that any of the circumstances required to conclude that the doctrine of equitable estoppel applies exists.
First, the evidence failed to prove that the Respondent informed the Petitioner that the Petitioner did not have to renew its License before it expired on June 30, 1986. In fact, the Petitioner was well aware of the expiration date and was reminded on two occasions that the License was due to expire on June 30, 1986. Despite the Petitioner's knowledge of the expiration date of the License and the reminders from the Respondent, the Petitioner took no action to insure that the License was renewed before the expiration date.
Secondly, the evidence failed to prove that the Respondent changed its position with regard to the expiration date of the License to the detriment of the Petitioner. The Respondent consistently reminded the Petitioner that its License was due to expire on June 30, 1986.
Finally, the Petitioner did not rely upon any representation of the Respondent which was later changed by the Respondent. In fact, the Petitioner ignored the consistent and legally correct representations of the Respondent that the License was due to expire on June 30, 1986.
At most the Petitioner was confused about how to proceed in order to transfer its License to a purchaser of the Petitioner. The confusion might have been avoided had the Petitioner's administrator, Ms. Schorger, contacted the Respondent instead of having the bookkeeper/secretary, Ms. Putnal, discuss the problem with the Respondent. Ms. Schorger did not, however, discuss the transfer with the Respondent until after the License had expired.
Even though Ms. Schorger did not discuss the transfer of the License with the Respondent, the directions given to Ms. Putnal by the Respondent concerning the transfer of the License were correct. The Respondent correctly told Ms. Putnal that the transfer of the License would have to be requested by the purchaser of the Petitioner after the purchase took place. These instructions were based upon Mr. Harberts' understanding that the sale would take place before June 30, 1986. Even if the Respondent had considered the possibility that the sale would not take place before June 30, 1986, as in fact was the case, the Respondent was under no duty to tell the Petitioner something that the evidence proved the Petitioner was already aware of -- that the License would expire on June 30, 1986, if it was not renewed.
Despite the Petitioner's knowledge and the Respondent's reminders that the License was due to expire, the Petitioner took no action to renew the License until after June 30, 1986. Therefore, the License expired by operation of law as of June 30, 1986. After that date the Petitioner was no longer a certified home health agency.
When the Petitioner learned that its License had expired, Ms. Schorger sent a letter and a check for $500.00 to the Respondent. Even then Ms. Schorger did not file an application.
Based upon the foregoing, it is concluded that the Petitioner was not entitled to licensure as a certified home health agency and the Respondent's denial of the Petitioner's license application of August 8, 1986 was proper.
One final point needs to be addressed. During the final hearing testimony was given to the effect that an order of the bankruptcy court on May 8, 1986, in effect, extended the expiration date of the License for 60 days. Based upon a review of the bankruptcy law this testimony is rejected as contrary to federal bankruptcy law. Although certain actions are stayed during the pendency of bankruptcy actions, the expiration of a license by operation of law is not stayed. See Re Arminio, 38 BR 472 (BC DC Conn 1984); and Re Arnage, Inc., 33 BR 662 (BC ED Mich 1983).
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner's application for licensure as a certified
home health agency be denied.
DONE and ENTERED this 19th day of June, 1987, in Tallahassee, Florida.
LARRY J. SARTIN
Filed with the Clerk of the Division of Administrative Hearings this 19th day of June, 1987.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4068
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
Last paragraph Although not labelled as a finding of on page 1 fact, the last paragraph on page 1 of the Petitioner's proposed recommended
order contains certain allegations of fact which have been accepted in paragraph 23 of this Recommended Order. To the extent that this paragraph suggests that the Petitioner filed an application for a "Non- certified license" and to operate as a "non-certified home health agency", this proposed fact is rejected.
The evidence proved that the filed an application for a license as a certified home health agency.
Mr. Sam Power, Clerk Department of Health and
John R. Perry, Esquire
