STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. AHCA Case No. 2004010817 MAGNOLIA LTC INC., _ ; MAGNOLIA MANOR, [ So “| D9 Respondent. ADMINISTRATIVE COMPLAINT COMES NOW the AGENCY FOR HEALTH CARE ADMINISTRATION (“AHCA”), by and through the undersigned counsel, and files this Administrative Complaint against MAGNOLIA LTC INC., d/b/a MAGNOLIA MANOR (“Respondent”) pursuant to Sections 120.569 and 120.57, Florida Statutes (2004), and alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine in the amount of $1,000, and order to refund $59,400, for a total of $60,400, pursuant to the various citations, statutes, and rules cited in each of the two counts below. 2. In summary, Respondent was cited as follows: November 5, 2004 Assisted Living Facility financial monitoring visit. Respondent was cited for a Class II violation. Page | of 9 JURISDICTION AND VENUE JUN YS SS 3. This tribunal has jurisdiction over Respondent, pursuant to Sect ns, ; ¢ rs “ 120.569 and 120.57, Florida Statutes (2004). j 4. Venue shall be determined, pursuant to Chapter 28-106.207, Florida Administrative Code (2004). PARTIES 5. Pursuant to Chapter 400, Part II, Florida Statutes (2004), and Chapter 58A-5, Florida Administrative Code (2004), AHCA is the licensing and enforcing authority with regard to assisted living facility laws and rules. 6. Respondent is an assisted living facility located at 3339 Highway 17, Green Cove Springs, Florida 32043. Respondent is and was at all times material hereto a licensed facility under Chapter 400, Part Ill, Florida Statutes (2004), and Chapter 58A-5, Florida Administrative Code (2004), having been issued license number 10379. COUNT I (A 100) Respondent failed to maintain the facility on a sound financial basis, which threatens the residents’ health, safety and welfare. § 400.419(2)(b), Fla. Stat. (2004) § 400.4275, Fla. Stat. (2004) Fla. Admin. Code R. 58A-5.021(1) (2004) 7. AHCA re-alleges paragraphs 1-6 above. 8. On November 5, 2004, AHCA conducted an Assisted Living Facility financial monitoring visit at Respondent’s facility. AHCA cited Respondent for a violation, based on the following: a) Areview of the facility financial records on November 4" and 5", 2004, indicate: 1. No Worker’s Compensation Certificate exists for the facility. 2. A review of the Income/Expense statement reflects no lease or mortgage payments for the facility. 3. Payroll checks have been returned for insufficient funds. Page 2 of 9 4. The last two quarters of Unemployment Insurance for 2004 have not been paid. Payments for penalties and interest to the IRS are currently being made. An interview with the administrator and owner’s representative on November 4 and 5", 2004 confirmed the above facts. 7, The administrator stated that payroll has been paid late nine times since June of 2004. In addition, he noted that there were several outstanding bills owed by the facility that had not been paid. 8. The Owner’s Representative confirmed that Worker’s Compensation Insurance had not been purchased for the facility from the facility’s inception. 9. In interviews with four employees of the facility, all agreed that payroll checks had been late on numerous occasions. 10. Observations on 11-4-04 revealed the facility lacked an adequate supply of food to provide ongoing nutritional meals. Interviews with the Administrator confirmed that food deliveries were on a cash on delivery (COD) basis due to inconsistent payment to vendors. The interview also revealed that frequent trips to the local supermarket are necessary to make up for the inadequate food supply. 11. Observations in the facility on the afternoon of 11-4-04 revealed that internal temperatures in the common areas of the facility were uncomfortably high. Temperature readings ranged from 81°F to 85°F. Interview with the Administrator revealed that this was due to lack of maintenance to the air conditioning units and the owner’s refusal to complete repairs because of insufficient funds. nw These practices place all residents in the facility at risk for harm and may lead to the residents not receiving needed services that the facility agreed to provide. 9. Respondent failed to maintain the facility on a sound financial basis, which threatens the residents’ health, safety and welfare, as required by Section 400.4257, Florida Statutes, and Rule 58A-5.021(1), Florida Administrative Code, which provide, as follows: 400.4275 Business practice; personnel records; liability insurance.—The assisted living facility shal! be administered on a sound financial basis that is consistent with good business practices. (1) The administrator or owner of a facility shall maintain accurate business records that identify, summarize, and classify funds received and expenses disbursed and shall use written accounting procedures and a recognized accounting system. (2) The administrator or owner of a facility shall maintain personnel records for each staff member which contain, at a minimum, documentation of background screening, if applicable, documentation of compliance with all training requirements of this part or applicable rule, and a copy of all licenses or certification held by each staff who performs services for which licensure or certification is required under this part or rule. (3) The administrator or owner of a facility shall maintain liability insurance coverage that is in force at al! times. (4) The department may by rule clarify terms, establish requirements for financial records, accounting procedures, personnel procedures, insurance coverage, and reporting Page 3 of 9 procedures, and specify documentation as necessary to implement the requirements of this section.” “58 A-5,021 Fiscal Standards. (1) FINANCIAL STABILITY. The facility shall be administered on a sound financial basis in order to ensure adequate resources to meet resident needs. For the purposes of Section 400.447, F.S., evidence of financial instability includes filed bankruptcy by any owner; issuance of checks returned for insufficient funds; delinquent accounts; nonpayment of local, state, or federal taxes or fees; unpaid utility bills; tax or judgment liens against facility or owners property; failure to meet employee payroll; confirmed complaints to the agency or district long-term care ombudsman council regarding withholding of refunds or funds due residents; failure to maintain liability insurance due to non-payment of premiums; non-payment of rent or mortgage; non-payment for essential services; or adverse court action which could result in the closure or change in ownership or management of the ALF. When there is evidence of financial instability, the agency shall require the facility to submit the following documentation:” 10. The foregoing constitutes a Class II violation due to the nature of the violation and the gravity of its probable effect on the residents, to wit: “(b) Class "II" violations are those conditions or occurrences telated to the operation and maintenance of a facility or to the personal care of residents which the agency determines directly threaten the physical or emotional health, safety, or security of the facility residents, other than class I violations. The agency shall impose an administrative fine for a cited class II violation in an amount not less than $1,000 and not exceeding $5,000 for each violation. A fine shall be levied notwithstanding the correction of the violation.” § 400.419(2)(b), Fla. Stat. (2004) 11, | AHCA, in determining the penalty imposed, considered the gravity of the violation, the probability that death or serious harm will result, the actions of Respondent and its staff, the financial benefit to the facility of committing or continuing the violation, and the licensed capacity of the facility. WHEREFORE, AHCA demands the following relief: 1. Enter factual and legal findings as set forth in the allegations of this count; 2. Impose a fine in the amount of $1000 for the referenced violation; and 3. Impose such other relief as this tribunal may find appropriate. COUNT HI Respondent failed to provide a refund within 45 days of discharge of a resident. § 400.424(3)(a), Fla. Stat. (2004) Page 4 of 9 12. AHCA re-alleges paragraphs 1-6 above. 13... On November 5, 2004, AHCA conducted an Assisted Living Facility financial monitoring visit at Respondent’s facility. AHCA cited Respondent for a violation, based on the following: a) Resident record review revealed that Resident #3 died in August, 2004. The resident was formally discharged on September 1, 2004. The facility agreed that the facility has $19,800 that needs to be refunded to the appropriate people. The 45" day was on October 16, 2004. b) No refund has been made based on resident and facility financial information. c) This information was confirmed in an interview with the Owner’ Representative. The failure to provide refunds as required, places the potential for harm to the family of the resident or the next of kin. 14. Respondent failed to provide a refund within 45 days of discharge of a resident, as required by Section 400.424(3)(a), Florida Statutes (2004), which provides, as follows: “490.424 Contracts.— (3)(a) The contract shall include a refund policy to be implemented at the time of a resident's transfer, discharge, or death. The refund policy shall provide that the resident or responsible party is entitled to a prorated refund based on the daily rate for any unused portion of payment beyond the termination date after all charges, including the cost of damages to the residential unit resulting from circumstances other than normal use, have been paid to the licensee. For the purpose of this paragraph, the termination date shall be the date the unit is vacated by the resident and cleared of all personal belongings. If the amount of belongings does not preclude renting the unit, the facility may clear the unit and charge the resident or his or her estate for moving and storing the items at a rate equal to the actual cost to the facility, not to exceed 20 percent of the regular rate for the unit, provided that 14 days' advance written notification is given. If the resident's possessions are not claimed within 45 days after notification, the facility may dispose of them. The contract shall also specify any other conditions under which claims will be made against the refund due the resident. Except in the case of death or a discharge due to medical reasons, the refunds shall be computed in accordance with the notice of relocation requirements specified in the contract. However, a resident may not be required to provide the licensee with more than 30 days’ notice of termination. If after a contract is terminated, the facility intends to make a claim against a refund due the resident, the facility shall notify the resident or responsible party in writing of the claim and shall provide said party with a reasonable time period of no less than 14 calendar days to respond. The facility shall provide a refund to the resident or responsible party within 45 days after the transfer, discharge, or death of the resident. The agency shall impose a fine upon a facility that fails to comply with the refund provisions of the paragraph, which fine shall be equal to Page 5 of 9 three times the amount due to the resident. One-half of the fine shall be remitted to the resident or his or her estate, and the other half to the Health Care Trust Fund to be used for the purpose specified in s. 400.418.” [Emphasis added] 15. Pursuant to the statute, Repondent’s failure to refund the resident’s money within 45 days of death warrants the imposition of a fine equaling three times the amount due the resident, which is $59,400. WHEREFORE, AHCA demands the following relief: 1. Enter factual and legal findings as set forth in the allegations of this count; 2. Impose a fine in the amount of $59,400 (which is three times the refund due) pursuant to Section 400.424(3)(a), Florida Statutes (2004) which shall be divided one-half to Resident #3 and one-half to the Health Care Trust Fund; and 3. Impose such other relief as this tribunal may find appropriate. NOTICE Respondent, MAGNOLIA LTC INC., d/b/a MAGNOLIA MANOR, is 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, MSC 3, Tallahassee, Florida, 32308; Attention: Agency Clerk. Page 6 of 9 RESPONDENT IS FURTHER NOTIFIED, 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 on this p%vd_ day of febreasy 2005, Loti, 8. CAC att Timothy B. Hiliott, Senior Attomey Fla. Bar No. 210536 Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, MSC #3 Tallahassee, FL 32308 Phone: (850) 922-5873 Fax: (850) 921-0158 or 413-9313 CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original Administrative Complaint, Explanation of Rights form, and Election of Rights forms have been sent by US. Certified Mail, Return Receipt Requested (receipt# 7000 1530 0000 5684 9136) to Magnolia Manor, Attention: Administrator, 3339 Highway 17, Green Cove Springs, Florida 32043. Submitted on this_23e/ day of Fe . 2005. Ea a Me __—__ = po , Timothy B-£fliott, Senior Attorney Agency for Health Care Administration Page 7 of 9

Docket for Case No: 05-001925