The Issue Whether the Agency for Health Care Administration (AHCA) should award Life Care Centers of America, Inc., Certificate of Need 8069 which would authorize both the transfer of an existing certificate of need and the combination of the transferred certificate with another certificate of need. The combination would allow Life Care to operate a 130-bed nursing facility to be built on Cypress Boulevard in Winter Haven within 1000 feet of a nursing home owned and operated by Florida Convalescent Center, Inc., a site on which Life Care intends and is authorized to build a 57-bed facility regardless of the outcome of this case.
Findings Of Fact The Parties Life Care Life Care of America, Inc., is a privately held company, the largest privately held nursing home company in the nation. Founded by Forest Preston in 1975, it currently operates in 27 states, with approximately 170 facilities. A Tennessee corporation authorized to do business in Florida, Life Care owns and/or operates six nursing homes in the state. Whether CON 8069 is awarded or not, Life Care will add a seventh nursing home to its Florida operations: a newly built facility on Cypress Boulevard in Winter Haven, Polk County. If CON 8069 is granted, the facility will be authorized to house 130 beds; if not, then only 57 will be built, these under the authority of another CON, discussed below. FCC FCC began operation in Florida in the mid-1980's and currently operates 16 nursing home facilities in the state. Florida Convalescent Centers, Inc., d/b/a Palm Garden of Winter Haven, operates the 120-bed skilled nursing facility which recently opened a 35-bed addition during 1995 on Cypress Boulevard in Polk County. Licensed by the state, the facility is superior rated. Most significantly, the facility's Cypress Boulevard location is less than 1000 feet from the proposed site of the nursing home facility Life Care hopes to build and operate under the authority of CON 8069. 3. AHCA The Agency for Health Care Administration (the "agency" or "AHCA") is the "single state agency [designated by statute] to issue, revoke, or deny certificates of need ... in accordance with the district plans, the statewide health plan, and present and future federal and state statutes." Section 408.034(1), F.S. Background 1. CON 7138 On March 10, 1994, Life Care, as the result of a settlement with FCC whereby both parties were given beds from a 92-bed fixed need pool, was awarded CON 7138. Fifty-seven of the 92 beds were apportioned to Life Care. In issuing the certificate, the agency authorized Life Care to construct a "freestanding ... community nursing home consisting of 34,025 GSF and involving $2,308,512 in construction costs." The only condition that appears on the face of the CON is that, "[a] minimum of 74 percent of the total annual patient days of care for the 57 bed facility shall be allocated to Medicaid patients." Of course, the terms of the CON are not limited to just the conditions expressed on the face of the Certificate of Need, itself. Indeed, the Applicant explicitly recognized that it would be subject to many other terms when, in support of the application, it filed the Certification of the Applicant dated March 9, 1995. There, Life Care certified that "if issued a Certificate of Need as a result of [the] application, [it would be] bound by the representations in it." Life Care's Ex. No. 1, Certification of the Applicant, p. 3. Although Life Care originally proposed to locate the facility authorized by CON 7138 somewhere within a triangle bounded by Lakeland, Bartow and Winter Haven, no specific site was selected. More pertinently, no condition or term of the CON restricted the facility's site within the triangle. Despite the absence of any condition or term of the CON limiting the site within the proposed triangle in the subdistrict, FCC believed it had an understanding with Life Care that Life Care would not build the 57 beds from CON 7138 in close proximity to FCC's existing nursing home on Cypress Boulevard in Winter Haven. Life Care acknowledges that, in fact, it discussed the location of the facility authorized by CON 7138. But beyond this discussion, there was no definitive evidence produced in this proceeding that the two had a meeting of the minds on the issue. No written contract exists reducing the ephemeral agreement to writing. And as stated above, AHCA was not persuaded by either of the parties, let alone both as the result of any agreement, that CON 7138 should have a limit on where within the subdistrict the 57 bed facility could be located. Life Care plans to build the facility authorized by CON 7138 on the Cypress Boulevard site (and there is no apparent impediment to this plan), the same site it proposes for the facility it hopes will be authorized by CON 8069. Whatever may be the origin of the dispute over the site of the facility authorized by CON 7138, (discussions between FCC and Life Care, or even some unwritten agreement if ever entered,) the appropriateness of the Cypress Boulevard site for CON 7138 is beyond dispute. Rather, the issue in this case centers on whether the Cypress Boulevard site may accommodate more than just the "CON 7138" facility. The issue, in short, is whether the Cypress Boulevard site may serve as the location for 73 beds authorized by a CON issued later than CON 7138 with which Life Care hopes to combine CON 7138. This later CON is CON 7354. 2. CON 7354 Certificate of Need 7354 was granted to SHCC Services, Inc., by Final Order rendered by AHCA on February 21, 1995. It authorized the addition of 42 beds to an existing 31-bed facility. It did more. It also authorized the replacement of the existing facility. The facility is found in Lake Alfred, a short drive north of Winter Haven. At the time CON 7354 was issued, the facility had long been known as the Lake Alfred Restorium. In the meantime, its name has been changed. It will be referred to in this order, for the most part, therefore, as the "Lake Alfred Facility." The Lake Alfred Facility Now known as the Lake Alfred Health Care Center, the Lake Alfred Facility, as one would expect from its name, is in Lake Alfred, Florida. Lake Alfred, approximately two miles north of the northern boundary of the City of Winter Haven, is unincorporated. The facility, itself is more than five miles from the proposed site on Cypress Boulevard where Life Care will build at least a 57-bed facility. With a history extending back for many decades to its inception as a "restorium," it is one of the oldest facilities of its kind in the state. There is no question that this physically declining facility needs to be replaced. Constructed initially as a residence, the Lake Alfred Facility, some time ago, was converted to a nursing home. It is presently owned and operated by Life Care, having been owned previously by SHCC Services, Inc. At the time of hearing, there were about 30 residents living at the Lake Alfred Facility. Of the thirty, six are from Lake Alfred. Most of the families of the Lake Alfred residents, however, now reside in Winter Haven. The residents of the facility receive the bulk of needed medical support from sources outside Lake Alfred, (primarily from Winter Haven), because there are neither hospitals nor physicians with offices in Lake Alfred. SHCC awarded CON 7354 In February of 1994, prior to Life Care's acquisition of the Lake Alfred Facility, SHCC was awarded CON 7354 by the agency. Prior to the final decision by the agency, SHCC had been in competition with Life Care for 42 beds based on a fixed need pool of like number. Indeed, Life Care had requested an administrative hearing on the agency's initial decision to award the 42 beds to SHCC. But, the hearing was never held. Life Care voluntarily dismissed its petition as part of a settlement agreement. Whatever the terms of the settlement agreement, the award was at least a partial, if not total, victory for SHCC in the battle for the 42 beds; SHCC was awarded all 42 while Life Care's application was denied. Certificate of Need 7354, however, did not just authorize 42 new beds. It authorized the construction of a 73- bed nursing home in AHCA District 6, Subdistrict 5, Polk County. The 73 beds were awarded based upon the fixed need pool of 42 beds and the applicant's desire to replace the aging 31-bed restorium. One of main reasons, if not the paramount reason, for awarding the 42 beds to SHCC rather than Life Care, was that the beds could be added to the 31 existing beds at the restorium. This expansion, in turn, would be the catalyst for the replacement of the 31 beds. The result of such an arrangement would be the continuation of a single replaced and expanded facility in Lake Alfred, as opposed to the scenario should Life Care prevail: a new 42-bed facility elsewhere, leaving in Lake Alfred an existing 31-bed restorium, badly in need of replacement but without the incentive to carry it out. A decision favoring SHCC over Life Care was appealing as well because it retained for the Lake Alfred Community a facility which the community had utilized for many years and over those years had come to depend on. Furthermore, these many years of the facility's service to the community had led to the firm establishment of the venerable restorium's reputation for high quality of care. Terms Relating to the Location of the 31-Bed Replacement Facility Authorized by CON 7354 Just as in the case of CON 7138, SHCC agreed when it submitted its Certification of the Applicant on AHCA Form 1455A, Oct 92, as part of its application for the CON that it would be "bound by the representations contained in [the] application." FCC Ex. No. 8, Omissions Response, CON Number 7354, p. 3. As part of the same application, again on AHCA Form 1455A, Oct 92, SHCC submitted a page entitled "Conditions Predicated Upon Award." See FCC Ex. No. 8, Omissions Response, CON Number 7354, p. 4. In the Omissions Response, in Paragraph C., of the "Conditions" page, the following is stated: I have checked and described the items which represent special features or address unique circumstances that shall appear as conditions on a certificate of need should one be issued. Id. Four items follow, the first of which reads, "Specific site within the subdistrict. The parcel or address is as follows". No address, however, is listed nor is the item checked. The State Agency Action Report ("SAAR") for CON 7354, which co- incidentally reports on CON 7455, lists Objective 5 of the eight objectives existing for the CON review criteria found in Section 408.035, Florida Statutes, as, "To Locate Nursing Homes in Market Areas Where They Become Integral Component[s] of the Local Health Care Delivery System Continuum (125 points)." FCC Ex. No. 2, p. 21. Three items comprise Objective 5: 5A-Community Linkages, Non-Nursing Home Services and Geographic Access; 5B-Geographic Area Served; 5C-Geographically Underserved Area. Id. The SAAR goes on to state with regard to "CON Number 7354:" SHCC Services, Inc. attained 100 points out of a maximum 125 points ... In addressing geographic access issues, the applicant stated, "the facility is planned to be located within 5 miles of Lake Alfred. By locating the facility close to the existing facility, the existing relationships with medical providers and social service agencies listed above will remain intact." Id. (e.s.) Indeed, a review of SHCC's application for CON 7354 proves that the quoted statement in the SAAR was made by SHCC as part of its application. In its Omissions Response, Part 2: Requirements, under Item 5A and the heading, "Geographic Access," at p. 27c, the following appears: The proposed facility location will maximize geographic access for residents and their families, facility staff, and other providers and agencies in Polk County. As discussed in question 5B, [the facility is planned to be located within 5 miles of Lake Alfred]. By relocating the replacement facility close to the existing facility the existing relation- ships with medical providers and social service agencies listed above will remain intact. Furthermore, the geographic access of these providers and agencies will remain undisturbed. (Emphasis added). The import of locating the expanded replacement facility within five miles of Lake Alfred is explained further elsewhere in the application. Under Item 5B in the Omissions Response, "Reasons for Selecting Particular Geographic Area to be Served," there are several references to the distance "5 miles." For example on p. 27e, the following appears: "... Lake Alfred is located approximately 5 miles from Winterhaven [sic] ...". On p. 27f, the following references are made, "Located just 5 miles north of Winterhaven [sic], Lake Alfred serves as a bedroom community for Winterhaven [sic]", and "Lake Alfred is also only 5 miles from Interstate 4 which connects Orlando and Tampa." As evidenced by SHCC's application, however, its intent was that the replacement nursing home be not just within 5 miles of Lake Alfred, but actually in Lake Alfred. The following unambiguous statement appears as the first sentence under Item 5B on p. 27e of the Part 2: Requirements, Omissions Response, FCC Ex. No. 8: "SHCC has chosen Lake Alfred in Polk County for the location of the replacement nursing home." In the main, the remainder of the discussion of Item 5b, "Reasons for Selecting Particular Geographic Area to be Served," is devoted to the basis for a "Lake Alfred" location for the replacement facility. Among the reasons are SHCC's desire to continue to operate the Lake Alfred Restorium because the restorium's "established presence and reputation in the area took years to build," id. p. 27e. In addition, "[w]ithin Polk County, Lake Alfred provides a favorable combination of geographic access and small town comforts for residents," id. p. 27f. Finally, in elaboration of these points, SHCC represented: Residents of Lake Alfred enjoy the small town atmosphere as well as access to larger towns. The elderly Lake Alfred Restorium residents are especially appreciative of the quietness and safety of this town. The crime rate is low, and the local police department and fire department are nearby and very responsive. The surrounding area has many lakes and parks which the nursing home residents visit on outings. Id. Of course, since Lake Alfred is unincorporated, it is difficult to state with certainty what is within the limits of Lake Alfred as opposed to what is not within it yet within 5 miles of it. Nonetheless, there is no doubt that any location within the city limits of Winter Haven cannot be, at the same time, in Lake Alfred. Other Issues 1. Construction and Other Matters Relating to Site The proposed 130-bed facility will have distinct units of 60, 50 and 20 beds, comprising approximately 66,000 square feet, for a cost of about $82.00 per square foot. With a reasonable construction schedule and using Type 5 construction, the project satisfies all state and federal requirements for a nursing home. Life Care chose the proposed site on Cypress Boulevard for many of the same reasons FCC chose its location less than 1,000 feet away. It is close to hospitals and has good access to roads and highways which promotes accessibility to most needed medical services. In contrast to the Lake Alfred Facility, the Cypress Boulevard site is much better in terms of medical services accessibility, one of the primary considerations in selecting a nursing home site. The site for the nursing home is a 5.8 acre parcel which is part of a larger (12.3) acre piece of property in Winter Haven. Life Care paid $1,387,000 for the entire 12.3 acres, but is allocating only $360,000 for the 130-bed project. The remainder of the property will be used for an assisted living facility and for a drainage pond via easement to the Department of Transportation. Life Care had not purchased the site at the time the application for CON 8069 was filed, but had begun negotiations for the site as a potential location for the facility. The negotiations resulted in a contract. Life Care did not make a final decision on the site until after the CON application had been filed. It was intended from the beginning of negotiations that only a part of the 12.3 acres would (if purchased) be used for the 130-bed project and that $360,000 would be allocated to the project at issue. Life Care projected land costs for the project based upon the combination of land costs from the CONs which it is attempting to combine. This combination of costs is an acceptable method for compiling figures for "combination" applications and was accepted as reasonable by the agency. The projections, based upon reasonable expectations, indicate the project will be financially feasible in the short term and long term. 2. Compliance with Health Plans Life Care's application complies with the three allocation factors in the District Health Plan. As for Allocation Factor 1, (the provision of services to Medicaid patients,) although the weighted average of all 130-beds in the newly proposed combined facility is 57.2 percent, well below the present district average of about 70 percent, it agreed to conditions for the newly- approved beds (those other than the 31 beds from the old Lake Alfred Restorium), in excess of 74 percent. The weighted average of all 130-beds is lower than the percentage for newly-authorized beds only because there is no condition, nor has there ever been one, relating to Medicaid allocation for the existing 31 beds at the Lake Alfred Facility. Life Care has also agreed to have specialized nursing home services at the facility (Allocation Factor 2) and not to discriminate against the provision of services and care to HIV infected residents, (Allocation Factor 3). Backing up its stance of non-discrimination against HIV infected residents is Life Care's history of serving "some HIV patients." (Tr. 176) There is no competing applicant against which Life Care's Medicaid average can be tested. But it is fair to point out that FCC's Cypress Boulevard facility has a condition that only 44 percent of its resident population be Medicaid patients. Granting CON 8069, therefore, will likely increase Medicaid patient access to nursing homes in Winter Haven. The need in Polk County for the beds Life Care wants to place at its Cypress Boulevard location has previously been determined and are not at issue. Since the issuance dates of the two underlying CONs, 7138 and 7354, the agency has projected need numbers for over 200 new beds in addition to the 130 beds Life Care hopes to house at the Cypress Boulevard facility. 3. Other Health Planning Concerns The five nursing homes in Winter Haven are currently operating at over 90 percent occupancy. Both the state and local health plans prefer beds to be located in areas with high occupancy. Winter Haven is the second largest city in Polk County and contains a high percentage of elderly persons, a population that is rapidly growing. The bed to population ratio is a health planning measurement used in determining need. Winter Haven has a lower ration of nursing home beds per 1,000 residents than Polk County as a whole. In contrast, Lake Alfred, with only 2500 or so residents, has a much smaller population than Winter Haven. As stated elsewhere, one of the main advantages of Winter Haven over Lake Alfred for placing a nursing home is the closer proximity to hospitals and medical services. 4. Operations and Programs Life Care is proposing a complete range of programs at its facility, including Alzheimer's Care, adult day care, subacute care, respite care and numerous non-nursing services. Relocation of the existing facility to Winter Haven would have a positive effect on services being provided. Staff necessary to provide the services and programs would come primarily from a 15-mile radius of the facility. Skilled personnel to perform those services would come, at least in part, from local nursing programs already existing in Winter Haven. The majority of the staff at Lake Alfred Care Center come from outside Lake Alfred. Many or most are from the City of Winter Haven. Life Care has obtained commitments from all staff at the Lake Alfred Facility to continue employment with Life Care upon completion of the new facility if authorized by CON 8069. There would be a broader range of services available at the 130-bed facility than at the two smaller facilities, the Lake Alfred Facility and a smaller 57-bed Cypress Boulevard facility. The construction and operation of the facility proposed under CON 8069 would have a positive impact on care in the area because it would force FCC to remain even more competitive in the provision of quality services in a quality work environment than if Life Care's new facility were to be limited to 57 beds. 5. Life Care's Service Record Life Care's facilities in Florida meet or exceed the Medicaid average in the subdistricts in which they are located. Of Life Care's six existing facilities in Florida, the three facilities eligible for Superior Rating are indeed rated Superior by the State. The other three facilities have the highest rating to which they are entitled. Life Care maintains affiliations with schools to provide scholarships for students pursuing professions in long term health care. The agency considers Life Care a major provider of care and a provider of quality health care services.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Agency for Health Care Administration deny CON 8069. DONE AND ENTERED this 2nd day of May, 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 2nd day of May, 1996.
Conclusions DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 Having reviewed the Administrative Complaints and Notices of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Notices of Intent to Deny and Election of Rights forms to Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center. (Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Notice of Intent to Deny is superseded by this Agreement. 3. Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center shall pay the Agency $25,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 4. Conditional licensure status is imposed on Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center beginning on April 12, 2013. ORDERED at Tallahassee, Florida, on this 22 day of Marek 2014. Dg Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to 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 of 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. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this 3/4°—day of Mh re ‘A 2014. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Thomas J. Walsh II Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Anna G. Small, Esq. Allen Dell, P.A. 202 South Rome Avenue Tampa, Florida 33606 (U.S. Mail) Linzie F. Bogan Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Lynne A. Quimby-Pennock Administrative Law Judge Division of Administrative Hearings (Electronic Mail) aU DECOY T |} 7256 9006 F111 6922 4925 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CovenNOR Better Health Care for all Floridians SEA ORETARY. EK May 22, 2013 ADMINISTRATOR “cre RECEIVED LAKESHORE VILLAS HEALTH CARE CENTER CLLIFY INTAKE UNFFLICENSE NUMBER: 1282096 16002 LAKESHORE VILLA DR . FILE NUMBER: 62921 TAMPA, FL 33613 MAY & 9 2013 CASE #: 2013005471 Agency for Health NOTICE Of INFENTEO. DENY Dear Ms. Johnson: It is the decision of this Agency that Lakeshore Villas Health Care Center’s license renewal application for a nursing home be DENIED. The specific basis for the Agency’s decision is based on the following grounds: e Pursuant to section 400.121(3)(d), F.S., the Agency shall revoke or deny a nursing home license for two class I deficiencies arising from separate surveys within a 30 month period. Lakeshore Villas Health Care Center was cited for Class I deficiencies on October 13, 2011 and November 14, 2012. ¢ = Section 408.815(1), F.S., states that in addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license or change of ownership application include any of the following actions by a controlling interest: (a) a violation of this part, authorizing statutes, or applicable rules; and (d) a demonstrated pattern of deficient performance. EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. for Adminjstraty (/C- Bernard E. Hudsds, Manager Long Term Care Unit Agen ce: Agency Clerk, Mail Stop 3 EXHIBIT 1 Visit AHCA online at ahca.myflorida.com 2727 Mahan Drive,MS#33 Tallahassee, Fiorida 32308 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: LAKESHORE VILLAS HEALTH CARE CENTER CASE NUMBER: 2013005471 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed Notice of Intent to Deny of the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Fine, Administrative Complaint, or some other notice of intended action by AHCA. An Election of Rights must be returned by mail or by fax within twenty-one (21) days of the day you receive the attached Notice of Intent_to Impose_a Fine, Administrative Complaint or any other proposed action by AHCA. If an Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please reply using this Election of Rights form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) Please return your ELECTION OF RIGHTS to: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Phone: (850) 412-3630 Fax: (850) 921-0158 PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS: OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other notice of intended action by AHCA and I waive my right to object and have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the proposed penalty, fine or action. OPTION TWO (2) __ I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)_____I dispute the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, and I request a formal hearing (pursuant to Section 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within twenty-one (21) days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: Nursing Home License number: 1282096 Applicant Name: SENIOR CARE GROUP INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER Contact person: Name Title Address: Street and number City Zip Code Telephone No. ; Fax No. Email (optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: ‘Date: Print Name: Title: STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS. Case Nos. 2013006534 SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to change Respondent’s licensure status from Standard to Conditional commencing June 4, 2013, and to impose administrative fines in the amount of two thousand five hundred dollars ($2,500.00), based upon Respondent being cited for one (1) isolated State Class II deficiency. JURISDICTION AND VENUE 1. The Agency has jurisdiction pursuant to §§ 120.60 and 400.062, Florida Statutes (2012). 2. Venue lies pursuant to Florida Administrative Code R. 28-106.207. PARTIES 3. The Agency is the regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes and rules governing skilled nursing facilities pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended), EXHIBIT 1 Chapters 400, Part II, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code. 4. Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 5. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 6. The Agency re-alleges and incorporates paragraphs one (1) through five (5), as if fully set forth herein. 7. That pursuant to Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and Support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with tules as adopted by the agency. § 400.022(1)(1), Fla. Stat. (2012). 8. That Florida law provides the following: “‘Practice of practical nursing’? means the performance of selected acts, including the administration of treatments and medications, in the care of the ill, injured, or infirm and the promotion of wellness, maintenance of health, and prevention of illness of others under the direction of a registered nurse, a licensed physician, a licensed osteopathic physician, a licensed podiatric physician, or a licensed dentist. A practical nurse is responsible and accountable for making decisions that are based upon the individual’s educational preparation and experience in nursing.” § 464.003(19), Fla. Stat. (2012). 9. That Florida law provides the following: “A complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1. Reviewed no less than once every 3 months, 2. Reviewed promptly after a significant change in the resident’s physical or mental condition, 3. Revised as appropriate to assure the continued accuracy of the assessment.” Rule 59A-4.109(1)(c), Florida Administrative Code. 10. That Florida law provides “All physician orders shall be followed as prescribed and if not followed, the reason shall be recorded on the resident's medical record during that shift.” Rule 59A-4.107(5), Florida Administrative Code. 11. That Florida law provides the following: “Every licensed facility shall comply with all applicable standards and rules of the agency and shall ... Maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner.” § 400.141(1)(h), Fla. Stat. (2012). 12. That on June 4, 2013, the Agency completed a re-visit to a complaint survey of Respondent’s facility. 13. That based upon the review of records and interview, Respondent failed to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, where, inter alia, Respondent failed to implement nutritional interventions for a resident and failed to ensure that provided wound care services for the treatment of pressure ulcers for two (2) of seven (7) sampled residents, said failure being contrary to community standards and Respondent’s policies and procedures, and the same being contrary to law. 14. That Petitioner’s representative observed resident number two hundred twenty-three (223) on May 31, 2013, at approximately 5:30 p.m. and noted a thin gentleman in a private room on a low bed with signs on the door/equipment which indicated the resident was on special infection control precautions. 15. That Petitioner’s representative reviewed Respondent’s records related to resident number two hundred twenty-three (223) during the survey and noted as follows: a. The face sheet identified the resident's original admission date as May 7, 2012, and a most recent admission date as March 4, 2013. b. The resident was documented as a male, fifty-nine (59) years of age, suffering from the following diagnosis: pressure ulcer, paralysis agitans, hypertension, diabetes mellitus, anxiety, dementia without behavioral disturbance, chronic kidney disorder, depression, esophageal reflux, and Alzheimer's disease. c. A care plan was developed on May 16, 2013 as follows: i. Problem of: Actual skin breakdown related to unstageable to coccyx debrided surgically May 3, 2013; May 3, 2013 Right outer ankle open area Stage II. ii. Relevant care plan approaches were as follows: Treatment to coccyx/wound vac as ordered; Right ankle treatment as ordered; Monitor site for signs and symptoms of infection. d. Physician's orders included the following: i. May 17, 2013 Telephone Order: Continue Medihoney to right lateral ii. iil. ankle, change dressing every other day and as _ needed soiling/dislodgement. May 17, 2013, Telephone Order: Discontinue Santyl to sacral wound, discontinue Acticoat Flex to sacral wound; Apply Silver Foam to sacral wound, for wound vac dressing. May 24, 2013, Telephone Order: Sacral wound: Apply collagen matrix to wound bed; then apply KCI wound vac. ,change dressing every Monday, Wednesday, and Friday and as needed (PRN) soiling/dislodgement. The resident’s May 2013 Treatment Administration Record (TAR) reflected as follows: i, ii. The May 17, 2013, treatment to the sacral area was documented to Apply silver foam to sacral wound. Then black foam then wound vac every Monday, Wed, and Friday and PRN. This treatment was not documented as administered on May 22, 2013, Wednesday, as ordered. A new treatment of May 24, 2013, to the sacral wound, was noted to be done on the 7:00 a.m. - 3:00 p.m. shift. On Friday May 31, 2013, at approximately 6:30 p.m., the treatment for that day had not yet been initialed as administered. Respondent’s unit manager for the resident on May 31, 2013, at 6:40 p.m. confirmed to Petitioner’s representative that this treatment should have been done by the day shift nurse. Weekly wound documentation signed by the resident's unit manager and dated May 30, 2013, documented the following wound measurements for May 30, 2013: Sacrum - 8.3 cm x 8.0 cm x 1.6 cm with undermining at 12:00 and 4.5 cm deep; Ankle - 0.5 cm x 0.4 cm x 0.2 cm. A progress note by the Wound Care Advanced Registered Nurse Practitioner dated May 24, 2013, documented the exact same measurements as the May 30, 2013 unit manager's weekly wound documentation. 16. That as a result of documentation in the record of resident number two hundred twenty- three (223), which was lacking documented care to the sacral wound on May 22 and 23, 2013, and the documented unchanged appearance of the wound for six (6) days, Petitioner’s representative requested the opportunity to observe wound care of the resident on May 31, 2013 commencing at approximately 6:45 p.m. and noted as follows: a. An isolation sign was on the door with Personal Protection Equipment (PPE) hanging from a yellow door container. Prior review of the infection control log revealed that the resident was receiving contact isolation precautions for C. Diff (Clostridium Difficile). Respondent’s staff nurse “A” was at the bedside and did not have an isolation gown covering his uniform. A wound vacuum machine was on the floor, resting on a floor mat on the right side near the head of the bed. The machine tubing was attached. It was not connected to the secondary tubing that attaches to the resident. An over bed table against the wall contained new wound care supplies including foam and 4x4s needed for wound care. The supplies were open and appeared ready to use. The over bed table had no clean barrier and also resting on the table were the following: a partial glass of cranberry juice with some partially dried areas of juice noted under the wound vacuum packaging, a covered Styrofoam cup of water, eye glasses, newspaper, and a crossword puzzle book. Against the right wall were two large isolation waste bins; a red and a yellow one, with a partially consumed dinner tray on top of the red bin. Nurse “A” stated he had not completed the wound care today, and that the wound vacuum came off the sacral wound "by itself” earlier today and he had covered the wound with a temporary covering. There was a clear dressing over the sacral wound. It was not dated. Respondent’s unit manager of the 200 hall came into the room to assist with positioning the resident. Nurse “A” washed his hands, gloved, and removed a small adhesive dressing covering the right lateral ankle. The unit manager began to measure the ankle wound using a stick end of a Q tip and comparing it to a paper ruler. She referred to the ankle wound as a Deep Tissue Injury (DTI). It is listed as a pressure ulcer on the wound care consult's document dated May 23, 2013. The ankle wound was an indented, round area in the middle of the wound with a yellow/pink base. The periwound area was red/pink and appeared inflamed and slightly edematous, extending about one inch past the open area boarder. The unit manager stated that the periwound discoloration was "not there before" and she would call the doctor. Staff nurse “A” stated he disagreed with the periwound being inflamed and stated when using the medication "Medihoney"” the wound might look "a little irritated." The unit manager stated this was a change from the observation of a couple of days ago and stated the treatment with Medihoney had been ongoing for "about one month." The right ankle wound remained uncovered for the duration of the wound care, lasting over one and one half hours, including incontinence care provided by two aides, that required the turning and positioning of the resident. Staff nurse “A” changed his gloves, used hand gel, and moved to the right side of the bed to care for the sacral wound. The nurse stated he "measured him on Wednesday and the wound was around 9 x 9 centimeters (cm.) with undermining.” He stated he was recently rehired by the facility and had returned several days ago. He was a Registered Nurse, listed on the employee list as the Wound Nurse. He removed the old undated dressing which contained a 4 x 4 gauze saturated with pink serous drainage. Continuing with the same gloves he measured the wound with a paper tape and found the following: length= 9.0 cm; width, 6.5 cm; depth 3.5 om. The base of the wound was visible with about 20% yellow slough and 80 % granulation tissue. Using the same gloves, the nurse picked up a small flashlight and visualized the wound, set the flashlight down, picked up a Q tip and used the cotton end to evaluate the inside of the wound. He stated there was tunneling in two areas; one area of 1.7-2.0 cm and a bb. cc. dd. ee. ff. gg. ii. ji- I. second "around 4 o'clock" measuring 3.5 cm. The nurse measured the wound on his knees, with his uniform against the bed at times. Per a facility lab report, dated April 20, 2013, a wound culture revealed heavy growth of two bacteria, Escheriachia Coli and Proteus Mirabilis. The resident was treated with a course of the antibiotic Cipro. The resident was shaking with a Parkinsonian type tremor of the upper extremities. He was on his left side. He was alert and oriented. He denied pain at about 7:10 p.m. At about 7:10 p.m., the unit manager observed the wound vacuum on the floor. She picked it up, removed the tubing and discarded it. She initially placed it back on the floor mat, picked it up again and hung it from the bed rail. Staff nurse “A” then was observed to re-glove without sanitizing his hands, touched a red garbage bag on the bed with the clean gloves, and turned to the over bed table and began assembling his supplies, including clean 4x4s, with the same gloves. He removed his gloves, did not sanitize his hands, re-gloved, sprayed a 4 x 4 gauze with wound cleanser, and placed the 4x4 into the base of the wound. The periwound skin was red and blotchy with the perimeter extending over one inch past the open wound. There was no odor present. He again removed his gloves, did not sanitize, and re-gloved. He then moved the juice and personal items off the table, and moved some wound care supplies from the bed to the table. oo, pp. qq. SS. uu. He did not clean up the spilled/dried juice on the table. The nurse noted that the resident was incontinent of a small amount of soft bowel movement. He stopped the wound care and asked for the assistance of nurse aides to help with the incontinence care. Around 7:25 p.m., two aides came into the room wearing isolation apparel including gowns, gloves and masks. Staff nurse “A” stepped away from the bed, removed his gloves, washed his hands and left the room, stating he was going to "get wipes to wipe down the pump." The sacral wound remained covered with a 4x4 saturated in wound cleanser. The ankle wound remained uncovered. One of the aides stated they needed to remove the two rubber backed incontinence pads under the resident as they were not to be used with the special mattress under the resident. They rolled the resident side to side to remove the pads and again to provide incontinence care. The sacral wound remained covered with the unsecured 4x4 and the ankle wound remained uncovered during the incontinence care. At 7:35 p.m., staff nurse “A” returned wearing an isolation gown over his uniform. He began to clean the wound vacuum machine with a solution marked "Virasept." A hand written note on the pump spray stated "C. Diff." and large black labeling down the side stated "EXP: November 2011.” XX. yy: ZZ. bbb. cece. ddd. cece. fff. gee. After he cleaned the machine this surveyor asked about the expiration date. The unit manager from another unit appeared at the door and initially stated that was the manufacturing date, but then agreed EXP was the universal label for expiration and left to obtain another bottle of cleanser. Staff nurse “A” resumed wound care after he re-gloved and moved to the window side of the bed, attempted to reposition the resident alone, stated it was "better from the other side," and moved the over bed table again to the door side of the bed. He handled the spray bottle, the resident, the plugs to an outlet, and the air mattress controls at the bottom of the bed with the same gloves. At 7:50 p.m., nurse “A” disposed of his gloves, used hand gel, re-gloved and repositioned the resident on his left side, toward the window. At this time, the unit manager from another unit was assisting with positioning the resident, asked the resident if he was okay, and the resident stated he needed a pain pill. The resident stated his pain was nine (9) of ten (10). The unit manager of the 200 hall was informed of the need for a pain pill. At 7:57 p.m., staff nurse “A” removed the 4x4 gauze from the sacral wound, removed the right glove, did not use hand sanitizer, re-gloved the right hand, and sprayed wound cleanser on a clean 4x4. He removed both gloves and re-gloved without using hand sanitizer. He cleaned the periwound area with the wound cleanser gauze, removed his gloves, did not sanitize his hands, and continued. No bone was visible, but the wound base showed outlines of boney prominences. (An X-ray of the sacrum and coccyx were done on April 26, 11 iii. I. 000. Ppp. qaqa. SSS. uuu. 2013, to rule out osteomyelitis. There was none detected at that time.) Nurse “A” removed his gloves, used hand sanitizer, re-gloved and used several packages of skin prep to the area surrounding the wound. He removed his gloves, did not sanitize his hands, and re-gloved. He used a two inch clear tape to, as he said, "picture frame” the wound in the periwound area, At 8:07 p.m. the unit manager returned with the pain pill. . The resident, alert and oriented, stated again that the pain was nine (9) of ten (10). The unit manager gave him the pill, crushed in applesauce, and left the room without washing her hands. At 8:10 p.m., nurse “A” prepared the wound supplies by cutting the black foam piece used with the wound vacuum. He removed the gauze in the sacral wound base and, using his right index finger, covered with a clean gloved finger, he probed the sacral wound areas of tunneling near the proximal edge of the wound, toward the spine. He removed his gloves, used hand gel, re-gloved, and placed small pieces of white foam wedges along the areas of wound tunneling. He then placed the large piece of black foam into the wound, covering the wound bed. He covered the entire wound with clear plastic wound covering. He then removed his gloves, did not sanitize his hands, re-gloved and cut a hole in the center of the clear plastic wound cover for the wound vacuum site. He created a "foam bridge" across the right buttocks for the tubing for the wound vacuum, again removed his gloves, did not sanitize, and re-gloved to complete the wound care. The surveyor left the resident bedside at 8:25 p.m., one hour and forty minutes after the beginning of wound care. 17. That Petitioner’s representative further reviewed Respondent’s records related to resident number two hundred twenty-three (223) during the survey and noted as follows: a. The resident had a history of Depressive Disorder and Parkinson's Disease (Paralysis Agitans), both of which could have contributed to his inability to express his anguish during this extended wound care experience. He was observed to be passive when asked if he was doing alright, until the time when he requested pain medication. The psychological overlay from this experience, outside the expectations for wound care of this type, are yet to be determined. The dependent state of this resident was clearly documented throughout the medical record. On May 14, 2013, the nurse practitioner wrote that the resident was "eating with staff assisting" and he "wants to go home." The nurse practitioner added that the resident was "more alert" but "slow to answer.” It is unknown whether the resident felt the degree of anguish or degradation others would feel in this situation. He seemed unable to express his feelings during this observation. The resident was fifty-four (54) years of age, seventy-two (72) inches tall, and had an admission weight of one hundred fifty-four (154) pounds. Weight change history for April to May 2013 reflected as follows: i. April 16, 2013 — one hundred forty-nine (149) pounds. vi. i. April 22, 2013 — one hundred forty-eight (148) pounds. iii. April 29, 2013 ~ one hundred forty-eight (148) pounds. May 13, 2013 — one hundred thirty-eight (138) pounds. May 27, 2013 — one hundred thirty-nine (139) pounds. May 30, 2013 — one hundred thirty-nine (139) pounds. Care plan dated May 17, 2013, provides as follows: i. iii. Problem: ...risk for alteration in nutrition/hydration related to texture modified diet. Cognitive impairment. - Relevant goal related to this nutrition concern: ...will not experience significant weight changes thru next review date of 8/13/13. Relevant approach was in place to assist with achieving this goal: Supplements as ordered. The registered dietitian's notes since development of this care plan revealed the following entries: i, May 17, 2013, 10:23 p.m. - Weight and Wound review: Weight down in past month, after having been stable for over a month -- now at 138 lbs, 78% of ideal body weight (IBW). This represents a significant weight loss of 7.5% in 30 days, likely r/t C-Diff. Skin: Stage II sacrum (This wound is actually a large stage 4 pressure ulcer). Labs: most recent from 5-11 indicate moderately depleted hemoglobin and hematocrit at 10.3/30/4; albumin from. 5-2 significantly depleted at 2.48. Diet: LCS Puree with nectar thick liquid--resident averages 50% - 100% at most meals. Also receives Med Pass 90 ml four times a day, Prostat 30 ml twice a day, and multi-vitamin (MVI) with minerals for extra nutrition support. 18, Recommend: (1) change Med Pass to 120 ml four times a day secondary to wound (2) change Prostat to 30 ml three times a day secondary to wound/C-Diff (3) clarification: MVI with minerals one daily by mouth secondary to wound (3) fortified foods three times a day with meals. ii. May 30, 2013, 7:29 p.m. - Weight/Wound review: Weight has stabilized in past 2 weeks--now at 139 Ibs, 81% of ideal body weight (IBW). This represents a significant weight loss of 6.1% in 30 days and 9.7% in 90 days--most recent loss likely related to C-Diff. Skin: Stage IV sacrum and open area right ankle. Labs: most recent from 5-11 indicate moderately depleted hemoglobin and hematocrit at 10.3/30.4; albumin from 5-2 significantly depleted at 2.48. Diet: LCS Puree with nectar thick liquids-- resident eats well at meals (50-100%). Also receives Med Pass 120 ml four times a day, Prostat 30 ml three times a day, MVI with minerals, and fortified foods for extra nutrition support. Recommend: (1) magic cup each day at lunch secondary to weight loss. j. A telephone physician order written on May 17, 2013 provided: 1. Change Med Pass to 120 ml four times a day; 2. Change Prostat to 30 ml three times a day. k. The resident’s May 2013 medication administration record (MAR) and treatment administration record (TAR) did not reflect the orders to increase the supplement of Med Pass and Prostat written on May 1, 2013, and therefore the supplements were not administered in accordance with the dietitian's recommendations or physician's orders. That Petitioner’s representative interviewed Respondent’ s registered dietitian on May 31, 2013 at 7:09 p.m. regarding resident number two hundred thirty-three (233) who indicated as follows when shown that the supplement orders from May 17, 2013, had not been implemented: "He needs everything we can give him and then some. I know the order was written to increase Med Pass and Prostat. I wrote it myself.” 19. That Petitioner’s representative interviewed Respondent’s director of nursing on June 1, 2013 at 10:30 a.m. advising of the infection control concerns noted during the observation the night before with staff nurse “A” and resident number two hundred thirty-three (233) to which the director responded that the nurse was recently rehired and was not, in fact, the wound nurse, and that nurse A, who was not in the building on this day, was to be monitoring wound healing and a desk nurse on the north wing. 20. That Petitioner’s representative requested an updated employee list as nurse “A” was listed as "wound nurse," and the second list recorded nurse “A” as a staff nurse. 21. That Petitioner’s representative reviewed Respondent’s records related to resident number seventy-three (73) during the survey and noted as follows a. The resident was readmitted on November 28, 2012, per the facility face sheet. b. Diagnoses listed on the Physician Order Sheet (POS) for June 2013 included dementia, cardiovascular accident (CVA), osteomyelitis and sacral decubitus. c. Weekly Wound Documentation forms dated January 4, through May 29, 2013, documented that the resident was receiving ongoing treatment for a Stage IV sacral pressure ulcer. d. Weekly Wound Documentation forms dated April 6 through May 30, 2013, showed additional treatment for an unstageable wound on the right ischium. e. Current wound orders per the June 2013 physician order sheet were as 16 follows: i, Sacrum - apply Medihoney, fill with Ca (calcium) alginate, cover with clear occlusive dressing. Change every Monday, Wednesday and Friday and PRN (as needed). ii. Right hip - apply silver hydrogel with collagen (wound size). Cover with ded (dry clean dressing). Change Monday, Wednesday and Friday and PRN. 22. That Petitioner’s representative requested the Opportunity to observe wound care of resident number seventy-three (73) on June 3, 2013 commencing at approximately 11:35 a.m. with Respondent’s employee “B,” the resident’s assigned nurse, and noted as follows: a. b. The resident was positioned on the left side. The nurse washed her hands, put on gloves and removed the existing dressing from the resident's right hip wound. A moderate amount of serous drainage was noted on the discarded dressing. Without washing hands or changing gloves, she removed and discarded the dressing from the sacral wound. No drainage was noted on the sacral dressing. The nurse then removed her gloves, washed her hands and put on clean gloves. She proceeded to clean the sacral wound with wound cleanser and discarded the soiled gauze. She then cleaned the right hip wound and discarded the soiled gauze. The nurse did not wash her hands and/or change gloves between cleaning the two separate wounds. i. The nurse continued the wound care as ordered by applying Medihoney and calcium alginate to the sacral wound which was then covered with a clear occlusive dressing. j. Without washing hands and/or changing gloves, the nurse completed the wound care for the right hip wound with silver hydrogel ointment and collagen. k. She covered the wound with a clean adhesive dressing. 1 She discarded the used supplies, removed her gloves and washed her hands. 23, That Petitioner’s representative interviewed Respondent’s employee “B” directly after the above described observation and the employee indicated as follows: a. When asked about facility policy and/or procedure regarding wound care for residents with multiple wounds, the nurse stated that it was "usually" the procedure to provide treatment to each wound area separately. b. She stated that, due to the resident's advanced age, she chose to dress the clean, dry sacral wound and proceed directly to the hip wound dressing, c. When asked about the possibility of cross contamination, she agreed that there was a potential for cross-contamination by not washing her hands and changing gloves between the two separate wound care treatments, 24. That Petitioner’s representative reviewed Respondent’s policy and procedure on wound care for dressing applications entitled “Skin and Wound Management, Dressings, Dry/Clean, Level III from the Nursing Services Policy and Procedure Manual, copyright 2001 MED-PASS, Inc. (Revised October 2010), and noted under a subheading titled “Steps in the Procedure” the following twenty-five (25) numbered items: a. Step one (1) - Clean a bedside stand and establish a clean field. b. Steps two (2) through six (6) - Provided additional instructions for assembling supplies and preparing the resident for the procedure. c. Step seven (7) - Wash and dry your hands thoroughly. d. Step eight (8) - Put on clean gloves. Loosen tape and remove soiled dressing. e. Step nine (9) - Pull glove over dressing and discard into plastic or biohazard bag. f. Step ten (10) - Wash and dry your hands thoroughly, g. Steps eleven (11) through thirteen (13) - Provided instructions for opening and arranging dressing supplies using clean technique. h. Step fourteen (14) - Put on clean gloves. i. Step fifteen (15) - Contained instructions for wound assessment. j. Step sixteen (16) - Cleanse the wound. Use a syringe for irrigation if ordered. If using gauze, use a clean gauze for each cleansing stroke. Clean from the least contaminated area to the most contaminated area (usually, from the center outward). k. Steps seventeen (17) through nineteen (19) - Provided instructions to complete the dressing application. L. Step twenty (20) - Remove disposable gloves and discard into designated container. Wash and dry your hands thoroughly. m. Steps twenty-one (21) through twenty-five (25) - Instructions to make the resident comfortable following completion of the procedure. 25. That Respondent’s employee “B” did not follow Respondent’s policy and procedure steps seven (7), eight (8), ten (10), and fourteen (14), where the employee failed to remove gloves, wash hands, and put on clean gloves between treating two separate wounds for resident 19 number seventy-three (73). 26. That on June 24, 2013 at 12:00 noon, Respondent’s nursing home administrator and director of nursing were again informed of the concerns with wound care for residents numbered two hundred twenty-three (223) and seventy-three (73). 27. That the above reflects Respondent’s failure to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, failed to follow physician orders, and failed to ensure that it maintained the facility premises and equipment and conduct its operations in a safe and sanitary manner including, but not limited to, the failure to follow Facility policy and procedure and community standards related to hand sanitation and glove use during wound care, the failure to implement contact procedures related to infection control, the failure to implement care planned interventions, and the failure to follow physician orders. 28. That the Agency determined that this deficient practice has compromised the resident’s ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency, 29. That Respondent was cited for an isolated Class II deficient practice. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of two thousand five hundred dollars ($2,500.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(b), Florida Statutes (2012). 20 COUNT II 30. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 31. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part IT of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2012). WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2012) commencing June 4, 2013. Respectfully submitted this 2 day of July, 2013. f eof THomas J. Walsh II, Esquire FI Bar No. 566365 Agency for Health Care Admin. 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 727.552.1947 (office) DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the ri ght to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: 7, he Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, F Torida, 32308, (850) 412-3630. 21 RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been served by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 8952 on July 2 & , 2013 to Jacqueline F. Hurt, Administrator, Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center, 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and by Regular U.S. Mail to David R. Vaughan, Registered Agent for Senior Care Group, Inc., 1240 Marbella Plaza Drive, Tampa, Florida 33619. a Phorfas J. Walsh, II, Esquire “A / Copies furnished to: Patricia R. Caufman, FOM Jonathon S. Grout, Esq. Counsel for Petitioner P.O. Box 875 Cape Canaveral, Florida 32931 22 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013006534 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)___—S—I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RICK SCOTT GOVERNOR July 8, 2013 LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR . TAMPA, FL 33613 Dear Administrator: ELIZABETH DUDEK SECRETARY RECEIVED GENERAL COUNSEL JUL 12 2013 Agency for Health Care Administration The attached license with Certificate #18248 is being issued for the operation of your facility. Please review it thoroughly to ensure that all information is correct and consistent with your records. If errors or omissions are noted, please make corrections on a copy and mail to: Agency for Health Care Administration Long Term Care Section, Mail Stop #33 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Issued for status change to Conditional. Sincerely, SFracey Weatherspoan for Kathy Munn Agency for Health Care Administration Division of Health Quality Assurance Enclosure ce: Medicaid Contract Management 2727 Mahan Drive, MS#33 Tallahassee, Florida 32308 Visit AHCA online at ahca.myflorida.com gouvmssy fy NC) GBI] JO UOISIAT ch, Areyoroeg Ajndaq ; €102/67/90 ‘LV NOLLVUd Xa vr, nk je? y €10¢/P0/90 ‘ALVC AALLOGAAA > : HONVHD SOLVIS . Sdad 6LT “IVLOL E19EE Td “WdNV.L Ud VTUA JAYOHSHAVT cOO9T YaLNAD. wav) HLTVEH SV TIA AYOHSAAVT ‘SUIMOT[OJ oy} oye1odo : 0} pozoyINe st sasusoy] sy] se pure ‘soIMeEIS BPO “TT ued ‘OOP JaideyD ur pozoyne ‘uoneENsIUUIpy sed YIeOPT 10,4 Aouesw ‘epHopy Jo a1eig.atp Aq poidope suopeyndor pue sopnz.oy) yatm porfdurcs sey “NI “dMOUD TAVD YOINAS ky) wWaryuoo oF st sIL TIVNOILIGNOD HINOH ONISYON AONVUNSSY ALIIVND HLTVaH AO NOISIAIG NOILVULSININGV dav HLTVAH YO AONADV BPO] JO 3381S 960C87IANS ‘# ASNSOIT 8¥C8l -# ALVOIMLLYEO STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, . vs. Case Nos. 2013007612 SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to change Respondent’s licensure status from Standard to Conditional commencing July 11, 2013, and to impose administrative fines in the amount of five thousand dollars ($5,000.00), based upon Respondent being cited for one (1) isolated State Class II deficiency. JURISDICTION AND VENUE 1. The Agency has jurisdiction pursuant to §§ 120.60 and 400.062, Florida Statutes (2013). 2. Venue lies pursuant to Florida Administrative Code R. 28-106.207. PARTIES 3. The Agency is the regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes and rules governing skilled nursing facilities pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended), EXHIBIT 1 Chapters 400, Part Il, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code. 4. Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 5. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 6. The Agency re-alleges and incorporates paragraphs one (1) through five (5), as if fully set forth herein, 7. That pursuant to Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency. § 400.022(1)(J), Fla. Stat. (2013). 8. That Florida law provides the following: “‘Practice of practical nursing’ means the performance of selected acts, including the administration of treatments and medications, in the care of the ill, injured, or infirm and the promotion of wellness, maintenance of health, and prevention of illness of others under the direction of a registered nurse, a licensed physician, a licensed osteopathic physician, a licensed podiatric physician, or a licensed dentist. A practical nurse is responsible and accountable for making decisions that are based upon the individual’s educational preparation and experience in nursing.” § 464.003(19), Fla. Stat. (2013). 9. That Florida law provides the following: “A complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1. Reviewed no less than once every 3 months, 2. Reviewed promptly after a significant change in the resident’s physical or mental condition, 3. Revised as appropriate to assure the continued accuracy of the assessment.” Rule 59A-4.109(1)(c), Florida Administrative Code. 10. That Florida law provides “Ail physician orders shall be followed as prescribed and if not followed, the reason shall be recorded on the resident's medical record during that shift.” Rule 59A-4,107(5), Florida Administrative Code. 11. That Florida law provides the following: “Every licensed facility shall comply with all applicable standards and rules of the agency and shall ... Maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner.” § 400.141(1)(h), Fla. Stat. (2013). 12. That on July 11, 2013, the Agency completed a complaint survey of Respondent’s facility. 13. That based upon the review of records and interview, Respondent failed to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, where Respondent failed to, inter alia, ensure and provide appropriate interventions for bowel incontinence and a dislodged dressing to prevent fecal contamination of an open wound on a resident’s coccyx whose wound was then identified to be a stage II pressure ulcer that had tripled in size within one week from July 2 through 9, 2013, said failure being contrary to community standards and Respondent's policies and procedures, and the same being contrary to law. 14. That Petitioner’s representative reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: a. b. The resident was originally admitted to the facility on April 7, 2005. Medical diagnoses included osteoarthritis, depression, Alzheimer's disease, general muscle weakness, and dysphagia. The most recent minimum data set, dated June 10, 2013; included the following: i. Section G documented the resident was total dependent upon one person physical assistance for toileting and personal hygiene and bed mobility. ii. Section M documented the resident had two stage II pressure ulcers. A care plan, last updated June 12, 2013, documented under “Problem” that the resident had a stage II pressure ulcer to the resident's left buttock. A "Weekly Wound Documentation" sheet documented on June 11, 2013, that the coccyx wound was measured to be 1.7cmx1.7emx0.1cm, and documented the wound as being a stage II pressure ulcer. A weekly wound measurement of July 2, 2013 documented the wound measured to be 1.2cmx0.7cmx0.3cm. A weekly wound measurement of July 9, 2013 documented the wound measured to be 4.0cmx4.1cmx with "unstageable tissue damage." 15. That on July 11, 2013 commencing at approximately 10:20 am., Petitioner’s representative observed resident number one (1) and interacted with Respondent’s caregivers, and noted as follows: a. The resident was observed lying in bed. b. There was a strong odor of feces that was noted at first in the hall and persisted outside of the resident's room. c. Petitioner’s representative knocked on the door, and Respondent’s employee “A” opened the door and stated that she was the certified nurse assistant (CNA) that was assigned to the resident and was going to render incontinence care to the resident. d. The resident made no attempt to verbalize, with eyes were closed and both arms appearing contracted. e. The resident was lying on the left side to reveal a moderate amount of stool. f. Approximately one inch up from the stool, a soiled gauze dressing that was not attached to the resident's skin on the bottom was dangling, and had another piece of gauze protruding from underneath that appeared heavily soiled with drainage and brown discoloration on the edges. g. Employee “A” was observed to cleanse the stool using upward strokes, repeatedly using the same soiled cloth and cleansing upward from the resident's anal area toward the wound that was not protected by the dressing. h. After removing the stool, using the one soiled wash cloth, she then dried the area with a towel. 16. That Petitioner’s representative interviewed at approximately 10:45 am. on July 11, 2013, Respondent’s employee “B” regarding resident number one (1) and the employee indicated as follows: The certified nursing assistant did not tell her anything about the resident or any concerns that should have been reported to the nurse after she rendered incontinence care. Certified nursing assistants are expected to notify the nurse to "Check their skin" during incontinence care. 17. That on July 11, 2013 commencing at approximately 12:00 p.m., Petitioner’s representative observed resident number one (1) and interacted with Respondent’s caregivers, and noted as follows: a. Respondent’s Unit Manager assisted with re-positioning the resident onto the right side so that the surveyor could observe the resident's coccyx area. The unit manager stated that the nurse had gone on break, and that no one had told her about any problem with the resident's dressing. She washed her hands and gloved. The soiled, partially attached dressing remained in place, now one hour and forty minutes after Employee “A” was observed to give the resident incontinence care and had observed that the dressing to the pressure ulcer was no longer intact. The bottom half of the outer dressing remained unsecured to the skin, and a gauze dressing protruding underneath was saturated with yellow drainage, and dots of darker brown substance on the edges. The unit manager was asked to remove the dressing so the surveyor could view the wound. g. The top adhesive part of the dressing was attempted to be removed by the unit manager, but only came loose with difficulty, and then the skin underneath was noted to be bright red and very fragile. h. The unit manager stated that she would make the wound care nurse aware and the dressing would be changed. 18. That Petitioner’s representative interviewed at approximately 1:15 p.m. on July 11, 2013, Respondent’s wound care nurse regarding resident number one (1) and the employee indicated as follows: a. The unit. manager had informed her of the problem with the resident's dressing. b. She confirmed that the dressing should be maintained to be intact at all times, and if it becomes dislodged, then the nurse, or the treatment/wound care nurse should be notified immediately. c. She confirmed that exposing the wound to fecal contamination can cause delayed healing or worsening of the wound. d. She stated that she had created a larger dressing so that the adhesive would not be in contact to the fragile skin. e. She confirmed that she had re-measured the wound on July 9, 2013, and notified the physician and the family that the wound had tripled in size within one week's time. 19. That Petitioner’s representative interviewed at approximately 2:40 p.m. on July 11, 2013, Respondent’s employee “D” regarding resident number one (1) and the employee indicated as follows: a. He is employed by the facility as a nurse, and most recently he has been a treatment and wound care nurse, although he has taken resident assignments as well. b. When asked what his expectations would be if a certified nursing assistant performed bowel incontinence care and observed that a dressing had become open or dislodged within the area of the bowel incontinence, he replied "I would expect them to clean the resident and them come to me immediately and let me know. If the dressing is open then that makes the wound susceptible to cross contamination, and maybe infection, and worsening of the wound. If it is coming off, then it is not going to be an effective dressing. The dressing should be secured on all sides of the wound to protect it and allow healing.” c. He also stated that the certified nursing assistant should not be wiping the feces toward the open wound to avoid bacterial contamination that could cause infection, impair healing, and worsen the pressure ulcer. 20. That Petitioner’s representative reviewed during the survey Respondent’s policy and procedure entitled "Diarrhea and Fecal Incontinence," last revised 8/11, and noted the following provisions: a. Step 6: "Wipe feces from the resident's skin." b. Step 11. "When evaluating the condition of the resident's skin, note the following ... c. Pressure ulcers." 21. That the above reflects Respondent’s failure to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, failed to follow ensure that incontinent care was provided to assure that no contamination of wounds occurs, to ensure incontinent care includes checks for skin condition and prompt attention given to presented issues, such as loose and soiled bandages, and to ensure effective bandaging of wounds to minimize risk of infection or contamination. 22. That the Agency determined that this deficient practice has compromised the resident’s ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency, 23. That Respondent was cited for an isolated Class II deficient practice. 24, That the fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. Section 400.23(8)*b), Florida Statutes (2013). 25. That Respondent was cited for a Class II deficient practice during a survey of June 4, 2013. See Attachment “A,” attached hereto and incorporated herein by reference. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of five thousand dollars ($5,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(b), Florida Statutes (2013). COUNT II 26. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 27. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part II of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2013). WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2012) commencing July 11, 2013. Respectfully submitted this t day of August, 2013. f J. Walsh IL, Esquire Flag Bar. No. 566365 Agency for Health Care Admin. 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 727.552.1947 (office) DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the right to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: The Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, Florida, 32308, (850) 412-3630. RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. 10 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been served by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 8990 on August » 2013 to Jacqueline F. Hurt, Administrator, Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center, 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and by Regular U.S. Mail to David R. Vaughan, Registered Agent for Senior Care Group, Inc., 1240 Marbella Plaza Drive, Tampa, Florida 33619. alsh, II, Esquire Copies furnished to: Patricia R. Caufman, FOM Jonathon S. Grout, Esq. Counsel for Petitioner P.O. Box 875 Cape Canaveral, Florida 32931 11 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013007612 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3) ___—Ss— I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(i), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees, License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) Thereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. ACHA No. 2013010196 License No. 1282096 SENIOR CARE GROUP, INC. d/b/a File No. 62921 _ LAKESHORE VILLAS HEALTH CARE CENTER, Provider Type: Nursing Home Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to impose administrative fines in the amount of $10,000.00, impose conditional licensure, and to impose survey fees of $6,000.00 with a 6 month survey cycle based upon Respondent being cited for one State Class I deficiency. PARTIES 1. The Agency is the licensing and regulatory authority that oversees skilled nursing facilities (also called nursing homes) and enforces the state statutes and rules governing such facilities. Ch. 408, Part I, Ch. 400, Part II, Fla. Stat; Ch. 59A-4, Fla. Admin. Code. The Agency is authorized to deny, suspend, or revoke a license, and impose administrative fines pursuant to sections 400.121, and 400.23, Florida Statutes, assign a conditional license pursuant to subsection 400.23(7), Florida Statutes, and assess costs related to the investigation and prosecution of this case pursuant to section 400.121, Florida Statutes EXHIBIT 1 2. The Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 3. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 4. Under Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities, and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with tules as adopted by the agency. § 400.022(1), Fla. Stat. (2013). 5. Under Florida law, every licensed facility shall comply with all applicable standards and rules of the agency and shall maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner. § 400.141(1)(h), Fla. Stat. (2013). 6. Under Florida law, a complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1) Reviewed no less than once every 3 months; 2) reviewed promptly after a significant change in the resident’s physical or mental condition; 3) revised as appropriate to assure the continued accuracy of the assessment. Rule 59A-4.109(1)(c), Florida Administrative Code. 7. The Agency re-alleges and incorporates paragraphs one (1) through three (3), and Count I of this Complaint as if fully recited herein. 8. On or about August 13, 2013, the Agency conducted a complaint survey of the Respondent. 9. That based upon observation, interviews, and the review of records, Respondent failed to ensure resident rights to dignity where Respondent failed to respect the right to a dignified transfer process and a dignified quality of life for a sole resident currently residing in a facility with revoked Medicaid and Medicare certification. 10. That resident number one (1) was transferred into the Respondent facility after the facility transferred out all prior residents under the supervision of the Agency. 11. That resident number one (1), who was eighty-nine (89) years old, was the sole resident living in the facility at the time of this investigation. 12. That Petitioner’s representative observed resident number one (1) on August 13, 2013, sleeping on a mattress on the floor, covered with a sheet in room 111, a private room. There were no signs of incontinence. 13. That resident number one (1) was the only resident in the entire facility and the entire 179 bed facility was dark with closed rooms and common areas, except the small area of the 100 hall where the resident was residing. 14. That there was one licensed practical nurse giving the resident medications, one aide caring for the resident, and the interim Director of Nursing was seated at the desk. 15. That there was no sign on the door and no specific personal protection equipment indicating a need for isolation requiring a private room. 16. That Petitioner’s representative interviewed Respondent’s corporate nursing home administrator who indicated the following related to resident number one (1): a. 17. The resident was receiving one-on-one care and the resident’s activities included fishing in the pond in the front of the facility. The resident was admitted from a “sister” facility when the resident lost funding for Medicaid. This facility offered to “forgo” the private pay fees. The facility planned to transfer the resident back to the prior facility in “about a month.” The facility was able to offer the resident a private room and the resident “needed” a private room, but was unable to explain why. That Petitioner’s representative reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: a The facility face sheet revealed the resident had an admitting diagnosis of senile dementia. Other diagnoses listed included: late effects of cardiovascular disease/dysphasia, hypertension, BPH (benign prostate hypertrophy), anxiety state, hyperlipidemia, osteoporosis, history of UTI (urinary tract infection), coronary artery obstruction with infarct, and a history of falls. The billing section of the facility face sheet documented the resident was private pay. Medicaid and Medicare numbers were listed. The responsible party listed an adult child. A primary physician was listed. Current physician’s telephone orders stated to give “high calorie shakes q (every) dinner.” h. The resident’s weight on admission was 134.0 pounds, and the resident was 67 inches tall. i. It was unknown if the resident had lost weight since the transfer to this facility one week prior. 18. That Petitioner’s representative reviewed Respondent’s policy entitled “Charity Care,” signed on August 5, 2013, after Respondent’s transfer and discharge of all prior residents, including eight (8) or more private pay residents, and noted as follows: a. Under the section “Eligibility”, the facility policy stated that an “unpaid account balance will be considered for write off as charity care or adjustment based on demonstrated need for financial assistance.” b. “Medicaid eligible residents who are currently eligible for benefits, but were not eligible at the time of service, will automatically qualify for charity care at the appropriate level”. 19. That Respondent admitted resident number one (1) on August 6, 2013, after it had successfully discharged all of the residents on August 2, 2013, including both publically funded (Medicaid and Medicare) and private pay residents. 20. That Petitioner’s representative observed resident number one (1) on August 13, 2013 commencing at 11:45 A.M. and noted as follows: a. The resident was brought into the dining room by the aide. b. The resident was served a regular diet consisting of: grilled cheese sandwich, soup, ice cream, cake, juice, and milk. c. The aide removed the crusts from the sandwich and placed it in front of the resident. 21, . The resident required verbal cues to take a bite, and refused the soup. . The resident did not consume much of the lunch, less than 50%. The aide said the resident had snacks earlier. . The resident said “hello” to the surveyor, but other responses were incoherent, though the resident did state that the resident was “not doing well,” but could not elaborate why. . The resident was seated in a wheelchair with bilateral leg splints on, covered with shoes, was clean and dry, and without evidence of incontinence. That Petitioner’s representative interviewed Respondent’s social worker related to resident number one (1) on August 13, 2013 at 11:40 A.M. and again at 2:00 P.M. and noted as follows: She had been the Business Office Manager at the sister facility, where the resident came from. . She knew the power of attorney for the resident from that position. She was promoted to social worker about one half years ago, and had worked for the corporation for about five (5) years. . When asked about the details of the transfer of the resident to this facility, the social worker stated that she received a call from the Corporate nursing home administrator and was asked to identify residents at the resident’s prior facility that were listed as either “Medicaid pending” or private pay. When asked to see if there was anyone interested in transferring to this facility,” she identified the resident because the resident’s Medicaid ended the end of July, 2013, and was pending for August, 2013. She did not recall the date of the call from the nursing home administrator, but thought it might have been August 5, 2013, three days after the discharge of all the residents on August 2, 2013. g. She did not know why the resident lost Medicaid benefits. h. She recalled that someone asked the state agency that processes benefits to please advise about the loss of benefits and she got a response that a Financial Release form was not received within sixty (60) days. i. She did not know who would have been responsible at the prior facility. j- The sister facility, where the resident had resided, had a social worker that was no longer there. k. She was now sending a list of forms to the adult child of the resident that were needed for Medicaid benefits to be reestablished. |. She thought the process took three (3) to four (4) weeks. m. When asked for a date when the process of reapplication started, she did not remember, but then stated an e-mail went out on August 5, 2013. n. When asked if the resident was the only one that fit the transfer criteria, she stated that there were others but resident number one (1) was the only one not receiving Skilled Services. o. When asked if there were plans to admit other residents to the facility, the social worker stated “no.” p. When asked what the facility transfer benefit to the resident was, the social worker stated she did not know. 22. That “Skilled Services” is a Medicare term used to define a specific group of medically necessary therapies that include physical therapy, occupational therapy, and speech therapy. 23. That Petitioner’s representative noted in the medical records of resident number one (1) a physician’s telephone order dated August 6, 2013 at 10:56 A.M., the day the resident was admitted to the facility, directing to discontinue physical therapy services, a skilled service. It was signed by an unknown provider. 24. That Petitioner’s representative reviewed a form provided to the surveyors and a copy of an email dated August 5, 2013, and noted as follows: a. 25. The email dated August 13, 2013 at 11:26 A.M. from an Adult Economic Services worker to the social worker stated to send encrypted emails only and contained an attached file and a link to access accounts. At the bottom of the printed email is another email dated August 5, 2013 from this social worker inquiring about the status of resident number one (1). A second page, stapled to the email trail, is a “Provider Inquiry Sheet”. Under client name, the entry included the first name and last initial of resident number one (1). The column titled “Main Inquiry Reason” contained and entry stating "Coverage Inquiry/SOC amount." The column titled "Provider Question" stated “The Business office has notified me that [resident number one (1)’s] coverage will end on July 31, 2013. Please advise why and if we can reapply for [gender pronoun] (not the gender of resident number one [1]) ICP Benefits [as] is Long Term Care resident requires custodial care.” The far right hand column stated “Please reapply as we didn’t get a recent financial release form within 60 days from the date of application (5/6/13).” That Petitioner’s representative telephonically interviewed the adult child of, and also the power of attorney for, resident number one (1) on August 13, 2013 at 1:05 P.M. and noted as follows: a. The adult child stated “nothing was said” about the billing during the transfer process from the resident’s prior facility. b. The adult child stated twice that the child had no concerns with care at the prior facility. c. The resident had no medical conditions that required a private room, and was in a three bed ward at the prior facility. d. The adult child was approached at the prior facility by the social worker, the same one that is at this facility, and asked about moving the resident to this facility. e. The adult child was told the resident would receive one-on-one staffing care, a private room, and was told the resident was the “only one there.” f. The adult child expected the resident to be in this facility “about one month” and then would go back to the prior facility. g. The resident was “in [] own world” (mentally) and went “up and down the halls” in the prior facility. h. The adult child was asked to bring in some documents today, August 13, 2013, for the Medicaid application. i. The adult child thought that the child had faxed in something a few months ago to the other facility and did not have any other information. j. There was no financial arrangement with this facility and the adult child was not expecting a bill. k. The facility asked for Social Security information today and the adult child was looking for it. 26. The adult child confirmed that the resident did not need a private room medically and was “just old,” about to turn 90 years old. . The adult child did not know if the resident had a different physician. The adult child did not know why the Medicaid was discontinued at the prior facility, had no Medicaid phone number, no workers name, and was unfamiliar with how to contact them. That Petitioner’s representative further reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: 27, a. b. The resident had a consent to treat form, dated August 6, 2013 at 11:45 am. Verbal permission was given by telephone from the resident’s adult child/ power of attorney. A “Do Not Resuscitate” form was dated November 27, 2012. A Statement of Incapacity was dated March 28, 2012. Power of attorney paperwork listed the adult child. A physician’s telephone order dated August 6, 2013 at 10:56 a.m., the day of the transfer, stated to discontinue Physical Therapy. There was no further information regarding why the resident was receiving these services. A telephone order dated August 8, 2013, stated to discontinue a Wanderguard that had been used related to elopement risk. There were no further details as to whether the elopement behaviors continued. An unsigned copy of the new physician’s orders was in the chart dated August 6, 2013 That the long term care unit, where resident number one (1) currently resided, was as follows: a. Two of the three hallways had rooms dark, doors closed, and hallway lights dimmed. b. Other areas of the facility, a large single story building with 179 beds, had darkened, cavernous hallways, and a rehabilitation dining area between two long term care units was dark, and contained plastic covered equipment on the tables. c. The building was clearly empty, other than this one resident and the three staff members on the unit for the resident in room 111. 28. ‘That later in the day on August 13, 2013, Respondent’s director of nursing stated that the new physician had not visited the resident at this facility; the physician at the prior facility did not come to this facility; and therefore the resident had to change physicians. 29. That on or about August 13, 2013, Petitioner’s representative reviewed a physician’s progress note, dated August 1, 2012, which revealed that resident number one qd) was unable to participate in the MMSE screening tool as the resident’s dementia was too far advanced 30. That Petitioner’s representative interviewed Respondent’s director of nursing and nursing home administrator regarding resident number one (1) on August 13, 2013 at 2:26 P.M. and noted as follows: a. When asked how the resident came to be admitted the facility, the administrator stated the last resident was discharged under Agency oversight on August 2, 2013, and she was on her way back to the corporate office when she received a call from corporate counsel that the facility could accept private pay residents. b. The administrator was notified that the facility would be accepting a private pay resident on August 5, 2013 from a sister facility. 31. The administrator indicated the resident had lost Medicaid and was moved to Medicaid pending as the family had not provided paperwork on time. . The administrator indicated that the corporation had the idea that as it litigated the license for this facility, it could assist this family with long term care costs, and assist this facility while it litigated its license. When asked if it was the facility's intention to have only one resident, the administrator stated that it would like to admit more, but it “took the one resident.” When asked if she felt it was an advantage to the facility during litigation to have a resident at the facility, the administrator shrugged and stated that she did not know. When asked if this facility was recruiting residents from external sources such as hospitals, the administrator stated “no.” When asked about the financial arrangements with the resident, the administrator they were preventing the resident’s discharge or the family incurring large debt. The administrator indicated that the charitable policy was not offered to other residents at the sister facility because they were able to fill the beds. The resident would have received a 30 day notice had the resident had stayed in the sister facility. . When asked if the administrator was aware if the sister facility provided services in a timely manner to maintain the resident’s Medicaid eligibility, the administrator stated that she was not aware of the responsibility of the sister facility staff related to the process. That Petitioner’s representative telephonically interviewed the physician of 12 resident number one (1) on August 13, 2013 at 2:45 P.M. and noted as follows: 32. a. b. He had not visited the resident since the resident’s admission on August 6, 2013. He made rounds on Wednesday and intended to see the resident on August 14, 2013. He was aware that the physician’s orders were not signed yet. The physician stated that the advanced registered nurse practitioner had seen the resident on an unknown date and they were trying to locate a progress note. That there was no note in the medical record of resident number one (1) which would indicate that the resident had been seen in this facility by either a Physician or a Nurse Practitioner. 33. That Petitioner’s representative observed resident number one (1) on August 13, 2013 commencing at 2:40 P.M. and noted as follows: 34, a. The resident was in the hallway of the resident’s room, near the dining room, scooting the wheelchair with feet. The resident was using the hand rail on the left side to assist. An aide was nearby. The resident was confused with a vacant look to the face and eyes and did not respond to the surveyor's questions. The resident was unable, due to confusion, to express any anxiety, a diagnosed disorder, anguish, or satisfaction that the resident felt related to the new surroundings, new staff, and isolation due to the lack of any peers nearby. That on or about August 16, 2013, the Agency received and reviewed an eighty- six (86) page faxed document from Respondent and noted that page thirty-nine (39) was from a Multiple Data Set document, dated August 14, 2013, which stated “Factors that can Exacerbate Behavior” that contained four items checked: "Sleep Disturbances; Frustration due to problem communicating discomfort or unmet needs; Frustration, agitation R/T (related to) needs to urinate or have BM; Recent change, such as new admission, new unit, new care staff, withdrawal from a treatment program; and need for repositioning". 35. Since the resident had been moved to a new facility, had new caregivers, new surroundings, and a new physician, any of these factors could contribute to an unexpected decline. 36. That the above reflects Respondent’s failure to ensure resident rights to dignity where, inter alia, Respondent failed to respect the right to a dignified transfer process and a dignified quality of life for one of the residents currently residing in a facility with revoked Medicaid and Medicare certification including but not limited to the absent of socialization with peers, the failure to provide skilled services, the failure to ensure timely physician transfer and evaluation, the failure to note and address care and services related to new surroundings, staff, and withdrawn treatments. 37, That under Florida law, a Class I deficiency is a deficiency that the agency determines presents a situation in which immediate corrective action is necessary because the facility’s noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in a facility. The condition or practice constituting a class I violation shall be abated or eliminated immediately, unless a fixed period of time, as determined by the agency, is required for correction. § 400.23(8)(a), Fla. Stat. (2013). 38. That a class I deficiency is subject to a civil penalty of $10,000 for an isolated deficiency, $12,500 for a patterned deficiency, and $15,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine must be levied notwithstanding the correction of the deficiency. § 400.23(8)(a), Fla. Stat. (2013). 39. The Respondents actions or inactions constituted an isolated Class I violation. 40. The Agency cited the Respondent for a class I violation. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of ten thousand dollars ($10,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(a), Florida Statutes (2013). COUNT II 41. The Agency re-alleges and incorporates paragraphs one (1) through three (3), and Count I of this Complaint as if fully recited herein. 42. That Respondent has been cited with one (1) State Class I deficiency and therefore is subject to a six (6) month survey cycle for a period of two years and a survey fee of six thousand dollars ($6,000) pursuant to Section 400.19(3), Florida Statutes (2013). WHEREFORE, the Agency intends to impose a six (6) month survey cycle for a period of two years and impose a survey fee in the amount of six thousand dollars ($6,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to Section 400.19(3), Florida Statutes (2013). COUNT Il 43. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 44. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part II of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2012). 1S WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2013). CLAIM FOR RELIEF WHEREFORE, the Petitioner, State of Florida, Agency for Health Care Administration, seeks a final order that: 1. Makes findings of fact and conclusions of law in favor of the Agency. 2. Imposes the relief sought in the Administrative Complaint. Respectfully submitted on this / / day of October, 2013. ; a ff a Thomag/J/Walsh Il, Esquire Florida Bat No. 566365 Office of the General Counsel Agency for Health Care Administration 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 Telephone: (727) 552-1525 Facsimile: (727) 552-1440 walsht@myflorida.ahca.com DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the ri ght to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: The Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, Fi Torida, 32308, (850) 412-3630. RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has be: ed by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 9133 on October / /__, 2013 to Counsel for Petitioner, Anna G. Small, Esq., Allen Deli, P.A., 202 South Rome Avenue, Tampa, Florida 33606. Thomas J. Walsh, Il, Esquire f ye Copies furnished to: Patricia R. Caufman, FOM 17 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013010196 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)__—S—I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) Thereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION LAKESHORE VILLAS HEALTH CARE CENTER, Petitioner, vs. STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. a STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. Case No. 13-395PH AHCA No. 2013005471 ACHA No. 2013006461 ACHA No. 2013006462 EXHIBIT 2 STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS, SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent, STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS. ; SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, — Respondent. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC, d/b/a LAKESHORE VILLAS HEAL TH CARE CENTER, Respondent. SETTLEMENT AGREEMENT DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its undersigned representatives, and Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Lakeshore”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, Lakeshore is a nursing home licensed pursuant to Chapters 400, Part II, and 408, Part II, Florida Statutes, Section 20.42, Florida Statutes and Chapter 59A-4, Florida Administrative Code; and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Lakeshore, pursuant to Chapters 400, Part II, and 408, Part II, Florida Statutes; and WHEREAS, the Agency served Lakeshore with a Notice of Intent to Deny dated May 22, 2013, in Agency case number 2013005471, notifying Lakeshore of the Agency's intent to deny the application for renewal of licensure for Lakeshore; and WHEREAS, the Agency completed a survey of Lakeshore and its Facility on or about April 12, 2013, (hereinafter “April Survey”), during which deficient practice was cited; and WHERMUAS the citation of the above referenced deficient practice subject Lakeshore to the imposition of administrative sanctions of one thousand dollars ($1,000.00) and the imposition of conditional licensure commencing April 12, 2013, in Case Number 2013006461; and WHEREAS, the Agency completed a survey of Lakeshore and its Facility on or about June 4, 2013, (hereinafter “June Survey”), during which deficient practice was cited; and WHEREAS the citation of the above referenced deficient practice subject Lakeshore to the imposition of administrative sanctions of one thousand dollars ($1,000.00) and the continued imposition of conditional licensure in Case Number 2013006462; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about July 26, 2013, in Agency case number 2013006534, notifying Lakeshore of the Agency’s intent to impose administrative sanctions of two thousand five hundred dollars ($2,500.00) and the continued imposition of conditional licensure; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about August 9; 2013, in Agency case number 2013007612, notifying Lakeshore of the Agency's intent to impose administrative sanctions of five thousand dollars ($5,000.00) and the continued imposition of conditional licensure; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about October 16, 2013, in Agency case number 2013010196, notifying Lakeshore of the Agency’s intent to impose administrative sanctions of ten thousand dollars ($10,000.00), the imposition of a six-month survey cycle and its six thousand dollar ($6,000.00) fee, and the continued imposition of conditional licensure; and WHEREAS, Lakeshore requested a formal administrative proceedings by selecting Option “3” on the Election of Rights form or by the filing of a Petition in Case Numbers 2013005471, 2013006534, 2013007612, and 2013010196; and WHEREAS, the parties have negotiated and agreed that the best interest of all the parties will be served by a settlement of this proceeding; and WHEREAS, Lakeshore has sought inactive licensure for its license, license number 1282096; and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: 1, All recitals herein ave true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Upon full execution of this Agreement, Lakeshore agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited {o, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120,57(1), Florida Statutes, appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court of competent jurisdiction; and agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which they may be entitled, provided, however, that no agreement herein shall be deemed a waiver by the parties of their right to judicial enforcement of this Agreement. Lakeshore specifically waives the necessity of the drafting of or service of an Administrative Complaint(s) for the relief stipulated to in this Agreement as the same relates to the April Survey and June Survey. 4. Upon full execution of this Agreement, the parties agree as follows: a. Lakeshore shall pay nineteen thousand five hundred dollars ($19,500.00) in administrative fines and a survey fee of six thousand dollars ($6,000.00), for a total monetary assessment of twenty-five thousand five hundred dollars ($25,500.00) to the Agency within thirty (30) days of the entry of the Final Order. Respondent also accepts the imposition of a six-month survey cycle and conditional licensure status commencing April 12, 2013. b. Lakeshore shall ensure that, on or before October [, 2014, an independent purchaser not affiliated with Lakeshore shall file a “Change of Ownership” application seeking the licensure currently held by Lakeshore. Lakeshore shall ensure any such applicant possess, at a minimum, the following qualifications: i. The applicant, or a controlling interest’ of the applicant, shall have been licensed, or be a controlling interest in an entity or entities which has been licensed, to operate a nursing home in the State of Florida pursuant to the provisions of Chapters 400, Part II, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code, for a continuous period of at least three (3) years prior to the filing of the application. ii. The nursing home or nursing homes of the applicant, or the nursing home or nursing homes in which the controlling interest of applicant are licensed as nursing home(s) or in which the controlling interest of applicant holds a - controlling interest in the licensed nursing home(s), shall not have been subject to a Class | or a widespread Class II deficient practice” within a three (3) year period predating the filing of the application for “Change of Ownership” licensure. c. Effective at 5:00 p.m., December 31, 2014, the nursing home license of Lakeshore, license number 1282096, shall be deemed relinquished and cancelled, unless the Agency has issued a "Change of Ownership” license to another person or entity to operate the facility. This date may be extended in the sole discretion of the Agency. Absent such extension, the licensure of Lakeshore shall be deemed relinquished and ‘ “Controlling Interest,” as utilized herein, means as defined in Section 408.803(5), Florida Statutes (2013). 2 “Patterned and widespread Class 1 and Class Il deficient practices” are defined in Section 400,23(8), Florida Statutes (2013). cancelled without regard to the'status, substantive or legal, of any pending licensure application related to the license currently held by Lakeshore, 5. Venue for any action brought to enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie in Circuit Court in Leon County, Florida. 6. By executing this Agreement, Lakeshore denies, and the Agency asserts the validity of the allegations raised in the administrative complaints and the Surveys referenced herein. No agreement made herein shall preclude the Agency from imposing a penalty against Lakeshore for any deficiency/violation of statute or rule identified in a future survey of Lakeshore, pursuant to the provisions of Chapters 400, Part II, 408, Part II, Florida Statutes, and Chapter S9A-4, Florida Administrative Code. In said event, Lakeshore retains the right to challenge the factual allegations related to the deficient practices/ violations alleged in the instant cause. 7. Lakeshore acknowledges and agrees that this Agreement shall not preclude or estop any other federal, state, or local agency or office fiom pursuing any cause of action or taking any action, even if based on or arising from, in whole or in part, the facts raised in the administrative complaints or Surveys, This agreement does not prohibit the Agency from taking action regarding Lakeshore’s Medicaid provider status, conditions, requirements or contract. 8. Upon full execution of this Agreement, the Agency shail enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled cases, 9. Each party shall bear its own costs and attorney’s fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. Lakeshore for itself and for Lakeshore’s related or resulting organizations, successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the State of Florida, Agency for Health Care Administration, and its agents, representatives, and attorneys of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative foram, including any claims arising out of this agreement, by or on behalf of Lakeshore or related facilities. 12. This Agreement is binding upon all parties herein and those identified in paragraph eleven (11) of this Agreement. 13. In the event that Lakeshore was a Medicaid provider at the subject time of the occurrences alleged in the complaint herein, this settlement does not prevent the Agency from secking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule 59G-9,.070, Florida Administrative Code. 14, Lakeshore agrees that if any funds to be paid under this agreement to the Agency are not paid within thirty-one (31) days of entry of the Final Order in this matter, the Agency may deduct the amounts assessed against Lakeshore in the Final Order, or any portion thereof, owed by Lakeshore to the Agency from any present or future funds owed to Lakeshore by the Agency, and that the Agency shall hold a lien against present and future funds owed to Lakeshore by the Agency for said amounts until paid. 15. The undersigned have read and understand this Agreement and have the authority to bind their respective principals to it. 16. This Agreement contains and incorporates the entire understandings and agreements of the parties, 17, This Agreement supersedes any prior oral or written agreements between the parties, 18. This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 19. All parties agree that a facsimile signature suffices for an original signature. The following representatives hereby acknowledge that they are duly authorized to enter into this Agreement, Health Quality Assurance Agency for Health Care Administration 2727 Mahan Drive, Building #1 Tallahassee, Florida 32308 DATED: 3 [vs Im F, Williams, General Counsel Office of the General Counsel Agency for Health Care Administration 2727 Mahan Drive, MS 43 Tallahassee, Florida 32308 Florida Bar No, 670731 DATED: 2G Anna Small, Esquire Allen Dell Counsel for Respondent 202 South Rome Avemue, Suite 100 Tampa, FL 33606 Florida Bar No. 17064 DATED: x04 Title: Name: Katherine idle 7s) Senior Care Group, Inc. DATED: _.3//i fl ¢ 4 7 y ff Thomas J. Walsh IJ, Senior Attorney Office of the General Counsel Agency for Health Care Administration 525 Mirror Lake Drive North, Suite 330G St. Petersburg, Florida 33701 Florida Bar No. 566365 DATED: 5//Z, 7 !
Conclusions DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 Having reviewed the Administrative Complaints and Notices of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Notices of Intent to Deny and Election of Rights forms to Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center. (Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1, The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Notice of Intent to Deny is superseded by this Agreement. 3. Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center shall pay the Agency $25,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 4. Conditional licensure status is imposed on Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center beginning on April 12, 2013. ORDERED at Tallahassee, Florida, on this 22 day of Mace 2014, Dp Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to 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 of 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. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this 3 ay of ore ‘A 2014, Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Thomas J. Walsh II 1 Anna G. Small, Esq. Office of the General Counsel Allen Dell, P.A. Agency for Health Care Administration 202 South Rome Avenue (Electronic Mail) Tampa, Florida 33606 (U.S. Mail) Linzie F. Bogan Lynne A. Quimby-Pennock Administrative Law Judge Administrative Law Judge Division of Administrative Hearings Division of Administrative Hearings (Electronic Mail) (Electronic Mail) aA DECOY 7] Certified Article Number 7256 9008 Will see W925 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION aaa Better Health Care for all Floridians SEA ORETARY. EK May 22, 2013 ADMINISTRATOR minty RECERVED LAKESHORE VILLAS HEALTH CARE CENTER C!LIFY INTAKE UnpLICENSE NUMBER: 1282096 16002 LAKESHORE VILLA DR we FILE NUMBER: 62921 TAMPA, FL 33613 MAY & 2043 CASE #: 2013005471 Agency for Health NOTICE 6f INFENTIO.DENY Dear Ms. Johnson: It is the decision of this Agency that Lakeshore Villas Health Care Center’s license renewal application for a nursing home be DENIED. The specific basis for the Agency’s decision is based on the following grounds: e Pursuant to section 400.121(3)(d), F.S., the Agency shail revoke or deny a nursing home license for two class I deficiencies arising from separate surveys within a 30 month period. Lakeshore Villas Health Care Center was cited for Class I deficiencies on October 13, 2011 and November 14, 2012. e — Section 408.815(1), F.S., states that in addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license or change of ownership application include any of the following actions by a controlling interest: (a) a violation of this part, authorizing statutes, or applicable rules; and (d) a demonstrated pattern of deficient performance. EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Agengy for Y) Adminjstraty Z j /¢. Berard E. Hudsda, Manager Long Term Care Unit ce: Agency Clerk, Mail Stop 3 EXHIBIT 1 Visit AHCA online at ahca.myflorida.com 2727 Mahan Drive,MS#33 Tallahassee, Florida 32308 FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RICK SCOTT GOVERNOR July 8, 2013 LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR . TAMPA, FL 33613 Dear Administrator: ELIZABETH DUDEK SECRETARY RECEIVED GENERAL COUNSEL JUL 12 2013 Agency for Health Care Administration The attached license with Certificate #18248 is being issued for the operation of your facility. Please review it thoroughly to ensure that all information is correct and consistent with your records. If errors or omissions are noted, please make corrections on a copy and mail to: Agency for Health Care Administration Long Term Care Section, Mail Stop #33 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Issued for status change to Conditional. Sincerely, Fracey Weathewpeoan for Kathy Munn Agency for Health Care Administration Division of Health Quality Assurance Enclosure cc: Medicaid Contract Management 2727 Mahan Drive, MS#33 Tallahassee, Florida 32308 Visit AHCA online at ahca.myflorida.com CERTIFICATE #: 18248 LICENSE #: SNF1282096 State of Florida AGENCY FOR HEALTH CARE ADMINISTRATION DIVISION OF HEALTH QUALITY ASSURANCE NURSING HOME CONDITIONAL This is to confirm that SENIOR CARE GROUP, INC. has complied with the rules and regulations adopted by the State of Florida, Agency For Health Care Administration, authorized in Chapter 400, Part I, Florida Statutes, and as the licensee is authorized to operate the following: LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR TAMPA, FL 33613 TOTAL: 179 BEDS ~ STATUS CHANGE EFFECTIVE DATE: 06/04/2013 EXPIRATION DATE: 06/29/2013 ary fy Assurance
The Issue Whether or not the Respondent properly denied Petitioner's application for examination as a nursing home administrator.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, posthearing memoranda, and the entire record compiled herein, the following relevant facts are found. Petitioner, Mary Harrison, filed an application to sit for the examination as a nursing home administrator on approximately May 28, 1981, based on her belief that she satisfied the prerequisite for examination as required by Rule Chapter 21Z-11.01, Florida Administrative Code. In a cover letter with her application dated May 28, 1981, Petitioner asserted her position that she satisfied the above requirements by stating that she was over 18 years of age; was a high school graduate; had completed two (2) years of college level studies which prepared her for health administration, in that she held a master's degree in public administration (a program designed for administration in the field of human services with a specialty in human resource management) ; was of good moral character and possessed four (4) years experience in nursing home and two and one half (2 1/2) years experience at Hospice in a management/administrative capacity. 3/ Petitioner's application was preliminarily denied by letter dated July 6, 1981, from the Board on the grounds that Petitioner's degree in public administration was not in the field of health care administration as required by Rule 21Z-11.07, Florida Administrative Code, and additionally, that Petitioner's experience "did not appear to demonstrate that for four (4) years (she) had been in a position of control and administration as needed to fulfill the requirements of Rule 21Z-11.09, Florida Administrative Code Petitioner attended a subsequent Board meeting where her application was considered on July 24, 1981, and she was afforded an opportunity to present a more detailed description of her executive and management responsibilities for its (the Board's) consideration. The Board again denied Petitioner's application, which denial was memorialized in a letter dated July 27, 1981, and cited, as basis for the denial, that Petitioner failed to show that her responsibilities and experience involved the total health services as required by Rule 21Z-11.09, Florida Administrative Code. Petitioner was advised, in that letter, that she may request a hearing which resulted in the instant proceeding before the Division by a letter of transferal from the Board on August 27, 1981. During the four (4) year period from 1976 through 1980, Petitioner was employed as the Director of Social Services at the Boca Raton Convalescent Center, Boca Raton, Florida. The Center is a nursing home. Petitioner's responsibilities included coordination of admissions and discharges, individual and family counseling, development of social work internship programs with the Florida Atlantic University School of Social Welfare and the training and supervision of social work interns who were involved in the Reality Orientation Program. Petitioner's supervision only included social workers and interns in her department and she was not responsible for employees in other departments of the facility. Petitioner participated in what has been described as a team- management system at the Center. Petitioner's involvement in that system included discussions of various courses of action in the interviewing of employees by a search committee which consists of a group of department heads and the Center's administrator. Petitioner did not sign contracts or purchase orders for any services or supplies; she did not sign checks or make any decisions affecting the employment of the staff at the Center such as hiring, firing, layoff, recall suspension or the imposition of disciplinary sanctions. The accounting decisions for the Center were made at a regional office and the Petitioner's involvement in the accounting decisions consisted primarily of reguesting certain items when a budget proposal was made to the regional office and the placing of certain numbers on forms, which had to conform within the framework of the finalized budget as prepared by the Center's regional office. During the above four (4) year period, Petitioner served as Acting Administrator for the Center for one weekend of every five or six weeks where she was authorized to exercise managerial authority temporarily and primarily in cases of emergencies. In this regard, evidence reveals that the Administrator was, even in these instances, still responsible for the exercise of emergency administrative authority by Petitioner while she served as the Acting Administrator. (Testimony of Petitioner and witnesses Melican, Cohen and Lane.) To performing her regular duties as nursing home administrator at the Center, Petitioner exercised the management skills and the executive duties of planning, directing, staffing, organizing and controlling only the social services department. Since early 1980 to present, Petitioner has served as a member of the Board of Directors and a founder of the Florida State Hospice Organization. During her affiliation with the Hospice of Boca Raton, Petitioner performed executive functions for two (2) years at twenty (20) hours per week and one (1) year at thirty-five (35) hours per week. During her affiliation with the Hospice, Petitioner was responsible for and has provided input for the articulation of rules and regulations governing Hospice facilities statewide. Petitioner has also served on resource committees affiliated and/or approved by Respondent for the development of standards to provide and assure quality Hospice care statewide. In the performance of her duties in the Hospice of Boca Raton, Petitioner has exercised management skills and executive duties which include planning, directing, staffing, controlling and organizing that facility.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent, State of Florida, Department of Professional Regulation, Board of Nursing Home Administrators, deny petitioner's application to sit for the licensing examination in nursing home administration. RECOMMENDED this 1st day of March, 1982, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of March, 1982.
The Issue Vitas Healthcare Corporation of Florida, Inc., and Heartland Services of Florida, Inc., each filed applications with the Agency for Health Care Administration to establish a new hospice program in Duval County, Hospice Service Area 4A, in the second batching cycle of 2004. The issue in these consolidated cases is whether either, both or neither of the applications should be approved.
Findings Of Fact The Parties AHCA The Agency for Health Care Administration is designated by Section 408.034(1), Florida Statutes, "as the single state agency to issue . . . or deny certificates of need . . . in accordance with present and future federal and state statutes." Accordingly, it is the state agency responsible for issuing or denying the applications for certificates of need sought by Heartland and VITAS in this proceeding. Heartland Heartland is a subsidiary of Manor Care, Inc. ("Manor Care"), a company traded on the New York Stock Exchange. Manor Care through various subsidiaries operates approximately 279 nursing homes, 65 assisted living facilities, 89 rehabilitation clinics, and 94 home health agencies and hospices. To the extent these operations require buildings, Manor Care owns the majority of them. While many companies offer one service or another of those offered by Manor Care, the company's ability to offer the variety of health care services in its portfolio enables it to provide continuum of care to its patients. In Florida, Manor Care, through its subsidiaries, operates "just under 30 nursing homes, three . . . in the Jacksonville market." Tr. 31. It operates 11 assisted living facilities in Florida, 29 rehabilitation facilities (14 of which are in the Jacksonville area), and six home health operations. Neither Heartland nor any of the healthcare companies with which it is affiliated through Manor Care operates a hospice program in Florida. But Manor Care operates 86 licensed hospice programs in the United States, the greatest number of any company operating hospices in the country. It commenced hospice operations in 1995 with approximately 58 patients; its hospice census at the time of hearing exceeded 5,600 patients. Heartland's proposed hospice program will be similar to Manor Care's programs in other states, and Heartland will use Manor Care's considerable hospice experience outside of Florida to assist Heartland in operating the proposed hospice if its CON application is approved. Heartland's proposal to provide hospice services in the Jacksonville area, moreover, will offer the opportunity to enhance continuum of care for patients in the area who decide to choose Heartland for hospice in addition to home health care, rehabilitation services or nursing home services. VITAS VITAS Healthcare Corporation of Florida, Inc., ("VITAS" or "VITAS the Applicant"), and the Petitioner in DOAH Case No. 04-3856CON, is a wholly-owned subsidiary of Vitas Healthcare Corporation ("VITAS the Parent.") VITAS the Parent operates 39 hospice programs nationwide and provides services to more hospice patients than any other hospice provider in the country. In 2004, VITAS the Parent merged with Comfort Care Holding, a subsidiary of Chemed Corporation (Chemed). As a result of the merger, VITAS the Parent became a wholly owned subsidiary of Chemed. Chemed is a for-profit corporation that operates under the trade name Roto-Rooter and describes itself as North America's largest provider of plumbing and drain cleaning services. The acquisition of VITAS the Parent by Chemed was made to allow Chemed shareholders to realize 100% of the revenue and earnings of VITAS the Parent. The Chemed acquisition was preceded by significant contributions of VITAS the Parent and its affiliates to the hospice movement in this country. A pioneer in the hospice movement, VITAS the Parent offered hospice services in Florida more than 28 years ago. One of the first hospice programs in the country was a Miami-Dade program affiliated with VITAS the Parent. The program was organized by Huge Westbrook and Esther Colliflower, a Methodist minister and a nurse with an oncology background, respectively, who were both professors at Miami-Dade Community College teaching courses on death and dying issues. VITAS the Parent was also instrumental in the development of hospice licensure standards in Florida and the establishment of the federal Medicare benefit for hospital services. Over this three-decade stretch of time, VITAS the Parent has also been a leader in hospice research and development and has created pain management tools and hospice care manuals that are widely used by other hospice providers across the nation. For example, it developed the Missoula-VITAS quality of life index, licensed and used by over 150 hospices nationwide. The publication 20 Common Problems in End of Life Care was authored by employees of VITAS the Parent and is used as a textbook for delivery of hospice care. In recent years, VITAS the Parent has provided hospice services to more hospice patients than any other hospice provider in the country. In 2004, VITAS programs admitted over 46,000 patients with an average daily census of 9,000. In 2005, VITAS national admissions increased more than 8% to over 50,000 patients with an average daily census of over 10,000. Provision of hospice services through VITAS the Parent's affiliates has expanded recently. In the past three years alone, 15 operational hospices affiliated with VITAS the Parent have been added. In the hospices operated around the country, all Medicare-certified, VITAS earned over $531 million in 2004, growing to over $600 million in 2005. In Florida, affiliates of VITAS the Parent currently operate a number of licensed hospices. These include programs located in Miami-Dade County (Service Area 11), Broward County (Service Area 10), Palm Beach County (Service Area 9C), Orange, Osceola and Seminole Counties (Service Areas 7B and 7C), Brevard County (Service Area 7A), and Volusia and Flagler Counties (Service Area 4B). Of licensed hospices operated in Florida by subsidiaries of VITAS the Parent, three are operated by VITAS the Applicant: one each in Dade, Broward, and Palm Beach County. VITAS the Applicant considers itself to be Florida’s largest hospice and the dominant existing licensed hospice provider in Florida. Whether all parties would agree with that characterization, there is no question about VITAS the Applicant's place among the subsidiaries of VITAS the Parent. VITAS the Applicant is the “major contributor of revenue to Vitas Healthcare Corporation on a consolidated basis.” Tr. 946. Described by the controller of VITAS the Parent as a “cash cow,” VITAS the Applicant “makes VITAS [the Parent] as a whole a very healthy organization [financially].” Id. In 2004, the hospice programs in Florida affiliated with VITAS the Parent collectively admitted more than 16,000 hospice patients. The average daily census for these programs was 3,500 with earnings of over $210 million. All of the hospice programs affiliated with VITAS the Parent are in full compliance with Medicare conditions of participation and none have exceeded Medicare cost caps. Community Community Hospice of Northeast Florida ("Community" or "CHNF"), the Petitioner in DOAH Case No. 04-3886CON, is a not- for-profit Florida corporation, licensed by the State of Florida to operate Northeast Florida Community Hospice in Service Area 4A, serving Baker, Clay, Duval, Nassau and St. Johns Counties. Community was established by a group of volunteers in 1978. Its mission is to improve the quality of life for hospice patients and families and to be the compassionate guide for end- of-life care in the community it serves. It has history of high quality of care, the breadth of which was demonstrated in multiple areas that included community education, bereavement, outreach, and pediatric hospice care. Community also operates a separately licensed pharmacy and a durable medical equipment provider service. Among the issues pled by CHNF's petition in DOAH Case No. 04-3886CON are the following: Material issues of disputed fact to be resolved at hearing include, but are not limited to: * * * b. Whether Heartland's Application, and whether the CON Applications of any co- batched Applicant who files a Petitioner [VITAS], complies with the applicable criteria in Chapter 408, Fla. Stat., and Rules 59C-1.008, 59C-1.030 and 59C-1.0355, F.A.C. * * * Community Hospice alleges that the specific statutes and rules at issue in this case include, but are not limited to, §408.035, §408.037, Fla. Stat., and Rules 59C-1.008, 59C-1.030, and 59C-1.0355, F.A.C. Community Hospice of Northeast Florida, Inc.'s Petition for Formal Administrative Hearing, pp. 4-5. Overview of Hospice Care Hospice care is provided to patients who are terminally ill. As "end of life" care, it is entirely palliative; curative treatment is not a part of the hospice regimen. Hospice admission eligibility criteria require that the patient's condition be certified as terminal by an attending physician or hospice medical director with less than six months to live and, of course, that the patient's wishes include hospice or palliative care services. Hospice care is holistic. It provides physical, emotional, psychological and spiritual comfort and support to a dying patient and considers the patient and the patient's family to be a unit of care. Hospice services are provided by a team of professionals: physicians and nurses who provided skilled nursing care, home health aid services, social worker services, chaplain and religious counseling services and bereavement services for the family left of the patient after death. Hospice care may be provided in location where a patient has lived or is temporarily residing such as a private home, family member's home, assisted living facility (ALF), nursing home, hospital or other institution. There are four basic levels of hospice care: routine home care, general inpatient care, continuous care, and respite care. The majority of hospice patients receive routine home care: care in their own residences whether it be their home, a family member's home, a nursing home, or an ALF. Routine home care comprises the vast majority of hospice patient days. Continuous care is also provided in the patient's home. Unlike routine home care, continuous care is for emergency care or control of acute pain or symptom management. The term "continuous" to describe this type of hospice care is something of a misnomer. Continuous care is typically intermittent but requires a minimum of 8 hours of one-on-one care in a 24-hour period with at least 50% of the care provided by a nurse. The continuous care patient usually has a higher level of acuity than the hospice patient that is receiving general inpatient care. Aside from the difference in acuity level, the continuous care patient is different from the patient receiving general inpatient care because the continuous care patient has made the choice to remain at home, despite the patient's need for emergent care, acute pain relief, or symptom management that is also appropriate in an inpatient setting. As the term indicates, the hospice patient receiving general inpatient care is in an inpatient setting such as a hospital, the sub-acute unit in a nursing home or in a freestanding hospice unit. This type of care provides increased nursing care for patients with symptoms temporarily out of control and in need of round-the-clock nursing, although generally at a lower level of care than the continuous care hospice patient. Respite care is provided to patients in an institutional setting such as a nursing home, ALF or a freestanding hospice unit in order to allow care givers at home, such as family members, a short break or "respite" from the demands of caring for a terminally ill patient. Medicare Reimbursement Medicare provides reimbursement for hospice care and is by far the largest payer for hospice care. Medicare reimburses different rates for hospice based on each of the four basic levels of hospice care. Hospice regulations consider certain hospice services to be "core services": nursing, social work, pastoral or other counseling, dietary counseling, and bereavement services. Referral Sources The main sources of referrals for hospice are hospitals, nursing homes, ALFs, and physician groups. Stipulation The Parties stipulated to the following: AHCA published a fixed, numeric need for one new hospice program in District 4A for the first batching cycle of 2004. No challenges were filed to that published fixed need determination. Vitas and Heartland each timely filed letters of intent, initial applications, and omissions responses proposing to establish a new hospice program in District 4A, in response to AHCA's published fixed need for one new program. AHCA issued its State Agency Action Report preliminarily approving Heartland's CON application 9783, and preliminarily denying Vitas' CON application 9784. Notice of AHCA's decision was published in the September 10, 2004, Florida Administrative Weekly, Vol. 30, No. 37. Community has a history of providing high quality hospice services in District 4A, and has standing in this proceeding. Heartland and Vitas each have the ability to provide high quality hospice services in District 4A, should their respective CON applications be approved. All parties reserve the right to present comparative evidence related to any party's quality of care. All Parties agree that the project costs identified in Schedule 1 of each CON application are reasonable, appropriate, and are not in dispute or at issue in this proceeding. * * * Heartland and Vitas each satisfy the CON review criteria contained in section 408.035(3) pertaining to ability of the applicant to provide quality of care and the applicant's record of providing quality of care. The CON review criteria set forth in subsections 408.035(8)(cost and methods of proposed construction), and (10) (designation as a Gold Seal program nursing facility) are not applicable to this proceeding. Agreed Joint Pre-hearing Stipulation, filed February 20, 2006. Numeric Need in Service Area 4A On April 29, 2004, AHCA published its determination that there is a fixed numeric need for one new hospice in Service Area 4A for the planning horizon at issue in this case. The fixed need pool was calculated by AHCA using a fixed numeric need methodology for hospices. The hospice numeric need methodology is found in Florida Administrative Code Rule 59C-1.0355 (the "Hospice Programs Rule"). Section (4) of the Hospice Programs Rule is entitled, "Criteria for Determination of Need for a New Hospice Program." It has several subsections, the first of which, subsection (a), bears the catch-line, "Numeric Need for a New Hospice Program." Subsection (a) sets out a particular need methodology for determining the numeric need for new hospice programs (the "Hospice Numeric Need Methodology"). The Hospice Numeric Need Methodology Subsection (4)(a) of the Hospice Programs Rule, sets forth the Hospice Numeric Need Methodology. It is, in part, as follows: Criteria for Determination of Need for a New Hospice Program. Numeric Need for a New Hospice Program. Numeric need for an additional hospice program is demonstrated if the projected number of unserved patients who would elect a hospice program is 350 or greater. The net need for a new hospice program in a service area is calculated as follows: (HPH) - (HP) >= 350 where: (HPH) is the projected number of patients electing a hospice program in the service area during the 12 month period beginning at the planning horizon. * * * (HP) is the number of patients admitted to hospice programs serving an area during the most recent 12-month period ending on June 30 or December 31. The number is derived from reports submitted under subsection (9) of this rule. 350 is the targeted minimum 12-month total of patients admitted to a hospice program. Fla. Admin. Code R. 59C-1.0355. Aside from the formula for calculating numeric need, quoted in the previous paragraph, the Hospice Numeric Need Methodology is quite detailed. It requires that a number of different values used by the methodology be determined prior to the calculation required by the numeric need formula. For example, it calls for assessments of the projected number of service area resident deaths in various categories dependent on age and whether the death was due to cancer or not. "Projected deaths" are defined and determined by the Hospice Need Methodology Rule as follows: "Projected" deaths means the number derived by first calculating a 3-year average resident death rate, which is the sum of the service area resident deaths for the three most recent calendar years available from the Department of Health and Rehabilitative Services' Office of Vital Statistics at least 3 months prior to publication of the fixed need pool, divided by the sum of the July 1 estimates of the service area population for the same 3 years. The resulting average death rate is multiplied by projected total population for the service area at the mid-point of the 12- month period which begins with the applicable planning horizon. Population estimates for each year will be the most recent population estimates published by the Office of the Governor at least 3 months prior to publication of the fixed need pool. Fla. Admin. Code R. 59C-1.0355(4)(a) (emphasis supplied.) The underscored language in the Hospice Numeric Need Methodology, quoted above, clearly shows that population data, in the form of estimates and projections of certain populations of the service area, is taken into consideration in the calculation of numeric need. In addition to the Hospice Need Methodology found in paragraph (a), Subsection (4) of the Hospice Programs Rule has several other paragraphs that relate to approval. Their application occurs on alternative bases when there is numeric need or in the absence of numeric need. These paragraphs relate to the effect of "licensed hospice programs," and "approved hospice programs," on determinations of numeric need greater than zero and "approval under special circumstances" in the absence of numeric need. Licensed Programs and Approved Programs Even if the Hospice Needs Methodology yields a numeric need for hospice programs in a hospice service area, "the agency shall not normally approve a new hospice program . . . unless each hospice program serving that area has been licensed and operational for at least 2 years as of 3 weeks prior to publication of the fixed need pool." Fla. Admin. Code R. 59C- 1.0355(4)(b). Likewise, even where the methodology yields numeric need, "the agency shall not normally approve another hospice program for any service area that has an approved hospice program . . . not yet licensed." Fla. Admin. Code R. 59C- 1.0355(4)(c). Subsections (4)(b) and (c) of the Hospice Programs Rule immediately precede subsection (4)(d). Subsection (4)(d) is the converse of (4)(b) and (c). Instead of no approval despite numeric need, it provides for approval when there is no numeric need under special circumstances. Special Circumstances Subsection (4)(d) of the Hospice Program Rule bears the catchline: "Approval Under Special Circumstances." Those circumstances are detailed as follows: In the absence of numeric need identified in paragraph (4)(a), the applicant must demonstrate that circumstances exist to justify the approval of a new hospice. Evidence submitted by the applicant must document one or more of the following: That a specific terminally ill population is not being served. That a county or counties within the service area of a licensed hospice program are not being served. That there are persons referred to hospice programs who are not being admitted within 48 hours (excluding cases where a later admission date has been requested). The applicant shall indicate the number of such persons. Fla. Admin. Code R. 59C-1.0355(4)(d). A conclusion to be drawn from Subsection (4)(d) of the Hospice Programs Rule is that in the absence of a showing of special circumstances, the number of applications granted may not exceed the numeric need yielded by the Hospice Numeric Need Methodology. See Conclusions of Law, below. Existing Providers Service Area 4A is served currently by two hospice programs. Community has provided hospice services since 1978 and Haven Hospital (formerly North Central Florida Hospice based in Gainesville) since 2001. Community has over 700 employees. During fiscal year 2004, Community cared for over 5,000 patients and their families. During the same time period, the average daily census was 844 patients and the average length of stay ("ALOS") was 61.5 days. Forty-two percent of the patients had cancer as their primary diagnosis. The remainder of the patients (58%) had a primary diagnosis that was not cancer. Community provides services to hospice patients and families regardless of age, race, religion, gender, ethnic background, handicap, diagnosis or ability to pay and is certified to serve Medicare and Medicaid patients. Community's roots in Service Area 4A are deep. For example, its CEO and president, Ms. Susan Ponder- Stansel, has lived and worked continuously in Jacksonville and St. Augustine since 1980. She is a member of community organizations that provide an excellent vantage point on the needs of the community, including the Board of the District IV Health Planning Council, the Rural Health Network, and the Advisory Board of the Malone Cancer Institute at Baptist Medical Center. Community is governed by a Board of Directors with 30 members, representatives of a multitude of the communities in Service Area 4A. The Board includes community volunteers, physicians and representatives of each of the major hospital systems. Hospital representatives on CHNF's Board ensure the best collaboration and outreach to hospital patients who are hospice eligible. It allows the formation of partnerships for the development of additional services to fill any gaps between hospice and hospital care. Community encourages and receives input from its St. Augustine/St. Johns Advisory Board and its Clay County Advisory Board, consisting of more than 20 members each. Advisory Board members advise CHNF of additional ways hospice services can be made accessible and available to the residents of those areas. Community has made hospices services accessible and visible throughout the entire service area by strategically establishing offices and facilities to serve each of the metropolitan and the rural communities of the service area. As one might expect from any new hospice program, Heartland and VITAS the Applicant have only committed to office space in Duval County. VITAS proposes to rent such office space and might rent space elsewhere for satellite offices. Heartland proposes to establish its primary initial office in Duval; otherwise, it "will look at the need for satellite offices to ensure that the five-county are is covered." Tr. 274. Community has a history of providing high quality hospice services in Service Area 4A. It provides all levels of hospice care, including respite and continuous care, and has demonstrated the capacity to organize and deliver core hospice and other hospice services in a manner consistent with all regulations and prevailing standards for hospice care. Although most hospice patients prefer to remain in their own homes during the dying process, some symptoms require management with a higher level of 24-hour acute care. Three venues may be provided by a hospice to deliver general inpatient care to a hospice patient. One method is to use beds scattered throughout an acute care hospital or nursing home as they are available ("scatter beds"). Another is to establish a hospital- based inpatient unit specifically dedicated to hospice patients operated in leased space and staffed by hospice employees. The third is to establish a freestanding hospice inpatient facility. Freestanding facilities are generally more home-like than scatter beds or dedicated space in a hospital. Heartland and VITAS propose to contract with nursing homes and hospitals to provide general inpatient care on a scatter bed or single bed basis as needed. Community offers such care in freestanding facilities, hospital-dedicated leased space, and scatter beds so it can allow the patient's needs to determine the venue of choice. Community has two general inpatient facilities. The Hadlow Center of Caring is a 38-bed, freestanding Medicare certified facility centrally located in the service area and easily accessible from I-95, I-295, and US-1. The Morris Center is a 16-bed Medicare-certified dedicated facility located in Shands Hospital in the demographic and geographic center of metropolitan Jacksonville. The Hadlow Center, notwithstanding its medical mission to provide crisis intervention for hospice patients, is designed and operated to create a home-like environment for patients and families enduring end-of-life crisis. It has unlimited visiting hours. Patients can decorate their rooms with their own mementoes. Pets can visit. There are lanais and outdoor areas for patients and families to use. All 38 beds at Hadlow are certified for general inpatient care. Some of the beds are used by CHNF for residential patients -- patients eligible for routine home care, but who either have no caregiver at home, no home, or an unsafe environment at home. Although CHNF is reimbursed for the routine home care, it is not reimbursed by any third party payor for providing residential care. If the patient lacks the ability to pay, CHNF provides the residential bed at Hadlow free of charge. The Morris Center is operationally similar to the Hadlow Center with many of the same amenities, but it is located in a hospital. The Neviaser Educational Institute at Community Hospice of Northeast Florida is a department of the Hospice created in 2003 to provide education to the community and the hospice's employees on end-of-life issues. The Institute has grief and loss, professional education, and a community relations component. Since its inception, the scope and breadth of the professional education provided by the Institute has been significant. In November of 2005, for example, the Institute provided 1,874 hours of education to 1,421 persons (703 staff and 718 community). The hours of education were apportioned 1,448 to unlicensed professionals/students/lay persons, 371 to nurses, 41 to social workers and 13 those seeking continuing medical education (CME) credits. Community is the only hospice in the state authorized by the Florida Medical Association to conduct CME. Although the need for community education can never be fully met by any one provider, and additional education will likely always be needed, CHNF's community education and community grief and loss programs have been thoughtfully designed and delivered. They are efficacious in developing a larger community sense of how to manage grief and loss and in communicating the availability of hospice to deal with those issues. Community PedsCare is an innovative program established by CHNF in collaboration with Wolfson Children's Hospital, Nemours Children's Clinic and the University of Florida. The program provides palliative and hospice services to children (up to 21 years of age) who have been diagnosed with a life-threatening disease, injury, illness or condition, and to the families of these children. Community operates an in-house pharmacy allowing it to dispense prescribed medications to patients in their homes and in CHNF's general inpatient facilities. Community operates its own in-house durable medical equipment department. This enables greater control to ensure prompt delivery when needed and timely pick-up which is not always of concern to for-profit contract vendors of durable medical equipment. The location for CHNF's Gateway Mall Branch Office was specifically chosen to enhance access for African-Americans in the Service Area 4A, the preponderance of whom live proximate to metropolitan and Northwest Jacksonville. The Morris Center for Caring, one of CHNF's general inpatient facilities, was located at Shands Hospital in downtown Jacksonville, specifically because it is in the geographic center of the City, and it is where most of the SA's African- Americans come to receive their healthcare. CHNF has employed a Community Education Manager for the past two and a-half years. She was previously employed by the City of Jacksonville's Human Rights Division for three years to initiate a community dialogue of race relations. For the preceding 20 years she acquired an understanding of the Jacksonville and neighboring counties in Service Area 4A working as manager for a home health agency that, like hospice, primarily delivers healthcare in the patient's home. CHNF's Community Education Manager has had an excellent opportunity to observe how healthcare is, or is not, delivered to African- Americans and minorities and has experience in the difficulties unique to educating African-Americans about the availability of home health and hospice. The community education manager has developed outreach and education programs specifically targeting African-Americans, other ethnic group and Veterans. A significant barrier to higher utilization of healthcare services by African-Americans, which is not unique to Jacksonville, is a historical distrust of healthcare, passed by word of mouth and based on the disparities in treatment African- Americans have experienced. Many physicians are not comfortable, even today, treating African-Americans. As a consequence of disparate treatment, African-Americans are less likely than their Caucasian counterparts to trust or allow a stranger to provide end-of-life care to themselves or a member of their family. To address these barriers, CHNF has recognized that it takes time, persistence, consistency, and commitment to develop a trust in hospice that will overcome years of generalized mistrust of healthcare professionals and the healthcare delivery system. Community management fully supports and historically has implemented diversity training for all of it staff. Community has been very successful in increasing the number of African-American churches and corresponding faith based communities which will allow hospice to make educational presentations. There are a great number of African-American churches in Jacksonville. In FY 2005, CHNF made over 390 visits and made 24 presentations in African-American Churches. Community has focused on African-American women and makes numerous presentations to African-American women's groups because, more often than not, women are the heads of households and are the caregivers to families and friends in the African- American community. Community conducts conferences and workshops with clergy of a variety of denominations to address issues specific to African-American end of life and access to healthcare. If for any reason, including lack of funds, the above programs were pulled back or diminished, it would be like starting over to rebuild trust in the African-American community. Community hired an African-American public relations firm to tailor a number of CHNF brochures specifically to African-Americans. Community has developed effective printed material utilizing testimonials from African-Americans, and succinct wording about topics as varied as how to ask your physician questions, where to get caregiving information and the availability of compassionate care at CHNF for African- Americans. Community places articles and advertising in the Jacksonville First Coast Edition of Black Pages USA, which serves and is distributed to African-American families and businesses in Jacksonville, Orange Park, St. Augustine, Middleburg, Yulee, Callahan, Baldwin, Jacksonville beaches and surrounding areas. Community's outreach to the African-American community in Service Area 4A is having success. In short, CHNF is an available, high quality, full- service hospice. Because of its not-for-profit status and current economies of scale, CHNF is able and willing to fund unique and effective community and professional education, community outreach, and a variety of enhanced services to its patients, their families and the communities in Service Area 4A. Heartland's Application Heartland's hospice care is delivered by an interdisciplinary team. The team consists of a registered nurse, social worker, spiritual care coordinator, volunteer and bereavement coordinators, the attending physician, the hospice medical director, volunteers and therapists. The therapists come from a variety of disciplines: physical, occupational, speech and alternative therapies such as music, art, or massage therapy. Which therapists comprise an individual patient's interdisciplinary team depends on the patient's plan of care. On admission, Heartland patients are provided a hospice client handbook describing available hospice benefits for patients and families. Patients and their families are provided a telephone number to call with any questions or requests for assistance. Foreign language materials are available, as are interpreters and services for the deaf. Heartland's hospice services are available 24 hours a day and seven days a week. Upon hospice admission to Heartland, a plan of care is developed by the interdisciplinary team, including the physicians, in consultation with the patient and family to determine the kinds of care and services needed. Every 14 days the team meets to review each patient's plan of care to ensure the care is evaluated for effectiveness and any changes in services or care that may be needed. Heartland's plan of care for each patient addresses all orders and treatments that are directed by physicians and the needed frequency and types of services and treatments. The plan is implemented by the entire interdisciplinary team, including the attending physician and the medical director. Patients may choose to have the hospice medical director assume patient care or may choose to retain their attending physicians. In the latter case, the attending physician and the hospice medical director work closely together. Each Heartland patient is assigned to a specific interdisciplinary team that oversees all of the patient's care. That team cares for the patient and family throughout the hospice stay irrespective of changes in the level of care needed. Continuity of care is therefore achieved. Bereavement services are provided through the Heartland interdisciplinary team for families and communities up to 13 months post death. Services include one-on-one counseling, community grief support groups, and memorial services. Bereavement needs are anticipated and assessed upon admission and throughout the care, and assessed again after a death to ensure bereavement needs of the family are met. A bereavement plan of care is established with the family and the bereavement coordinator, which may include visits and other forms of contact. Grief support groups meet at locations that are convenient to community and family needs, which may be at a variety of community buildings. Heartland has developed bereavement specialty programs that include spouses and children, including day or weekend childrens' camps throughout Heartland hospices across the country. Heartland has also provided specialty support groups for the spouses of veterans who have lost their lives in war. Heartland programs hold memorial services for all of the patients who have died. One-on-one bereavement counseling is always available. The frequency of counseling depends on the needs of the individual. Heartland's bereavement counselors have extensive experience in grief counseling. Some are also social workers. They are often called upon to conduct crisis intervention. Heartland, therefore, has specific required qualifications for bereavement counselors. New employees, irrespective of their prior grief counseling experience, are trained through the use of an extensive bereavement manual. There is also an extensive training of spiritual care coordinators whose services are sometimes provided in conjunction with bereavement services. Heartland utilizes a customer service training program called Circle of Care for extensive training of every employee. The program focuses on the ability to talk with patients and families and to identify and resolve conflicts in order to provide the best care possible. Heartland provides an extensive volunteer training program with five levels. The training is tied to the nature of the volunteer jobs that will be performed, such as clerical tasks, administrative help or bereavement assistance. There is also training for volunteers who sit with patients when they are dying as part of a vigil program that ensures patients do not die alone. Licensed professionals may volunteer professional services as well. Heartland volunteers are also involved in music therapy or enrichment programs. The volunteer coordinator works closely with activities directors in nursing homes to ensure that any nursing home resident who desires such therapy receives it, whether the resident is a hospice patient or not. The volunteer program seeks to meet patient and family needs of greatly varied kinds. As but one example, the program could see to it that the lawn at the family home is mowed to relieve the patient and family of that responsibility. In addition to gardeners, the volunteers may meet needs such as those addressed by a beautician or a housekeeper. In sum, the program looks at "the whole picture of . . . needs" (tr. 89), of the patient and family. Applicable rules require that hospices provide a minimum of 5% of direct patient care through volunteers. To that end, Heartland's volunteer training programs incorporate all CHAP and NHPCO standards and practice guidelines. Heartland, moreover, believes that every patient who so desires should receive volunteer assistance. During 2005, Heartland hospice programs nationally provided over 178,000 hours of service by volunteers. Heartland also offers a specialized spiritual care program directed by spiritual care coordinators with extensive training in dealing with bioethical issues, and assisting the hospice care teams with crisis intervention and spiritual needs. The focus is on spirituality, values, beliefs and desires, rather than on religion. Heartland spiritual care coordinators and social workers also lead the Heartland suffering program consistent with Heartland's Sincerus Care philosophy. The spiritual care coordinators develop community plans and work with local and family clergy to coordinate the appropriate care for the patient and family. Heartland's chaplains are often called upon to provide funeral services. Heartland employs social workers for the psychosocial needs of patients and families and to identify community resources beyond hospice services when needed. Social workers also assist with funeral plans and with examining financial eligibility for other types of community service that might be available for the patient and family. Social workers provide suffering assessments and advanced care planning and are instrumental in assisting with coping with chronic disease near the end of life. Heartland's Sincerus Program was developed based on three years of extensive research of then available palliative care programs around the country. Some of the programs focused on specific disease categories, such as cardiac or cancer, and many were designed for a hospital-based delivery. A need for stronger programs when patients returned to their homes, however, was identified. In the course of the development of the Sincerus program, Heartland determined that palliative care tools such as pain management, psychological assistance and help with activities of daily living were beneficial for patients with many non-terminal health conditions as well as those who were dying. Heartland developed clinical pathways that could be employed in both the home health care and hospice divisions of the company. Sincerus Care is Heartland Hospice's program for its palliative care and holistic approach to both hospice and health care at home when the patient has not been admitted to hospice. It addresses unmet patient needs in the areas of psychosocial and spiritual support in this time of rapid advances in medical technology. Heartland's research also determined that hospice patients across the country typically received better pain management than non-hospice patients with chronic diseases. For many years up until the present, there have been millions of Americans with chronic disease. Half of those afflicted with chronic disease had two or more chronic diseases. Not all of those suffering from chronic disease, of course, are in a hospice; the majority, in fact, have not been admitted to hospice. Heartland decided to bring the best practices of hospice to all of its patients, including those with chronic disease in home care programs. It did so through Sincerus Care. Heartland has also developed high quality national palliative care intervention processes. In developing the Sincerus Care approach addressing the body, mind and spirit, a need was identified for the development of a suffering assessment and initiative program. Previously, suffering had not been well researched. Heartland was the first national company to fold suffering assessments and initiatives into all of its programs for home care and hospice. Suffering differs from pain. A person may experience pain without suffering or suffer without physical pain. There are three domains of suffering. One is physical suffering, in which a person has been affected by changes in physical abilities. Concern over body image related to surgeries or amputations is a subset of this domain of suffering. A second is personal family suffering. As the most common, it is related to fears that a patient or family may have about the unknown, including whether they may experience uncontrollable pain. Third, is spiritual suffering. A patient may struggle with values and beliefs as they question why they are here, ask what they may have done wrong to deserve their situation or wonder why they do not believe in God. Four typical vital signs are blood pressure, temperature, pulse, and respiration with pain as a fifth. Heartland's programs use suffering as a sixth vital sign. Heartland's spiritual care coordinators and social workers receive specific additional training on suffering assessment and interventions and techniques to minimize, improve or eliminate suffering as much as possible to improve quality of life. Heartland uses a multifaceted approach to pain management because medication alone is not always sufficient to eliminate or alleviate pain. Heartland also finds it necessary to address aspects of suffering. Heartland's medical directors and physicians review the effectiveness of all the modalities for each patient's pain management to ensure that pain and symptoms are managed effectively. All of Heartland's staff receive specialized pain management training and awareness and sensitivity training. Heartland's social workers, spiritual care coordinators, nurses, home health aides, and other staff also receive extensive training to learn how to deal with issues such as oncology emergencies, care of an Alzheimer's patient, and the particular types of care needed during the last hours of life. Heartland offers extensive community education based on assessment of each community's needs so that community outreach programs are developed to meet those specific community needs for end-of-life care. Many outreach programs have been developed by Heartland for underserved populations and ethnic populations. For example, through one of Heartland's Oklahoma offices, Heartland has a partnership with a Native-American tribe because typically Native Americans have not accessed hospice service as fully as other populations. Heartland uses clinical pathways to follow each patient's care from admission through death to continuously assess suffering, psychological and physical needs and track what has occurred over time with the patient and what has been effective and what has not been effective. At the end of the stay, another assessment is preformed with regard to any changes in the patient's quality of life, whether their pain was successfully managed and whether they died in a place of their choosing. Heartland identifies those patients with the most urgent needs or who are in a fragile state of health to ensure that the staff meets those needs. Heartland developed a "referral quick check" to assist nursing homes and assisted living facilities who requested help in identifying patients who might be in need of hospice services. Heartland also provides a variety of information and brochures to patients, families, and the community for education to explain the nature of hospice care. Heartland employs a multi-tiered quality assessment and assurance program. Quality improvement activities and meetings are held at each local hospice. In addition, quality assessment and assurance committees are used at the regional, division, and company-wide levels so that quality effectiveness is evaluated with respect to quality improvement programs throughout the organization to identify trends locally, regionally, divisionally, and company-wide to identify areas of improvement on a continuing basis. In a number of cities, Heartland operates home health and hospice programs together. Home health involves skilled nursing or physical therapy and serves patients who are able to be rehabilitated, either through therapy or training to reach their maximum optimum level. Often patients who are in home care due to problems such as a broken hip, and are undergoing rehabilitation through physical therapy, also develop or have a terminal prognosis. While in Heartland's home care program, they can be assessed, cared for, and visited by a social worker and a chaplain. The Sincerus Care program that addresses patients where they reside is able to transition patients from home care with rehabilitative types of care to the appropriate levels for terminal care. This transition ability is beneficial for patients. Manor Care has over 65,000 employees and provides Heartland hospice programs with access to corporate support for staff recruitment, including a national contract with an advertising agency which allows freedom for local advertising preferences. The company also has a strong human resources department that assists the local programs with training in hiring practices and with extensive background screening processes to ensure the best employees for their programs. Manor Care provides its subsidiaries and affiliates with many services such as consultants, accounting, financial services, and many other areas of support. Those overhead costs or management fees are annually allocated to various operating entities based on their ability to pay, and therefore would never be applied in a manner to financially harm a new hospice program. Heartland's human resources department provides recruiters to assist with recruiting of administrative and director of nursing positions. Manor Care and Heartland also assist in funding the Job Corp program throughout the United States, which program assists people in obtaining skill sets to obtain jobs in areas such as an LPN or a certified nursing assistant position. Despite a recognized national nursing shortage, Heartland has been able to appropriately staff all of its programs to ensure quality care. Heartland hospice program medical directors are hired from the local community, and may be full-time, part-time, or contracted. Heartland requires all of its medical directors to become board-certified, or to be board-certified in their specialty and to have experience with terminally ill patients and to have an affiliation with a Medicare certified hospital. Heartland desires that all its medical directors be palliative care-certified. If a physician is not, then Heartland provides the education and training. Every Heartland hospice program has at least one medical director. Some have more than one medical director, each of whom supervises specific clinical teams. Heartland's employee retention program includes providing scholarship and tuition reimbursement for nurses, LPNs, and social workers going to school or getting their master's degree, as well as home health aides who desire to become LPNs and RNS. This program also includes persons seeking certification in hospice and palliative care and physician certification for palliative care. The Heartland human resources department is active in each local program, with education and training of staff as part of the employee retention program. In addition to Circle of Care training, the Heartland human resources department also provides leadership and management development training through online courses and educational materials. Heartland has a dedicated team utilized for the implementation of new hospice programs. The team's primary responsibility is to set up each new program location, and includes an administrator, nursing supervisor and office staff who prepare manuals and documentation for use, acquire the furniture and leases, hire the local staff, and assist through the Medicare certification process. The implementation team is expected to function in the same manner with the new Service Area 4A program. Heartland has been very successful with its implementation teams in starting new programs. It is reasonable to expect it to be successful in Service Area 4A as well. Heartland management has met with its affiliated Jacksonville nursing home and rehabilitation clinic directors to discuss methods of providing the best pertinent care for those also in need of hospice care. The administrator of Heartland South-Jacksonville, a nursing home, testified to the current contract with Community, which provides the nursing home residents with quality hospice care, and to the willingness to negotiate a similar contract with Heartland hospice. She supports Heartland's hospice proposal and believes it would be beneficial for patients to have another high quality choice for hospice. She would also assist Heartland's implementation of a hospice program through exiting relationships with local physicians and other health care providers. Vitas Application An experienced provider of hospice services, VITAS is capable of providing in Service Area 4A the core services and related specialized services it provides in Dade, Broward and Palm Beach Counties. As an affiliate, moreover, of VITAS Healthcare Corporation, if its application were to be approved, Vitas would benefit from its affiliation with its parent and its parent’s subsidiaries. Prior to submitting its application, VITAS representatives visited Service Area 4A to assess the market and any potential populations and areas of unmet needs. Mr. Ron Fried, a VITAS senior vice president for development, visited 26 of 32 nursing homes in Duval County, and additional nursing homes in other counties. He also visited with community leaders and organizations. Based on his assessments, he determined there was an unmet need in inner city areas, among nursing home residents and in the African-American community. In addition to Mr. Fried’s on-the-ground survey, VITAS representatives also reviewed the published hospice admission and fixed need pool data, as well as data on deaths and causes of death. They determined there was a large unmet need among the non-cancer patient population. Offers of conditions on hospice programs "are typically rejected" (tr. 502) by AHCA. For state licensure purposes and for federal certification purposes, hospices have to treat any patient who is referred to them or who self- presents. Since hospices, in contrast to hospitals or nursing homes, have no choice in whether to take a patient, AHCA normally will make the comment in the SAAR that it is not necessary to condition an application. While the Hospice Program Rule does not require that an application be conditioned in any way, it nonetheless provides for preferences among competing CON applications as a way to distinguish one competing application from another: Preferences for a New Hospice Program. The agency shall give preference to an applicant meeting one or more of the criteria specified in subparagraphs 1. through 5.: Preference shall be given to an applicant who has a commitment to serve populations with unmet needs. Preference shall be given to an applicant who proposes to provide the inpatient care component of the hospice program through contractual arrangements with existing health care facilities, unless the applicant demonstrates a more cost- efficient alternative. Preference shall be given to an applicant who has a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. In the case of proposals for a hospice SA comprised of three or more counties, preference shall be given to an applicant who has a commitment to establish a physical presence in an underserved county or counties. Preference shall be given to an applicant who proposes to provide services that are not specifically covered by private insurance, Medicaid, or Medicare. Fla. Admin. Code R. 59C-1.0355(4)(e). Despite the lack of necessity for conditions in hospice CON applications and the practice of AHCA in reviewing such applications and commenting on them in SAARs, VITAS offered specific conditions in its application. The purpose of the conditions, by and large, was to demonstrate VITAS' commitment to meet the preferences advanced in Subsection (4)(e) of the Hospice Program Rule. For example, having determined that there was a large unmet need in Service District 4A for the non-cancer population, it conditioned approval of its application on support of a commitment to serve those populations. VITAS conditioned approval of its CON on providing at least 67% of its patient days to non-cancer patients, including a condition for at least 10% of total days to be Alzheimer’s patients. VITAS has demonstrated ability to meet the needs of the non-cancer population. Nationally, hospices have provided one average around 43% of service to non-cancer patients according to the most recent data, while VITAS programs provided 57% of care to non-cancer patients. VITAS has focused significant attention and resources in development of clinical criteria to identify appropriate non-cancer admission, and in education of physicians about the benefits of the hospice for the non-cancer population. While the Florida statewide average for hospice providers is 57.6% non-cancer, VITAS’ programs had 67% non- cancer populations. As Patricia Greenberg, VITAS’ health planning consultant explained, VITAS has established a niche in serving non-cancer patients, including its most recent start up programs in Brevard County with a 69% non-cancer population and Palm Beach County with a 76% non-cancer population. Aside from agreeing to condition its CON on providing 67% of care to non-cancer patients, VITAS’ application projects 274 non-cancer admissions in its second year of operations. VITAS Healthcare Corporation and affiliates have a demonstrated history and commitment to serving large ethnic minority populations in metropolitan markets, including funding of full-time community outreach positions, partnership with the Rainbow Coalition/Operation Push organization, and participation in clergy forums and events aimed at the African-American community in the Jacksonville area. VITAS Healthcare Corporation also “partnered with Duke Institute on Care at the End of Life housed at Duke Divinity School to provide in several areas of the country . . . ministers . . . to learn about end- of-life care issues and how . . . together [to] educate the community to assure access particularly for African Americans to hospice care.” Tr. 627. VITAS specifically conditioned its application on providing a minimum of 15% of its services to Medicaid and charity days, including those Medicaid-designated persons residing in nursing homes. As explained by Mr. Fried, this commitment was made to meet the unmet needs of the underserved inner-city, a largely African-American population with substantial unmet needs. VITAS has a corporate policy of social responsibility and provided over $7 million in charity care in 2004, growing to $8 million in 2005. VITAS proposes to provide the inpatient care component of the hospice program through contractual arrangements with existing health care facilities. Its financial pro formas do not include general inpatient care projections. The reason for the lack of these projections was explained at hearing by Ms. Law. The experience of VITAS the Parent through its affiliates is that with startups through the first two years, the projection is less than one- half percent, which rounded down to zero. Put another way, VITAS expected that its average daily census for inpatient care in its first two years would be less than one patient and therefore the application "did not reflect the revenue or the expense" (tr. 661) associated with inpatient care. There is no question, however, that the VITAS' application is clear that it proposes to provide inpatient care through contractual arrangements. The proposal is supported, despite not being reflected in the financial pro formas, by the experience nationally of VITAS the Parent, "one of the nation's leading providers of [hospice] inpatient care . . . run[ning] about 5% of [total] days of care." Tr. 660. VITAS demonstrated a commitment to serve AIDS patients, the homeless, and patients without primary caregivers at home. VITAS conditioned its CON application on providing 2% of its admissions to AIDS/HIV patients or to serve at least 10% of all AIDS/HIV-related deaths in Service Area 4A. VITAS Healthcare Corporation and its affiliates have demonstrated a commitment to serve such patients; VITAS Healthcare Corporation has even sponsored programs to combat AIDS in sub-Saharan Africa. VITAS' application proposes a physical location in Duval County, but it does not definitely propose a physical presence in any other county (whether underserved or not). While the application is viewed by VITAS as allocating funds for multiple offices, at least a main office in Duval County and a satellite office somewhere in Service Area 4A, Mr. Fried testified that the funds so allocated "might" (tr. 877) support a satellite office in Nassau County but that VITAS "hadn't decided on a precise location. And I don't recall whether that included any satellite space elsewhere in the service area." Tr. 878. VITAS proposes to provide services not specifically covered by private insurance, Medicare or Medicaid, for example, pet therapy, community education and outreach to combat AIDS. VITAS conditioned its application on the implementation of an information technology system known as CarePlanIT. A hand-held, bed-side device, CarePlanIT allows caregivers to perform bed-side entry of notes and orders and to have immediate access to the full range of data stored in the company-wide database known as the VITAS Exchange. CON Review Criteria The Agency found in its SAAR (and continues to maintain) that both applicants generally meet all applicable CON review criteria. It approved Heartland's application and denied VITAS after comparative review that convinced AHCA that Heartland's was superior. Heartland concedes that the “Vitas application generally addresses all applicable CON review criteria.” Heartland Services Inc. And Agency for Health Care Administration Joint Proposed Recommended Order, p. 29. It is joined by CHNF in the contention, however, that compliance with certain CON requirements and review criteria is doubtful and the application information is flawed in a number of respects. VITAS' three opponents in this proceeding, moreover, charge that the VITAS' application is flawed in a manner that may be cause for dismissal under the circumstances of this case: that it does not contain an audited financial statement and therefore does not meet minimum application content requirements. The Agency did not dismiss VITAS' petition; Heartland, nonetheless, maintains that it should be dismissed as the result of the evidence in this proceeding for is failure to meet minimum application content requirements. Application Content Requirements Section 408.037, Florida Statutes (the “Application Content” Statute) governs the content of CON applications. It states, in part, (1) An application for a certificate of need must contain: * * * (c) An audited financial statement of the applicant. In an application submitted by a[] . . . hospice, financial condition documentation must include, but not be limited to, a balance sheet and a profit- and-loss statement of the 2 previous fiscal years’ operation. (Emphasis supplied.) Heartland’s CON application satisfies all of the application content requirements. The application of VITAS does not. VITAS’ application contains audited consolidated financial statements for its parent and for the subsidiaries of VITAS the Parent. It does not contain a separate audited statement of VITAS the Applicant. The presence in the application of a consolidated financial statement of the parent and subsidiaries is not a substitute for the required audited financial statement of the applicant. See Fla. Admin. Code R. 59C-1.008(1)(c): “. . . Nor shall the audited financial statements of the applicant’s parent corporation qualify as an audit of the applicant.” In short, the application fails to contain an audited statement of the VITAS the Applicant and therefore fails to meet minimum content requirements. Although the Application Content Statute is phrased in mandatory terminology (“[a]n application . . . must contain”), VITAS’ failure is not necessarily fatal to its application. The failure to strictly comply with the Application Content Statute may be forgiven by Section 408.039(5)(d), Florida Statutes (the “Forgiveness Statute”) under certain circumstances: The applicant’s failure to strictly comply with the requirements of s. 408.037(1) . . . is not cause for dismissal of the application, unless the failure to comply impairs the fairness of the proceeding or affects the correctness of the action taken by the agency. VITAS maintains that the Forgiveness Statute forgives the application’s lack of an audited financial statement of VITAS the Applicant. The Case for Forgiveness VITAS the Parent does not typically obtain separate audited financial statements for each of its subsidiaries. Instead, independent certified public accountants audit the financial statements of VITAS the Parent and its subsidiaries together in a consolidated fashion. After audit, a consolidated audited financial statement is issued by the independent CPAs. If there is ever a need for a separate audited financial statement of any one of the subsidiaries, according to Lawrence Press, at the time of hearing the controller of VITAS the Parent (see tr. 929), then VITAS commissions an audited financial statement of any “separate legal entity” within the group, id., including VITAS the Applicant. Whether the financial information submitted by VITAS supports the conclusion that the lack in the application of an audited financial statement of the applicant may be forgiven depends on an examination and analysis of the information submitted. It begins with one of the documents attached to Schedule 3 in the application, the consolidated financial statements of VITAS the Parent and its subsidiaries (the "Audited Consolidated Financial Statements." The Audited Consolidated Financial Statements The Audited Consolidated Financial Statements cover two years: the year ended September 30, 2003 (the "2003 Consolidated Audit") and the year ended September 30, 2002 (the "2002 Consolidated Audit.") See VITAS’ Certificate of Need Application, Vol. 1 of 4, Tab 3. The Audited Consolidated Financial Statements contain two reports each entitled, “Report of Certified Public Accountants,” one for the 2003 Consolidated Audit, the second for the 2002 Consolidated Audit. The first report is dated November 10, 2003; the second report is dated November 8, 2002. The first report concludes: In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated position of Vitas Healthcare Corporation and Subsidiaries at September 30, 2003 and 2002, and the results of their operations and cash flows for each of the three years in the period ended September 30, 2003, in conformity with accounting principles generally accepted in the United States. VITAS Certificate of Need Application, Vol. 1 of 4, Tab 3, p. 1 of the 2003 Consolidated Audit.2 Following the first report are the consolidated financial statements themselves. These are listed in the Table of Contents as follows: Consolidated Financial Statements; Consolidated Balance Sheets at September 30, 2003 and 2002; Consolidated Statements of Income for the years ended September 30, 2003, 2002 and 2001; Consolidated Statements of Changes in Redeemable Preferred Stock and Stockholders Deficit for the years ended September 30, 2003, 2002, 2001; Consolidated Statements of Cash Flows for the years ended September 30, 2003, 2002 and 2001; and Notes to Consolidated Financial Statements. See VITAS Certificate of Need Application, Vol. 1 of 4, Tab 3, Contents, Consolidated Financial Statements, September 30, 2003. The second report contains an identical opinion, except for a change in dates to reflect that the statements are for the statement year ending in 2002 rather than 2003. The second report also contains a paragraph that does not appear in the first report: Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental balance sheets as of September 30, 2002 and 2001, and statements of income for the years then ended which include Vitas Healthcare Corporation, Vitas Healthcare Corporation of Florida, . . . [and a number of other VITAS Healthcare Corporation Subsidiaries] are presented for the purpose of additional analysis and are not a required part of the financial statements of Vitas Healthcare Corporation and Subsidiaries. Such information has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. VITAS Certificate of Need Application, Vol. 1 of 4, Tab 3, p. 1 of the September 30, 2002, Consolidated Financial Statements. Following the second report are consolidated financial statements of the same type as those following the first report, that is, detailed balance sheets, detailed statements of income, detailed statements of changes in redeemable preferred stock and stockholders deficit, detailed statements of cash flows, and notes. Unlike the information that follows the first report, however, there is other information listed in the Table of Contents for the 2002 Consolidated Audit. It is denominated “Other Financial Information.” The Other Financial Information is described in the Contents page of the Consolidated Financial Statements for September 30, 2002, as “Supplemental Balance Sheets at September 31 [sic], 2002 and 2001” and “Supplemental Statements of Income for the years ended September 31 [sic], 2002 and 2001.” It is this information that is “presented for additional analysis” as reported in the paragraph that appears in the 2002 report that is not present in the 2003 report. This is also the information that is reported in the same paragraph to have been subject to the auditing procedures applied in the Ernst & Young audits and found, in Ernst & Young’s opinion, to be fairly stated. The financial information attached to Schedule 3 in VITAS’ application also contains another set of documents. These documents are not a part of the Audited Consolidated Financial Statements. Nor, accordingly, were they reviewed by Ernst & Young. They consist of three pages. The first page is a letter from Robin Johnson, CPA, that identifies her as vice president and controller of VITAS Healthcare Corporation. The letter is dated June 25, 2004 (the “Johnson Letter.”) Attached to the Johnson Letter are two pages. The first page is entitled, “Vitas Healthcare Corporation and Subsidiaries Consolidated Balance Sheets.” The second page is entitled, “Vitas Healthcare Corporation and Subsidiaries Consolidated Statements of Income.” The Johnson Letter refers to these pages as "[t]he . . . supplemental balance sheets as of September 30, 2003 and 2002 [2003 information] and the statements of income for the years then ended . . . ." Each of these two pages (the “Johnson Supplemental Balance Sheets and Statement of Income” or the "Johnson Supplemental Financial Information") contains 13 columns; the first column devoted to “CONSOLIDATED VITAS,” the next twelve devoted to one of each of twelve subsidiaries. Of the 13 columns on each page, one column is devoted to financial information that pertains solely to “VITAS OF FLORIDA” or VITAS the Applicant. The Johnson Letter and the Johnson Supplemental Financial Information were not audited by Ernst & Young or any other independent certified public accountant. Nonetheless, they appear in the VITAS application within the body of the Audited Consolidated Financial Statements. Mr. Beiseigle described them at hearing: “[T]hat information that’s sandwiched between the 2002 and 2003 audits of VITAS Healthcare Corporation.” Tr. 1701. Mr. Beiseigle’s description was quickly followed by a clarification from CHNF’s counsel, Mr. Newell: “He means physically in the book, not necessarily chronologically.” Id. Mr. Newell's clarifying comment is confirmed by an examination of the application in evidence. Indeed, Mr. Beiseigle's description is accurate; the Johnson Letter and the Johnson Supplemental Financial Information is "sandwiched" between the 2003 Consolidated Audit and the 2002 Consolidated Audit. It appears in the midst of the Audited Consolidated Financial Statements, despite the fact that it is information that was not audited by Ernst & Young and not audited by any other independent certified public accountant. The insertion of the Johnson Letter and Supplemental Balance Sheets and Statements of Income into the VITAS application in the midst of the Audited Consolidated Financial Statements was explained by VITAS through the testimony of Mr. Press, VITAS' controller at the time of hearing, and Ms. Greenberg, the primary author of the application who was responsible for compiling all four volumes of the application in their entirety. See Tr. 996. The Insertion of the Johnson Information VITAS attempted to commission an audited financial statement of VITAS the Applicant standing alone. As Mr. Press testified, such an attempt would be in due course whenever there was a need for a separate audit of any of the individual VITAS subsidiaries. An example of a case of such a need is this one, when a CON application must contain an audited financial statement of the applicant. VITAS representatives, therefore, asked Ernst & Young to audit financial statements of VITAS the Applicant separately from the consolidated review it had conducted. VITAS' request of Ernst & Young followed the audit of the Consolidated Financial Statements and was also made in the wake of ChemEd’s acquisition of VITAS the Parent. After the acquisition, ChemEd informed Ernst & Young that its responsibilities with regard to VITAS the Parent and its subsidiaries would be assumed by ChemEd’s accountants, PriceWaterhouse. Ernst & Young, therefore, declined the request by VITAS for an independent separate audit. There is nothing of record to show that VITAS attempted to obtain either an exception from ChemEd to allow Ernst & Young to proceed with a separate audit or to show that VITAS attempted to obtain an audit of itself from PriceWaterhouse or some other certified public accountant firm besides Ernst & Young. VITAS was aware that its application would lack minimum content without an “audited financial statement of the applicant.” It attempted to cure its non-compliance with the statutory requirement by insertion into the application of the Johnson Letter and Johnson Supplemental Financial Information. VITAS had no illusions that the information would constitute an audited financial statement of the applicant. It knew the information had been generated internally and constituted "managerial accounting" rather than "financial accounting." It knew the information had not been audited externally by an independent certified public accountant. In introduction of the Supplemental Information, the Johnson Letter reads, in part: VITAS Healthcare Corporation audits were conducted for the purpose of forming an opinion on the financial statements of Vitas Healthcare Corporation and Subsidiaries taken as a whole. The enclosed supplemental balance sheets as of September 30, 2003 and 2002, and the statements of income for years then ended which include . . . Vitas Healthcare Corporation of Florida . . . are presented for the purpose of additional analysis and are not a required part of the financial statements of VITAS Healthcare Corporation and Subsidiaries. Such information has been subjected to the auditing procedures applied in the audits of the financial statements and are fairly stated in all material respects in relation to the financial statements of VITAS Healthcare Corporation and Subsidiaries … taken as a whole. VITAS CON Application 9784, Vol. 1 of 4, Tab 3 (no page no., emphasis supplied). The language in the Johnson Letter underscored above makes two claims paraphrased as follows: first, the balance sheets and statements of income have been subjected to the auditing procedures applied by Ernst & Young in the consolidated audit; second, the information in the balance sheets and statements of income is fairly stated in all material respects in relation to the Audited Consolidated Financial Statements. It appears that the language of the letter, quoted above, was selected because it mirrors the language used by Ernst & Young to describe the “Other Financial Information” attached to the Ernst & Young 2002 consolidated audit. Whether that was why the language was selected or not, the inclusion in the letter was the subject of sharp criticism, see tr. 421-423, by Steven Jones, a licensed certified public accountant in Florida and Heartland's expert in accounting and healthcare finance. He found the language contrary to provisions of the American Institute of Certified Public Accountants, provisions of the Florida Statutes and the Florida Administrative Code, and generally accepted auditing standards that address "independence, integrity and objectivity." See Tr. 421-23. Whatever the motivation for including the two claims in the Johnson Letter, Ms. Johnson was not acting as an independent auditor. Nor could she have been so acting. Although a certified public accountant, as the controller of VITAS Healthcare Corporation, Ms. Johnson is quite the opposite of “independent” when it comes to VITAS the Parent and its subsidiaries, including the applicant in this case. Thus the Johnson Letter cannot stand for the claim made within it that Johnson Supplemental Financial Information had been subject to the same auditing procedures as the information subject to the consolidated review. Any light that Ms. Johnson might have shed on the claims in the letter did not materialize. Ms. Johnson did not testify at hearing. The task of proving compliance with the statutory requirement or how lack of strict compliance could be forgiven fell to Mr. Press and Ms. Greenberg. To the credit of both Mr. Press and Ms. Greenberg, neither claimed that the Johnson Letter and Johnson Supplemental Information constituted audited financial statements. As Ms. Greenberg stated in cross- examination by Mr. Newell at hearing: Q. But there is a difference . . . between the Letter that accompanies the . . . audits by Ernst & Young . . . and this letter [Ms. Johnson’s letter] . . . Now Ernst & Young did that in 2002, but based on your request and Ms. Johnson’s willingness, she certified that this time, but she was not one of the independent auditors, was she? A. No, her role was to work with them and provide them with the financial statements, but she was not an independent auditor. * * * Q. Would you agree with me perhaps that one who uses language like that in the bottom of Ms. Johnson’s letter, which is essentially identical to what external auditors used in the 2002 letter, might be the use of language in a manner that is to imply that a CPA is acting as independent certified public accountant in the audit of the attached statements. A. I don’t understand the question. Ms. Johnson is a CPA and controller and she was providing that language. We’ll make sure – she was not an external auditor, was she? A. No, I think I already said that. Tr. 1130, 1132, 1133. Although Ms. Johnson’s letter does not raise the supplemental information to the level of a financial statement audited by an independent certified public accountant, VITAS presented evidence as to why the failure to file an audited financial statement of the applicant does not impair the fairness of the proceeding or would not impair the correctness of approving VITAS’ application should AHCA do so. For example, all of the data on the balance sheets and income statements for subsidiary corporations tie to the consolidated totals for VITAS Healthcare Corporation as a whole. The statements reveal that on a consolidated basis the company had over $13 million in net income in 2003. VITAS Healthcare Corporation of Florida supplies the majority of revenue and net income to VITAS Healthcare Corporation. In fact, it makes up for losses by other subsidiaries. Ms. Greenberg opined that, as a financial analyst, she could determine ability to fund the project from the financial information supplied in the CON application. First, the $200,000 startup cost is minimal. Second, all of the supplemental information ties back to the audited consolidated financial statements. Mr. Press made this point, too. Ms. Greenberg determined, moreover, that VITAS Healthcare Corporation of Florida has available to it $14.3 million in current assets, $14.9 million in total assets, $51 million in retained earnings, and over $29 million in net income. Quite clearly, in her view, there are adequate funds available to fund the program of VITAS the Applicant in Service Area 4A. In addition, Ms. Greenberg noted that the proposed method of funding is from future cash flows and is not based on historic information. The application includes a forecast of financial operations of VITAS Healthcare Corporation with and without approval of the proposed project. Under a conservative scenario, VITAS is expected to net over $26 million in income, an amount more than sufficient to fund a $200,000 project. Ms. Greenberg’s analysis was subject to criticism by Mr. Beiseigel, CHNF’s expert health care financial analyst and forensic financial analyst. His analysis began with appreciation of the import of the lack of an audited financial statement of the applicant. The analysis requires an understanding of the elements of an audited financial statement. Elements and Import of an Audited Financial Statement The elements of an independently audited financial statement include an audit opinion letter, a detailed balance sheet, detailed income statement, detailed statement of changes in owner’s or stockholder’s position, a detailed operating cash flow statement and detailed notes allowing a financial reviewer to determine the existence of contingent liabilities and the materiality of the financial statements. These elements are all present in the Ernst & Young Audited Consolidated Financial Statements. The import of the lack of an audited financial statement of VITAS the Applicant and the presence of the Johnson Letter and Johnson Supplemental Financial Information to cover the year ending September of 2003 in this case is obvious. All of the elements of an independently audited financial statement are not subject to review by financial analysts such as those employed by AHCA and analysts outside AHCA (Mr. Beiseigel, for example) who might have reviewed the independently audited financial statement for purposes of a contested proceeding at DOAH, as is the case here. The Johnson Information that pertains to VITAS the Applicant was criticized in more detail on another basis: it does not contain any cash flow statements. Cash Flow Statements The Johnson Supplemental Financial Information does not include cash flow statements. In the SAAR, the Agency observed that cash flow data were not included in the application when it discussed compliance with Section 408.035(4), Florida Statutes, that is, what funds for capital and operating expenditures are available for project accomplishment and operation. Nonetheless, the SAAR concluded: Although the applicant [VITAS] did not provide historic cash flow data, the applicant showed healthy earnings. Even under the conservative analysis, the applicant has $6 million in working capital. Therefore, funding for this project and all capital projects should be available as needed. Heartland 16, p. 64. As part of its case that the failure to include an audited financial statement of the applicant should be forgiven, and that it was not necessary for it to provide cash flow data, VITAS points to the language that follows the statutory requirement that an application contain an audited financial statement: In an application submitted by a[] hospice, financial documentation must include, but need not be limited to, a balance sheet and a profit-and-loss statement of the previous 2 years’ operation. § 408.037(1)(c), Fla. Stat. VITAS submitted balance sheets and income statements for 2003, albeit not audited. Furthermore, Ms. Greenberg's point that the information provided to AHCA in the application demonstrates that VITAS the Applicant clearly has the financial wherewithal to fund the start-up costs associated with the application, costs that are minimal was adopted, in essence, by AHCA in the SAAR. Nonetheless, at hearing, AHCA supported Heartland and CHNF's argument that the lack of an audited financial statement in VITAS’ application is a material point to be considered in this proceeding when it comes to comparative review. The Agency has never excused the lack of an audited financial statement of an applicant. Furthermore, Mr. Gregg testified that in a comparative review proceeding where one applicant provides an audited financial statement and another does not, to not take into consideration that one application was missing the required audit would impact the fairness of the proceeding: I would say that it impacts the fairness to the extent that it prevents us from comparing apples to apples. A completely audited financial statement is generally more reliable and . . . has been viewed by a CPA who is not typically involved with the organization, and the other [an internally generated management report] is less . . . reliable. Tr. 512. As Mr. Gregg further testified in the context of comparative review, “I would say that there were uncertainties in the financial information that we got from VITAS. And we were more comfortable with the level of certainty of the financial information that we had from Heartland.” Tr. 506. Thus, while AHCA did not dismiss VITAS’ application for failure to meet minimum content requirements, it took into consideration the missing audit as it reviewed Heartland and VITAS’ applications on a comparative basis after determining that the two applicants generally meet the statutory and rule criteria for approving a CON application. CON Review Criteria Heartland demonstrated that it meets the statutory and review criteria for approval. To do so, Heartland had to correct an error in the Heartland application that related to long-term financial feasibility. The application had assumed that continuous care patient days would amount to approximately 7% of total patient days for both Year One and Year Two. The assumption was made after looking at national data in which continuous care is presented in terms of hours while other patient service types are presented in terms of days. The assumption was criticized by VITAS' witnesses. The criticism was discovered before hearing by Heartland. Mr. Jones realized the mistake, and therefore "recast those relative ratios, using a normal range for a continuous day, [so that] the percentage of continuous care produce[d] [is] substantially around 1 percent," tr. 412-13, an accurate percentage of continuous care for hospice programs. Mr. Jones also re-cast the pro formas to assume that continuous care should be reimbursed only at 15 hours per day rather than 24 hours per day (as the application had done) in response to another valid criticism by VITAS. VITAS moved to strike any testimony or evidence that concerned the re-casting on the basis that it is an impermissible amendment to Heartland's application. Ms. Greenberg also opined that Heartland projected salaries for some FTE positions were too low. Mr. Jones testified otherwise: that the salary estimates are generally reasonable. Ms. Greenberg also criticized the Heartland application based on an assertion that the projections did not reflect an additional 5% expense per patient day ("PPD") for dual eligible Medicare/Medicaid patients who reside in nursing homes. For nursing home residents who elect hospice admission, the state no longer pays the nursing home its Medicaid room and board rate, but rather pays a geographic area average rate to the hospice, which on average is about 95% of the rate previously paid to the nursing home. Even though it is negotiable, hospices often pay the nursing home its normal rate, resulting in a hospice expense of about 5% PPD more than the hospice is reimbursed for room and board. Five percent of the average nursing home room and board rate in the Jacksonville area would equal approximately $7.50 PPD. Statewide, about 30% of nursing home patient days for hospice care is delivered to Medicaid dually eligible nursing home residents. In the face of the criticism, Heartland demonstrated at hearing that its proposal is financially feasible in the long term, even if it were assumed: that Ms. Greenberg is correct about the salaries; that continuous care days should be 1% rather than 7% and reimbursed at only 15 hours per day instead of 24 hours per day; and, that the revenue for Medicaid nursing facility residents should be reduced at a rate of 5% PPD. This demonstration was conducted by Mr. Jones in what he described as a "worst case scenario" analysis. The analysis used a model that reduced continuous care revenue and shifted the reduced days to routine care; correspondingly adjusted the staffing levels to the Heartland standard; accounted for the 5% PPD Medicaid nursing home resident differential; and increased salary expenses. The re-casting is reflected in Heartland Exhibit 15, a recast of Schedules 6, 7, and 8 in its CON application. The re-casting results in a projected loss in Year One, but a projected profit in Year Two of $88,596, a demonstration of long term financial feasibility. The adjustments reflected in Heartland Exhibit 15, moreover, do not reflect every adjustment that would have to be made to fully recast the entire financial projections. If other expenses that would be reduced, such as drug costs and medical supplies, by a full recasting were included, the profit projected for Year Two would higher than the $88,596 reflected in the exhibit. In CON application proceedings, short-term financial feasibility is typically considered as the ability to fund the projected costs reflected on Schedule 1 of the application and to provide sufficient working capital for a start-up period. Heartland's application demonstrates short term financial feasibility. Because the applicant is a company in the development stage, it obtained a funding commitment from Manor Care to meet its funding needs. The application contained Manor Care's audited financial statements demonstrating the ability to fund its commitment in addition to an audited financial statement of the applicant as required. Manor Care is committed to providing all necessary funding and working capital requirements to Heartland to establish and operate the proposed hospice. Manor Care has the financial resources to fund the project. If needed, Manor Care also has approximately $230 million of unused debt capacity. It can clearly fund the $294,000 needed for the project. Manor Care, moreover, consistent with its policy with other subsidiaries, will not charge Heartland any interest on funds it provides for capital or operating expenses. If the CON is approved, Manor Care is committed to moving forward with the development of the hospice program. Neither Manor Care nor any of its affiliates has ever received a CON to develop a hospice in any state and not proceeded with development. Testimony at trial bolstered the Agency's conclusion in its SAAR that VITAS, despite the missing audited financial statement of VITAS the Applicant, should be able to fund the hospice program it proposes for Service Area 4A in the short term. The financial information supplied by VITAS, however, because of the lack of an audited financial statement of the applicant, was not as certain as that of Heartland, a matter that was determinative in the Agency's comparative review of the two applications. Comparative Review The financial information in Heartland's application was more certain than the financial information in the application of VITAS. Since Heartland provided an "audited financial statement of the applicant" and VITAS did not, Heartland must be viewed as providing a greater level of certitude about its financial position. The Agency opined that there is a second factor that makes Heartland's application superior. Currently, there are hospice programs operated either by VITAS the Applicant or affiliated with VITAS the Parent in Service Areas 11 (Dade and Monroe Counties), 10 (Broward County), 9C (Palm Beach County), 7A (Brevard County), 7B (Flagler and Volusia Counties), and 7C (Orange County.) Hospice programs affiliated with VITAS the Parent now serve the eastern coast of Florida from Key West to the service area adjacent to Service Area 4A in the northeast corner of the state and inland covering the most populous area of Central Florida. The introduction of Heartland, a nationally recognized quality hospice provider, into Florida will foster competition that, in AHCA's view, will benefit patients and families through providing a choice in hospice care.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration approve CON Application 9783 filed by Heartland Services of Florida, Inc., and deny CON Application 9784 filed by Vitas Healthcare Corporation of Florida. DONE AND ENTERED this 18th day of October, 2006, in Tallahassee, Leon County, Florida. S DAVID M. MALONEY 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 Filed with the Clerk of the Division of Administrative Hearings this 18th day of October, 2006.
The Issue Whether the certificate of need (“CON”) applications filed by Cornerstone Hospice & Palliative Care, Inc. (“Cornerstone”); Suncoast Hospice of Hillsborough, LLC (“Suncoast”); and VITAS Healthcare Corporation of Florida (“VITAS”), for a new hospice program in Agency for Health Care Administration (“AHCA” or the “Agency”) Service Area 6A (Hillsborough County), satisfy the applicable statutory and rule review criteria sufficiently to warrant approval, and, if so, which of the three applications, on balance, best meets the applicable criteria for approval.
Findings Of Fact Based upon the credibility of the witnesses and evidence presented at the final hearing, and on the entire record of this proceeding, the following Findings of Fact are made: The Parties AHCA AHCA is designated as the single state agency for the issuance, denial, and revocation of CONs, including exemptions and exceptions in accordance with present and future federal and state statutes. AHCA is also the state health planning agency. See §§ 408.034(1) and 408.036, Fla. Stat. In addition, AHCA is the agency designated as responsible for licensure and deficient practice surveys for health facilities, including hospices. See ch. 408, Part II and § 400.6005-.611, Fla. Stat. Pursuant to Florida Administrative Code Rule 59C-1.0355(4)(a), the Agency established a numeric formula for determining when an additional hospice program is needed in a service area. The Agency's need formula determined a need for one new hospice program in SA 6A in the application cycle at issue. That determination is unchallenged. None of the applicants argued that more than one new hospice program should be approved for Hillsborough in this cycle. Suncoast The Hospice of the Florida Suncoast (“Suncoast Pinellas”) was founded in 1977, and was one of the first hospices in Florida, and in the nation. Although it operates only in Pinellas County, Suncoast Pinellas has grown to become one of the largest nonprofit hospices in the country. Suncoast Pinellas is a subsidiary of Empath Health (“Empath”), which also provides a number of non-hospice services. As discussed further below, Empath is currently undergoing a merger with Stratum Health System (“Stratum”), which operates Tidewell Hospice in Sarasota and Manatee Counties. The Chief Executive Officer (“CEO”) of Empath and Suncoast Pinellas is Rafael Sciullo. Mr. Sciullo was recruited to be CEO of Suncoast Pinellas in 2013, where he has served ever since. When Mr. Sciullo arrived at Suncoast Pinellas, the company operated a human immunodeficiency virus (“HIV”) testing and treatment program, a PACE program, a home health program, and a palliative care program. Mr. Sciullo became concerned that patients in the HIV, PACE, and home health programs were not comfortable hearing the word “hospice,” as those patients did not view themselves as hospice patients. Mr. Sciullo reorganized Suncoast Pinellas by creating Empath in order to alleviate this concern with a more inclusive and mission directed organization. Empath is an administrative services provider that provides support to its affiliates, which include Suncoast Pinellas, Empath Partners in Care (“EPIC”),2 Suncoast PACE, Suncoast Hospice Foundation, and programs for palliative care, pharmacy, durable medical equipment (“DME”), and infusion services. Through its affiliates, Empath already provides several services within Hillsborough, including EPIC HIV services and support, and palliative care. The federal definition of hospice care requires a prognosis of a six- month or less life expectancy. However, Florida’s definition permits patients with a 12-month prognosis. Under its supportive care program, Suncoast Pinellas offers hospice services to patients with a prognosis of six to 12 months. As one of the largest not-for-profit hospices in the nation, Suncoast Pinellas offers specialized programs for veterans, the Jewish population, African Americans, the Hispanic population, and disease groups such as heart failure, Alzheimer’s, and COPD. The applicant entity for the CON is Suncoast Hospice of Hillsborough, LLC. If approved, Suncoast will appear beside Suncoast Pinellas in Empath’s organizational chart, operating as a subsidiary under the Empath Health, Inc., family of companies. Empath has entered into a Memorandum of Understanding with Stratum to merge the two organizations. The merger has not yet been accomplished; the companies are currently in the process of conducting due 2 Empath’s EPIC program provides programs and services to persons impacted by HIV and AIDS throughout the Tampa Bay area. diligence. However, the two companies have already agreed that if the merger is consummated, Mr. Sciullo will serve as the CEO of the merged entity, and will be in charge of both original entities after the merger. According to Mr. Sciullo, the merger will not distract or otherwise serve as an impediment to Suncoast’s plans to implement its new hospice program in Hillsborough. Cornerstone Cornerstone is a 501(c)(3) community-based, not-for-profit entity, founded in 1981 by compassionate nurses in Eustis, Florida, to care for patients during their last days of life. Licensed in 1984, Cornerstone (formerly, Hospice of Lake and Sumter, Inc.) has since grown to serve three hospice service areas (3E, 6B, and 7B) which encompass seven central Florida counties, including Polk County, which is contiguous to Hillsborough. Cornerstone has spent more than 35 years serving tens of thousands of patients and their loved ones in the Central Florida region. As a local, not-for-profit hospice, Cornerstone’s governing body is comprised of leaders from the communities it serves, and its board would be expanded to include new members from Hillsborough. This fosters local accountability to the populations Cornerstone serves. Due to its not-for-profit status, Cornerstone is also legally and ethically bound to benefit its communities, and its earnings are reinvested locally rather than inuring to the benefit of private owners. The Cornerstone Hospice Foundation is an independent, 501(c)(3), nonprofit foundation led by community volunteers. The purpose of the Foundation is to raise money for Cornerstone’s community programs, hospice houses, and for people with no method of paying for hospice. Cornerstone Health Services, LLC, is an affiliated entity which provides non-hospice palliative care services to patients. Cornerstone also includes Care Partners, LLC, which is a consulting and group purchasing organization that provides information and materials to other hospices and group purchasing options. Cornerstone leadership has extensive experience in hospice, including development and expansion of new programs in Florida and elsewhere. Cornerstone has achieved significant growth and expansion within its existing service areas in recent years, led largely by the team that would lead Cornerstone’s expansion into Hillsborough. Cornerstone serves all patients in need regardless of race, creed, color, gender, sexual orientation, national origin, age, disability, military status, marital status, pregnancy, or other protected status. Hospice and palliative care are the only healthcare services Cornerstone provides. This focus assures that Cornerstone is committed to providing high quality care to meet the needs of hospice patients and their families. VITAS VITAS Healthcare Corporation (“VITAS Healthcare”), the corporate parent of VITAS, is the largest provider of end-of-life care in the nation. VITAS Healthcare was initially founded in 1978 in South Florida. At that time, its leaders helped organize bipartisan legislative efforts to establish the state and federal regulatory mechanisms that guide the provision of hospice services today. Upon its inception, VITAS programs in Dade and Broward Counties participated in a federal demonstration project that resulted in the development of model clinical protocols and procedures used by hospice programs across the country. In 2018, VITAS Healthcare served 85,095 patients and maintained an average daily census of 17,743 patients among its 47 hospice programs in 14 states and the District of Columbia. As of 2018, VITAS Healthcare employed 12,176 staff members, including over 4,700 nurses nationwide. VITAS currently serves 46 of Florida’s 67 counties, which covers about 72% of Florida’s population. VITAS serves 16 of AHCA’s 27 hospice service areas under three separate licenses. VITAS successfully operates 34 satellite offices in Florida and provides facility-based care through freestanding inpatient units as well as its contracts with hospitals and nursing homes. In Florida in 2018, VITAS served over 36,000 patients, providing 3.3 million days of care with an average daily census of 9,028 patients. This was no aberration—at the time of the filing of its 6A CON application, VITAS had admitted over 35,000 patients in Florida during 2019. In addition to providing the four required levels of hospice care (see ¶ 35), VITAS also provides a full continuum of palliative and supportive care, and additional unreimbursed services that are beneficial to the hospice population it serves. VITAS has over 40 years of experience as a hospice provider, and has developed comprehensive outreach, education, and staff training programs and resources designed specifically to address the unique needs of a wide range of patient types, communities, and clinical settings. Similarly, VITAS recognizes that the needs of Florida patients vary between service areas, and it has endeavored to provide programs and services tailored to meet the needs of each community. In its Florida programs, VITAS provides complete hospice care, including medications, equipment and supplies, expert nursing care, personal care, housekeeping assistance, emotional counseling, spiritual support, caregiver education and support, grief counseling, dietary, physical, occupational and speech therapy, and volunteer support. VITAS has a long history of providing significant levels of care to all patients without regard to the ability to pay, as well as a demonstrated commitment to underserved populations such as the homeless, veterans, AIDS population, and minorities. VITAS provided almost $7 million in charity care in Florida in 2018, and $7.25 million in 2019 at the time it submitted its CON application. VITAS ensures that anyone who is appropriate for hospice services has the right to access them. VITAS is committed to giving back to the communities it serves through meaningful donations. It accomplishes this goal through VITAS Community Connections, a nonprofit organization, which makes donations and grants to local organizations and families. In 2018, VITAS made over $161,000 in charitable contributions to organizations in Florida. In that same year, VITAS contributed over $700,000 to sponsoring Florida community events. At the time of filing its Hillsborough application, VITAS employed nearly 5,500 persons in Florida, 2,235 of which are nurses. VITAS encourages and assists its nurses in obtaining board certification in hospice and palliative care through training, compensation incentives, and support. Due to VITAS Healthcare’s multi-state operations, VITAS can readily recruit staff to Florida from other markets. VITAS also relies on volunteers in a variety of roles to enhance patient care. In 2018, VITAS used 1,165 active volunteers in Florida, who provided over 145,054 volunteer hours. VITAS is led by an extremely experienced and highly qualified leadership team, many of which have long and successful tenures with the company. Hospice Care Generally Hospice refers both to care provided to terminally ill patients and the entities that provide the care. Hospice care is palliative care. Palliative care relieves or eliminates a patient's pain and suffering and helps patients remain at home. It differs from curative care, which seeks to cure a patient's illness or injury. 42 C.F.R. § 418.24(d); §§ 400.6005 and 400.601(6), Fla. Stat. Hospices provide physical, emotional, psychological, and spiritual comfort and support to patients facing death and to their families. The Medicare and Medicaid programs pay for the vast majority of hospice care. The services those programs require hospices to offer and the services the programs will pay for have become, de facto, the default definition of hospice care, the arbiter of hospice services, and the decider of when a patient is terminally ill. Florida requires a CON to establish a hospice program and regulates hospices through licensure. §§ 400.602 and 408.036(1)(d), Fla. Stat. Florida considers a patient with a life expectancy of one year or less to be terminally ill and eligible for Medicaid payment for hospice care. § 400.601(10), Fla. Stat. To be eligible for Medicare payment for hospice services, a patient must have a life expectancy of six months or less. 42 C.F.R. § 418.20; 42 C.F.R. § 418.22(b)(1). A hospice must provide a continuum of services tailored to the needs and preferences of the patient and the patient’s family delivered by an interdisciplinary team of professionals and volunteers. §§ 400.601(4) and 400.609, Fla. Stat. Hospice programs must provide physical, emotional, psychological, and spiritual support to their patients. A hospice must provide physician care, nursing care, social work services, bereavement counseling, dietary counseling, and spiritual counseling. 42 C.F.R. § 418.64; § 400.609(1)(a), Fla. Stat. In Florida, hospices must also provide, or arrange for, additional services including, but not limited to, “physical therapy, occupational therapy, speech therapy, massage therapy, home health aide services, infusion therapy, provision of medical supplies and durable medical equipment [DME], day care, homemaker and chore services, and funeral services.” § 400.609(1)(b), Fla. Stat. Federal requirements are similar. 42 C.F.R. § 418.70. Hospices are required to provide four levels of care. The levels are routine home care, general inpatient care, crisis care (also called continuous care), and respite care. Since hospice’s goal is to support a patient remaining at home, hospices provide the majority of their services in a patient’s home. Routine home care is the predominant form of hospice care. Routine care is for patients who do not need constant bedside support. A hospice may provide routine care wherever the patient lives. The location could be a residence, a skilled nursing facility (SNF), an assisted living facility (ALF), some other residential facility, or a homeless camp. Continuous care, sometimes called crisis care, may also be provided wherever the patient resides. It is more intense services for a short period of time. Continuous care supports a patient whose pain and symptoms are peaking and need quick management. With continuous care, unlike routine care, a nurse may be at a patient’s bedside 24 hours a day, seven days a week. Continuous care is an option allowing a patient to avoid admission to an inpatient facility. Hospices provide general inpatient care in a hospital, a dedicated nursing unit, or a freestanding hospice inpatient facility. To qualify for inpatient care, a patient must be acutely ill and need immediate assistance and daily monitoring to the extent that they cannot be cared for at home. Hospices must offer around-the-clock skilled nursing coverage for patients receiving general inpatient care. Respite care is caregiver relief. It allows patients to stay in an inpatient setting for up to five days in order to provide caregivers respite. Florida law requires hospices to accept all medically eligible patients. Each hospice must make its services available to all terminally ill persons and their families without regard to age, gender, national origin, sexual orientation, disability, diagnosis, cost of therapy, ability to pay, or life circumstances. A hospice may not impose any value or belief system on its patients or their families, and must respect the values and belief systems of its patients and their families. § 400.6095(1), Fla. Stat. Hospices frequently offer additional, uncompensated services that are not required by Florida licensure laws or federal Medicare requirements. Pre- hospice care and community counseling are two examples. Hospices often establish programs to meet the needs of particular populations, such as the Hispanic, African American, Jewish, veteran, and HIV/AIDS communities. Cornerstone, Suncoast Pinellas, and VITAS provide the hospice services required by state laws and funded by the Medicare benefit. All three providers also offer services beyond those required by, or paid for by, government programs. The Fixed Need Pool and Preliminary Agency Decision Pursuant to its rule-based numeric need methodology, AHCA determined and published a fixed need for one new hospice program in SA 6A, Hillsborough, in the second batching cycle of 2019. Under the Agency's need methodology, numeric need for an additional hospice program exists when the difference between projected hospice admissions and the current admissions in a service area is equal to or greater than 350. In this instance, the difference between projected hospice admissions and current admissions in SA 6A was 863, and therefore a numeric need for an additional hospice program exists in Hillsborough.3 In addition to the three litigant applicants, three other entities filed applications seeking approval for the new program. Those three applications have been deemed abandoned and are not at issue herein. On February 21, 2020, the Agency published its preliminary decision to award the hospice CON to Suncoast, and to deny the remaining applications. Thereafter, Cornerstone and VITAS both filed timely petitions for formal administrative hearing contesting the Agency’s preliminary decision. On April 1, 2020, Suncoast filed a “Cross Petition, Notice of Related Cases and Notice of Appearance” in support of the Agency decision on the competitively reviewed applications. None of the applicants petitioning for 3 According to AHCA’s need methodology, absent a showing of “not normal” circumstances, only one new hospice program may be approved for a SA at a time, regardless of the multiples of 350 “need” that may be shown. Fla. Admin. Code R. 59C-1.0355(4)(c). hearing alleged “special circumstances” or “not normal” circumstances in their application. Service Area 6A: Hillsborough County As can be seen by the map below, Hillsborough is located on the west coast of Florida along Tampa Bay. It includes 1,048 square miles of land area and 24 square miles of inland water area. Hillsborough is home to three incorporated cities: Tampa, Temple Terrace, and Plant City, with Tampa being the largest and serving as the county seat. The county is bordered by Pasco County to the north, Polk County to the east, Manatee County to the south, and Pinellas County to the west. (Source: Google Maps) According to AHCA’s Florida Population Estimates 2010-2030, published February 2015, Hillsborough’s total population as of January 2020 was estimated to be 1,439,041. Hillsborough’s total population is expected to grow to 1,557,830 by January 2025, or 8.25% over that five-year period. In 2020, 14% of Hillsborough’s population was aged 65 and older. According to the 2010 U.S. Census, 35.4% of the county population age 65 and older has a disability, and 17.2% of the county population is below the poverty level, compared to 12.2% statewide. The Hillsborough County Department of Health (“HCDOH”) reports that the county has a diverse mix of residents, with 52% White, 16% African American, 26% Hispanic, and 5% other races. Of the Hillsborough households living below the poverty level, 23.73% are Hispanic/Latino and 31.07% are African American. Nearly 10% of Hillsborough residents report not speaking English “very well.” The most recent U.S. Census indicates that the median income for households in Hillsborough is $54,742, considerably below the national average, with 17.2% reported below poverty level. A larger percentage of the county’s residents (3.3%) received cash assistance than did the state’s residents (2.2%), and a larger percentage (15.7%) received food stamp benefits than is the case for the state overall (14.3%), as reported by HCDOH. Hillsborough is currently served by two hospice providers: Lifepath Hospice (“Lifepath”); and Seasons Hospice and Palliative Care of Tampa, LLC (“Seasons”), a for-profit company. Following approval after an administrative hearing, Seasons was newly licensed to begin operations in Hillsborough in December 2016. Florida’s hospice CON rule prevents need for a new program from being shown for a period of two years following the addition of a new program to a service area. The purpose of the two-year forbearance is to allow new programs to gain a foothold in the market, and to potentially avoid a repeated need determination in future batching cycles. Hospice admissions at Lifepath for the period of July 1, 2018, through June 30, 2019, were 6,195, and for Seasons were 601. The addition of Seasons to the service area was not successful in deterring the need for yet another new program in Hillsborough. The Application Proposals and CON Conditions Suncoast Suncoast recently applied for approval for a hospice program in neighboring Pasco County, but, after a DOAH hearing, that application was denied in favor of another applicant. From that experience, Suncoast determined to better identify local needs before applying for approval in Hillsborough. Upon learning that a fixed need pool would be announced for Hillsborough, Mr. Sciullo directed his team of executives and staff over a series of strategy meetings to conduct an independent community needs assessment of Hillsborough. Mr. Sciullo tasked Kathy Rabon to oversee the development of a community needs assessment of Hillsborough to identify potential needs of Hillsborough residents, based on key informant surveys and other assessment tools. Ms. Rabon has significant experience in conducting feasibility studies for capital projects funded by the Suncoast Hospice Foundation, which she leads. Ms. Rabon began by reviewing existing community needs assessments of the county. Those assessments identified the health needs of Hillsborough’s underserved patients, and identified community leaders that informed the assessments. Ms. Rabon then contacted many of those key informants. At hearing, Ms. Rabon described the process she used to develop a community needs assessment for Hillsborough as follows: Q. When tasked with doing an assessment for Hillsborough's hospice, where did you start? What documents did you first review? A. A community needs assessment can take quite a while when you engage focus groups and need to meet with stakeholders. We didn't have the luxury of a lot of time. We also had the luxury of knowledge that other hospitals in Hillsborough County that are not-for-profit have to periodically do a community needs assessment. So rather than start from a blank piece of paper, I turned to those community needs assessments and I began compiling and gathering as many as I could that I felt were relevant to, A, the geographic boundaries of the entire county, which some did not, but B, also were timely. And I found that the Department of Health had done a very comprehensive community needs assessment in 2015-16 that had been updated in March of 2019 that I felt would provide a lot of good information. * * * I was responsible for identifying need and, if possible, identifying perhaps solutions that could be developed as a result of a partnership or a relationship or an engagement or a future plan that we could put together that would help solve a need in Hillsborough County relative to chronic and advanced illness. In addition to the HCDOH needs assessment and update, Ms. Rabon also obtained quantitative information for her assessment from the following sources: Community Health Improvement Plan 2016- 2020, Florida Department of Health in Hillsborough County, Revised January, 2018; Moffitt Cancer Center Community Health Needs Assessment Report 2016; Florida Hospital Tampa Community Needs Assessment Report 2016; Florida Hospital Carrollwood Community Needs Assessment Report 2016; South Florida Baptist Hospital 2016 Community Needs Assessment Report; Tampa General Hospital; Community Health Needs Assessment 2016; and Community Needs Assessment St. Joseph’s Hospitals Service Area 2016. Ms. Rabon also developed a key informant survey tool to elicit qualitative information regarding the healthcare needs of Hillsborough residents. The survey specifically asked about the strengths and weaknesses of the community for treatment of persons with chronic or advanced illness, and other pressing issues relating to end of life care. Those survey questions included, among others: What is your role, and responsibilities within your organization? What do you consider to be the strengths and assets of the Hillsborough community that can help improve chronic and advanced illness? What do you believe are the three most pressing issues facing those with chronic or advanced illness in Hillsborough County? From your experience, what are the greatest barriers to care for those with chronic or advanced illness? What are the strategies that could be implemented to address these barriers? Once meetings with key informants were complete, and 25 key informant surveys were returned, Ms. Rabon summarized her findings in a final Community Needs Assessment Summary. Ms. Rabon’s findings were consistent with assessments conducted by other organizations, including HCDOH, and local hospitals. The results of the Community Health Needs Assessments, Suncoast Key Informant Surveys, and detailed letters of support, identified the following gaps in end-of-life care for residents of Hillsborough: Need for Disease-Specific Programming: High cardiovascular disease mortality rates (higher than the state average and the highest of the six most populous counties in Florida) and low percentage of patients served by existing hospice providers. Other areas where there appears to be a gap in specific end-of-life programming and a large need in terms of Hillsborough resident deaths include: Alzheimer's Disease and Chronic Lower Respiratory Disease, both of which are in the top 5 leading causes of death in the county. Need for Ethnic Community-Specific Programming Nearly 30 percent of the Hillsborough population is Hispanic, with 19 percent of the county's 65+ population falling into the Hispanic ethnic category. The concentration of 65+ Hispanic residents in Hillsborough is higher than the state average. Surveys and assessments indicate a lack of knowledge in the Hispanic/Latinx[4] community in Hillsborough regarding end-of-life care. Many of these residents speak Spanish at home and/or have limited English proficiency. Hillsborough Hispanic population has low utilization of hospice due to factors including lack of regular physician and medical care, lack of information and cultural barriers. Lack of Available Resources for Homeless and Low-lncome Populations With the 5th largest homeless population in the state, Hillsborough has 1,650 homeless residents as of a Point in Time Count conducted in February 2019. Nearly 60 percent of the area’s homeless population is considered ‘sheltered’, yet there are no resources for end-of-life care for these patients where they live, whether it be an emergency shelter, safe haven or transitional housing. Additionally, 17.2 percent of the Hillsborough population lives below the poverty level and has limited access to coordinated care, including end-of- life services. Largest Veteran Population in Florida Requires Special Programming and Large Number of Resources More than 93,000 veterans currently reside in Hillsborough, with more than one-third over the age of 65. 4 Latinx is a gender-neutral neologism, sometimes used to refer to people of Latin American cultural or ethnic identity in the United States. The ?-x? suffix replaces the ?-o/-a? ending of Latino and Latina that are typical of grammatical gender in Spanish. See “Latinx,” Wikipedia (last visited March 19, 2021). While most hospice programs provide special services for veterans, Suncoast Pinellas has obtained Partner Level 4 certification by We Honor Veterans, a program of the National Hospice and Palliative Care Organization (“NHPCO”) in collaboration with the Department of Veterans Affairs (“VA”). Lack of Specialized Pediatric Hospice Program in the Area Pediatric hospice programming in Hillsborough is limited, as there are no specialized pediatric hospice providers in the county. Hillsborough is home to approximately 338,000 residents ages 0-17 in 2020, and is projected to increase to more than 368,000 by 2025. The pediatric utilization rate of hospice services in Hillsborough is low compared to the general population. For the year ended March 31, 2019, there were only five pediatric patients discharged from the hospital setting to home hospice or an inpatient hospice facility, while 106 pediatric patients died in the hospital. Absence of Continuum of Care Navigation Navigation of the healthcare system was highlighted as a key driver that will bring positive improvements to overall continuum of care in Hillsborough. Hillsborough residents are not accessing hospice services at a rate consistent with the rest of the state, and either access hospice programs very late in the disease process, or not at all. Transportation Challenges for Rural Areas of the County Transportation challenges as a deterrent to seeking medical care, particularly in rural areas of Hillsborough. Approximately one-third of the Hillsborough population is considered “transportation disadvantaged” meaning they are unable to transport themselves due to disability, older age, low income or being a high-risk minor/child. Suncoast retained David Levitt and his firm as its healthcare consultant and primary drafter of its CON application. To develop Suncoast’s application, Mr. Levitt utilized numerous reliable data sources and worked with Suncoast Pinellas’s staff. Mr. Levitt credibly confirmed the need for an additional hospice program in Hillsborough based on reliable healthcare planning data. AHCA’s CON application form, adopted by rule, requires applicants to submit letters of support with their CON applications. Suncoast complied with this requirement and included numerous letters of support from the Hillsborough community. One of the key informants identified by Ms. Rabon was Dr. Douglas Holt of the HCDOH. Dr. Holt agreed to meet with Mr. Sciullo and ultimately agreed to provide a letter of support, which was included with the Suncoast application. Mr. Sciullo also personally met with Dr. Larry Fineman, the regional medical director of HCA West Florida, who provided a letter of support. HCA West Florida hospitals are key referral sources of Suncoast Pinellas’s current hospice admissions. In addition to HCA West Florida, Suncoast Pinellas has an existing relationship with other Hillsborough hospitals: St. Joseph’s, Moffitt Cancer Center and Tampa General Hospital. Suncoast received letters of support from St. Joseph’s and Tampa General. The Agency’s witness, James McLemore, testified that letters from such referral sources were highly persuasive to the Agency, as they indicate the likelihood of successful operations. Suncoast’s witness, Dr. Larry Kay, credibly testified that he obtained letters of support from Dr. Howard Tuch, Director of Palliative Medicine at Tampa General Hospital; Dr. Larry Feinman, Chief Medical Officer at HCA West Florida; and Dr. Harmatz, the Chief Medical Officer at Brandon Regional Hospital, an HCA hospital within HCA West Florida. Those letters were included with the Suncoast application. Suncoast Pinellas currently has working relationships with BayCare, HCA, AdventHealth West Florida, Tampa General, and Moffitt hospital systems. Suncoast submitted letters from BayCare and HCA, which were included with its application. Suncoast received letters specifically related to partnering with Suncoast for inpatient services from St. Joseph’s (BayCare) and Brandon Regional (HCA). Suncoast also received a letter of support related to partnering with Suncoast for inpatient services from the Inn at University Village, a long- term care facility in Hillsborough; and support from a pediatric hospitalist who provides care to terminally ill and medically fragile children at St. Joseph’s Children’s Hospital and Johns Hopkins All Children’s Hospital. Suncoast also received letters of support from numerous community organizations, including Balance Tampa Bay and The AIDS Institute. Also included with the Suncoast application were several letters of support from [Remainder of page intentionally blank] the veterans’ community, including one from the Military Order of the World Wars.5 After considering Ms. Rabon’s Community Needs Assessment, and input from key informants, Suncoast developed programs and plans to meet each of the needs identified above. Suncoast conditioned the approval of its CON on the provision of those services. In all, Suncoast offered 19 conditions in its CON application intended to meet the unique needs of Hillsborough. Condition 1: Development of Disease Specific Programing: Suncoast is committed to providing disease-specific programming in Hillsborough: Empath Cardiac CareConnections, Empath Alzheimer’s CareConnections, and Empath Pulmonary CareConnections. Dr. Larry Kay and Dr. Janet Roman credibly testified that Suncoast will fulfill Condition 1 for disease specific programming. To fulfill Condition 1, Suncoast will provide Empath Cardiac CareConnections in Hillsborough. Dr. Roman designed and currently runs the CardiacCare Connections program in Pinellas County. Dr. Roman is a national expert in developing programs across the continuum of care to assist heart failure patients. Although Suncoast Pinellas has always treated patients with heart failure, since Dr. Roman’s arrival, cardiologists have been referring patients to Suncoast Pinellas earlier than before. Dr. Roman has trained Suncoast Pinellas’s nurses in all advanced heart failure therapies, including IV inotropes, and mechanical circulatory 5 As correctly noted by Cornerstone in its Proposed Recommended Order, letters of support included in the three applications, unless adopted by the sponsoring author at hearing or in sworn deposition received in evidence, are uncorroborated hearsay, and the contents therein may not form the basis of a finding of fact. However, the letters are not being received for the truth of the matters set forth therein, but rather the number and types of support letters included in the applications are relevant generally as a gauge of the level of community support for the proposals. The Hospice of the Fla. Suncoast, Inc. v. AHCA and Seasons Hospice and Palliative Care of Pasco Cty., DOAH Case No. 18-4986 (Fla. DOAH Sept. 5, 2019; Fla. AHCA Oct. 15, 2019) (“In a broad sense, comparison of each applicant's letters of support illuminates the differences between each applicant's engagement with the community.” FOF No. 127.). supports such as left ventricular assist devices (“LVAD”) and artificial hearts. Dr. Roman’s program has been successful at reducing hospital readmissions. Suncoast’s application provided significantly more detail about the operations of its heart program than either Cornerstone or VITAS. Cornerstone and VITAS’s descriptions of their heart programs do not reach the level of specificity of operation as Suncoast’s and are not backed up with a measure of success such as a reduction in readmissions. In furtherance of Condition 1, Suncoast will also offer Empath Alzheimer’s CareConnections. Suncoast Pinellas has already created the foundation for Empath Alzheimer’s CareConnections in Pinellas County, but has not yet been marketing the program under the brand of CareConnections. As part of Empath Alzheimer’s CareConnections, Suncoast will deploy a Music in Caregiving program for Hillsborough hospice patients, including those suffering from Alzheimer’s Disease. Suncoast will also offer Empath Pulmonary CareConnections in Hillsborough. Suncoast Pinellas has already created the foundation for Empath Pulmonary CareConnections in Pinellas County, but has not yet been marketing the program under the brand of CareConnections. Suncoast Pinellas already has several respiratory therapists full time caring for COPD and asthma patients. In Hillsborough, Suncoast plans to engage a pulmonologist as a consultant and to hire dedicated respiratory therapists as volume increases in Hillsborough. Condition 2: Development of Ethnic Community-Specific Programming Suncoast conditioned its CON application on the purchase of a mobile van staffed by a full-time bilingual LPN and a full-time bilingual social worker to discuss advanced care planning and education, and increase access to care to diverse populations. The van will operate eight hours a day, five days a week, and drive to areas in Hillsborough that have a need for the services offered by Suncoast and Empath. This outreach is intended to enhance access to care to diverse communities. The van will spend time at the HCDOH and its satellite clinics, and use Metropolitan Ministries as a resource for identifying additional locations that could benefit. The van will also visit key Latinx community locations within Hillsborough and offer Spanish language assistance. The van will be equipped with telehealth technology capabilities to link the LPN and social worker to the care navigation office to further enhance the care navigation function of the mobile van. The purpose of the mobile outreach van is to build relationships with, and trust in, the community, enhance visibility, and bring care navigation to areas of Hillsborough that may not typically access it. Suncoast Pinellas’s EPIC program has significant experience operating a mobile outreach unit. EPIC currently operates a mobile outreach and testing unit that provides HIV testing and sexually transmitted infection testing in the community. Condition 3: Development of Resources for Homeless and Low-Income Populations Suncoast conditioned its application on the development of resources for homeless and low-income populations. Under this condition, Suncoast will provide up to $25,000 annually for five years to Metropolitan Ministries. Metropolitan Ministries is a leading community-based organization in Hillsborough that serves homeless and low-income individuals. Christine Long, Chief Programs Officer for Metropolitan Ministries, provided a letter of support which was included in Suncoast’s CON application. Condition 4: Development of Specialized Veterans Program Suncoast conditioned its CON application on the development of a specialized veterans program, which includes a dedicated Veterans Professional Relations Liaison to collaborate with the local VA hospital, outpatient clinics, and veterans organizations. Suncoast Pinellas provides a wide range of specialized care for veterans, through its Empath Honors program, including Honor Flight and pinning ceremonies. Additionally, Suncoast Pinellas holds a Level 4 Certification from We Honor Veterans, a national program through the National Hospice and Palliative Care Organization (“NHPCO”) whose mission is to honor military veterans in hospice care. The NHPCO recently added a new Level 5 Partnership, for which Suncoast Pinellas has already applied for its Pinellas hospice program. Suncoast will also pursue a Level 5 Certification in Hillsborough, if awarded the CON. Condition 5: Development of Specialized Pediatric Hospice Program in Hillsborough County Suncoast will also develop a specialized pediatric hospice program in Hillsborough. Dr. Stacy Orloff started the Children’s Hospice Program at Suncoast Pinellas in 1990 and has been with Suncoast Pinellas for 30 years. Dr. Orloff helped draft the first waiver that the State of Florida submitted to CMS for approval to operate a PIC/TFK program. Once the PIC/TFK waiver was approved, Ms. Orloff led Florida’s PIC/TFK steering committee for 12 years. PIC/TFK is a Medicaid waiver program that provides palliative care services for children with a risk of a death event by age 21, and also provides counseling support for family members who lived at the child’s home, such as parents, siblings, and grandparents. A PIC/TFK provider must be a licensed hospice provider in the service area. Suncoast Pinellas has operated a PIC/TFK program in Pinellas since 2004, utilizing a pediatric interdisciplinary team to provide its PIC/TFK services. Suncoast Pinellas’s PIC/TFK program averages a census of approximately 40 children. Combining the PIC/TFK patients with pediatric patients, Suncoast Pinellas’s census averages approximately 50 children. Suncoast Pinellas has already received acknowledgment from Children’s Medical Services to permit it to operate a PIC/TFK program in Hillsborough if awarded the hospice CON. Initially, pediatric patients will be serviced by the Suncoast Pinellas pediatric staff. Suncoast Pinellas currently has sufficient staff availability to service Hillsborough at the commencement of the program. Suncoast anticipates that by the second year, the Hillsborough pediatric program will have a sufficient census to have a staff that serves only Hillsborough. VITAS’s regional Medical Director, Dr. Leyva, acknowledged that a pediatric patient will receive better care from a care team with pediatric expertise than with an adults-only team. Of the three applicants, Suncoast has demonstrated the most experience providing care to pediatric patients.6 In addition, Suncoast Pinellas has longstanding relationships with the local children’s hospitals, St. Joseph’s Children’s Hospital, and Johns Hopkins All Children’s Hospital. Concurrent care is a benefit created as part of the Affordable Care Act that allows children admitted to hospice care to continue to receive their curative care. Although all applicants have proposed providing concurrent care, only Suncoast has proposed a PIC/TFK program. Suncoast is the only applicant currently operating a perinatal loss program and miscarriage at home program. Dr. Orloff credibly confirmed that Suncoast will implement the perinatal loss program if approved in Hillsborough. Condition 6: Development of Continuum of Care Navigation Program Suncoast’s Community Needs Assessment identified that Hillsborough lacks effective access to the full continuum of healthcare services. Suncoast 6 AHCA’s witness, James McLemore, credibly testified that this is an area where Suncoast enjoys an advantage over the other applicants because “Suncoast went with an entire pediatric program.” Pinellas operates an entire care navigation department that can address any inquiry or referral regarding hospice and Empath’s other services, in order to direct that patient to the right care at the right time. All services offered by Empath, including hospice, palliative care, home health, EPIC, and PACE are available to individuals who call the Care Navigation Center. Care Navigation staff can also assist existing patients with questions involving, for example, DME. Suncoast Pinellas’s care navigation center is available 24 hours a day, 7 days a week, 365 days a year. If its application is approved, Suncoast will also offer its Care Navigation Department in Hillsborough. Condition 7: Development of a Program to Address Transportation Challenges for Rural Areas Suncoast has conditioned its application on developing a program to address transportation challenges for rural areas in Hillsborough. As part of this condition, Suncoast will provide up to $25,000 annually in bus vouchers for the first five years to current hospice patients and their families, as well as non-hospice patients. Critics of Suncoast’s plans to offer bus vouchers claimed that Hillsborough’s bus system does not reach all areas within the county. However, Suncoast has also conditioned its application on the provision of funds that may be used to purchase transportation, including ridesharing providers such as Uber. Condition 8: Interdisciplinary Palliative Care Consult Partnerships Suncoast will implement interdisciplinary palliative care partnerships with hospitals, ALFs, and nursing homes located in Hillsborough. Suncoast has already identified potential partnerships, including with Dr. Harmatz at Brandon Regional Medical Center, to launch the program. Condition 9: Dedicated Quality-of-Life Funds for Patients and Families Suncoast is committed to providing quality of life funds as described in Condition 9 in Suncoast’s CON application. Suncoast Pinellas has extensive experience with providing each interdisciplinary team with $1,200 of quality of life funds to be used to facilitate a safe environment for its patients, such as paying rent, getting rid of bedbugs, paying utilities such as electricity for air conditioning, and to power specialized medical equipment. On occasion these funds are also used to provide meaningful patient experiences, similar to the Make-a-Wish programs. Conditions 10 – 13: Development of Advisory Committees and Councils Suncoast has committed to establishing care councils and advisory committees to learn firsthand the needs and concerns of the community. A care council is made up of members from a particular community who provide input regarding the needs of the community. Suncoast Pinellas offers similar councils and committees in Pinellas County. These groups are critical to the success of Suncoast Pinellas’s mission. Condition 14: Development of Open Access Model of Care Suncoast has committed to implementing an open access model of care in Hillsborough. This condition recognizes that while some patients may be receiving complex medical treatments that may lead some to question whether the patient is terminal, those treatments are actually required for palliation and the patient’s comfort. Under this condition, Suncoast promises to admit these patients and provide coverage for their treatments. Condition 15: SAGECare Platinum Level Certification Joy Winheim testified at the final hearing regarding the HIV positive community and the LGBTQ community. Over her many years working with the HIV/AIDS community, Ms. Winheim has built lasting relationships with community partners in the Tampa Bay area, including HCDOH and the Pinellas County Health Department. Empath’s EPIC program has a permanent staff member housed within the HCDOH, and the HCDOH has physicians housed in EPIC’s Tampa office to provide medical care to EPIC’s clients. Ms. Winheim has built lasting relationships with community partners in the Tampa Bay LGBTQ community, including Metropolitan Community Church, an LGBTQ friendly church; the Tampa Bay Gay and Lesbian Chamber of Commerce; and Balance Tampa Bay. SAGE is a national organization dedicated to improving the rights of LGBTQ seniors by providing education and training to businesses and non- profits. The platinum level of SAGECare certification is the highest level and indicates that 80% of an organization’s employees and 100% of its leadership have been trained by SAGE. Leadership training is in the form of a four-hour in-person training. Employee training is in the form of a one-hour training conducted either in person or web-based. All of Empath’s entities are SAGECare certified at the platinum level. Although the platinum level certification requires only 80% of its employees to receive training, Empath Health required that 100% of its employees attend the training. SAGECare certification makes a difference to members of the LGBTQ community choosing a healthcare provider. Suncoast is committed to fulfilling this condition. Condition 16: Jewish Hospice Certification Suncoast Pinellas has a specialized Jewish Hospice Program and holds a Jewish Hospice Certification from the National Institute of Jewish Hospices. Suncoast has conditioned its CON application on achieving this same certification in Hillsborough by the end of year one. Condition 17: Joint Commission Accreditation The Joint Commission on Accreditation of Healthcare Organizations (“Joint Commission”) accreditation is the “gold standard” for hospitals, nursing homes, hospices, and other healthcare providers. Suncoast is currently accredited by the Joint Commission, and if approved, is committed to achieving Joint Commission accreditation for its Hillsborough program. Condition 18: Provision of Value-Added Services Beyond Medicare Hospice Benefit Suncoast has committed to provide its integrative medicine program in Hillsborough. Suncoast Pinellas’s existing integrative medicine program is staffed by an APRN who is also certified in acupuncture. Suncoast Pinellas’s integrative medicine program is a holistic approach for helping patients manage their symptoms with such therapies as acupuncture, Reiki,7 and aromatherapy. Suncoast Pinellas recently established a Wound, Ostomy, and Continence Nurse Program in Pinellas County to provide expertise in end-of- life wounds and incontinence issues in long-term care settings, particularly smaller ALFs that may not have the necessary staffing. Suncoast will also offer this program in Hillsborough. [Remainder of page intentionally blank] 7 Reiki (??, /'re?ki/) is a Japanese form of alternative medicine called energy healing. Reiki practitioners use a technique called palm healing or hands-on healing through which a “universal energy” is said to be transferred through the palms of the practitioner to the patient in order to encourage emotional or physical healing. Condition 19 – Limited Fundraising in Hillsborough County Suncoast has committed to limiting fundraising activities in Hillsborough. Ms. Rabon credibly testified that Suncoast can, and will, fulfill this condition.8 Suncoast’s PACE Program In addition to its conditions, Suncoast’s proposal also includes several other non-hospice services that will be made available in Hillsborough. For example, Suncoast Pinellas operates a PACE program. The PACE program provides everything from medical care to transportation for medical needs and adult daycare services, as well as respite services for caregivers. The overall goal of the PACE program is to reduce unnecessary hospital visits and nursing home placement and keep elderly participants at home. Suncoast Pinellas’s PACE program currently operates at capacity, with 325 participants enrolled. Over the last four years, Suncoast Pinellas PACE has referred 175 people to Suncoast Pinellas. And although there are approximately 14,000 eligible PACE participants in Hillsborough, there is not a PACE provider in the county. In recognition of this unmet need, Suncoast Pinellas is currently in the process of expanding PACE services to residents of Hillsborough. Suncoast’s PACE program distinguishes Suncoast from Cornerstone and VITAS, neither of which currently operates a PACE program in any of their service areas. Suncoast’s Volunteer Program Under the Medicare Conditions of Participation, hospice programs must use volunteers “in an amount that, at a minimum, equals 5 percent of 8 Both Suncoast and Vitas condition their applications on eschewing fundraising activities in SA 6A, apparently in an effort to minimize adverse impact on the two existing providers in the service area. However, neither Lifepath nor Seasons participated as a party to this litigation, or presented evidence at hearing as to revenues received through their fundraising activities. Thus, it is impossible to determine whether the conditions proposed by Suncoast and VITAS would have a material impact on either of the existing providers. the total patient care hours of all paid hospice employees and contract staff.” 42 C.F.R. § 418.78(e). Suncoast Pinellas regularly exceeds that 5% requirement and, in fact, reached 12% in the last fiscal year. Suncoast Pinellas currently has over 1,000 volunteers who support the hospice program by assisting with palliative arts, including Reiki and aromatherapy, Lifetime Legacies, pediatric patients, and transportation. Suncoast Pinellas’s volunteers also assist with Suncoast’s Pet Peace of Mind Program, for which Suncoast Pinellas won the inaugural award for program of the year in 2019. Suncoast is the only applicant that operates a teen volunteer program. Suncoast Pinellas’s teen volunteer program was established in 1994 and was the first of its kind in the entire country. In 1998, it was awarded the Presidential Point of Light award. Suncoast Pinellas’s Volunteer Services Director, Melissa More, regularly consults with hospices across the country on the development of teen volunteer programs. Ninety of Suncoast Pinellas’s 1,000 volunteers currently live in Hillsborough, but travel to Pinellas to volunteer at Suncoast Pinellas. Nine of those volunteers submitted letters of support for Suncoast’s CON application to serve Hillsborough. Doctor Direct Program Suncoast Pinellas’s existing Doctor Direct Program enables physicians in the community and their ancillary referral partners to contact a Suncoast Pinellas physician 24/7, who can answer any questions about a patient they think might be eligible for hospice, and questions related to other Suncoast Pinellas programs. Suncoast will provide its Doctor Direct Program in Hillsborough. Plan for Inpatient Services Suncoast received letters of support from hospitals and a nursing home indicating a willingness to enter into a contract for inpatient services with Suncoast. Suncoast intends to offer both inpatient units and “scatter- bed” arrangements with these providers. Suncoast received letters specifically related to potential partnerships with St. Joseph’s (BayCare) and Brandon Regional (HCA) for the provision of inpatient hospice services. Suncoast also received a letter related to a potential partnership with the Inn at University Village, a long-term care facility in Hillsborough, for the provision of inpatient services. Telehealth Suncoast Pinellas offers telehealth services using CMS and HIPAA- approved software so that patients can keep meaningful connections with their family and friends, regardless of ability to travel. In Hillsborough, Suncoast will provide nurses, social workers, and chaplains with traveling technology for use in the patient’s home to connect with family and friends. Utilizing telehealth in this way will help to minimize emergency room visits and hospitalizations. Suncoast will be prepared to implement its telehealth program in Hillsborough on day one of operation if awarded the CON. Outreach Efforts to Diverse Communities Suncoast is committed to, and has a proven track record of, community outreach efforts to diverse communities. As part of its outreach efforts in Hillsborough, Empath’s Vice President of Access and Inclusion, Karen Davis-Pritchett, met with the Executive Director of the Hispanic Service Council, Maria Pinzon, to discuss the organization’s outreach efforts and gain insight into the Hispanic community in Hillsborough. Ms. Davis- Pritchett learned that the Hispanic community in Hillsborough differs from the Hispanic community in Pinellas, in that Hillsborough has a large and spread out migrant population. Ms. Davis-Pritchett and Ms. Pinzon also discussed the transportation issues facing residents of Hillsborough. To address these transportation issues, Suncoast conditioned its CON application on the purchase and use of a mobile outreach van with bilingual staff to conduct outreach to the Hispanic and other diverse communities. Suncoast also conditioned its application on the provision of vouchers that may be used for buses or ride-sharing services. Ultimately, Suncoast obtained a letter of support from Ms. Pinzon, which was submitted with its CON application. Additionally, Suncoast conditioned its application on recruiting four community partnership specialists, who will conduct outreach to the African American community, the Hispanic community, the Veterans community, and the Jewish community, and six professional liaisons who will conduct outreach to clinical partners in Hillsborough. All of these positions will be dedicated to Hillsborough and be filled by individuals who are connected to these communities, and understand the importance of access to hospice care. Suncoast’s proposal includes a bilingual medical director, Dr. Jerez- Marte, for its Hillsborough program. Dr. Jerez-Marte regularly speaks Spanish with patients and staff, which would be a benefit to Hispanic patients in Hillsborough. Mr. Sciullo credibly testified that Suncoast will offer high quality hospice services in SA 6A, and will fulfill the 19 conditions proposed in its application. Cornerstone Based on its review of data and analytics that Cornerstone relies upon and conducts as part of its ongoing operations in Florida, Cornerstone recognized in the second quarter of 2019, long before AHCA published its need projections, that there was need for an additional hospice program to enhance access to hospice services in Hillsborough. Regardless of the service area, Cornerstone offers quality hospice care through consistent policies, protocols, and programs to ensure that patients are getting the highest quality care possible. Cornerstone will bring all aspects of its existing hospice programs and services to Hillsborough, including all of the programs and services described throughout its application. However, Cornerstone recognizes each service area is different in terms of the needs and access issues patients face, whether based on demographics, geography, infrastructure, a lack of information about hospice, or other factors. When looking to enter a market, Cornerstone conducts a detailed community-oriented needs assessment to determine the specific needs of the community with regard to hospice to best understand how to enhance access to quality hospice services. Cornerstone explores each potential new area to identify the cultural, ethnic, and religious makeup of the community, the current providers of end- of-life care in the community, and the unmet needs and gaps in care, which is critical to understanding where issues may lie. This allows Cornerstone to build and develop an appropriate operational plan to meet the needs identified in a particular market. Cornerstone conducted this type of analysis for its recent successful expansion in Marietta, Georgia, and has had success expanding access to hospice in its existing markets through ongoing similar analyses. Cornerstone conducted an analysis of Hillsborough similar to those it conducts in its existing markets and in expansion efforts outside its existing markets. In its assessment of Hillsborough, Cornerstone relied, in part, on the extensive knowledge of its senior leaders and outreach personnel, many of whom live and previously worked in Hillsborough, with regard to the population characteristics and needs of the Hillsborough area. This experience in the target service area affords Cornerstone’s team a detailed knowledge of the hospice-related needs of the county. Mr. D’Auria, who conducted much of the analytics internally for Cornerstone, also oversaw a team of Cornerstone staff who spent several weeks canvassing Hillsborough at a grassroots level. The Cornerstone team spoke to residents, medical professionals, community leaders, SNFs, ALFs, and hospitals, among others, on the local experience of hospice care, to identify any areas of concern regarding unmet needs or perceived improvements necessary relative to the provision of hospice care by the current providers. Cornerstone’s retained health planning experts, Mr. Roy Brady and Mr. Gene Nelson, further undertook an extensive data-driven analysis of Hillsborough’s health-related needs to explore the access issues and service gaps identified in Cornerstone’s analytics, knowledge of and discussions in the local community, as well as the issues raised in community health needs assessments,9 letters of support, and other resources. Together, the team concluded that quality hospice services are available in Hillsborough County through existing providers LifePath and Seasons Hospice. That care is available to patients of all ages and demographic groups with virtually any end-stage disease process. Yet some patients simply are not accessing hospice services at the expected rate in Hillsborough. For example, Cornerstone’s analyses identified specific unmet community need among particular geographic areas, as well as among persons with a diagnosis other than cancer, particularly those under age 65, persons with end-stage respiratory disease, the Hispanic and African American communities, migrant communities, residents of smaller ALFs, and veterans. Based upon its analysis of the healthcare needs of Hillsborough, Cornerstone included multiple conditions intended to address those needs. In 9 Cornerstone considered the health needs assessments released by Tampa General Hospital and the Moffitt Cancer Center, both published in 2019. Cornerstone also considered the health needs assessment prepared by HCDOH issued on April 1, 2016, as updated, including the March 2019 update. all, Cornerstone proposed 10 conditions in its CON application targeted to meet the hospice needs of Hillsborough: Licensure of the Hospice Program: Cornerstone commits to apply for licensure within 5 days of receipt of the CON to ensure that its service delivery begins as soon as practicable to enhance and expand hospice and community education and bereavement services in SA 6A; Hispanic Outreach: Cornerstone commits to provide two full-time salaried positions for bilingual staff as part of its Community Education Team. These Community Education Team members will be responsible for the development, implementation, coordination and evaluation of programs to increase community knowledge and access to hospice services, particularly designed to reach the Hispanic community in Spanish. Bilingual Volunteers: Cornerstone commits to recruit bilingual volunteers. Patients’ demographic information, including other languages spoken, is already routinely collected so that the most compatible volunteer can be assigned to fill each patient’s visiting request. Offices: Cornerstone commits to establish its first program office in the Brandon area (zip code 33511 or 33584) during the first year of operation. Cornerstone commits to establish a satellite office in the Town & Country area (zip code 33615 or 33634) during the second year of operations. Complimentary Therapies: Cornerstone conditions its application on offering alternative therapies to patients that may include massage therapy, music therapy, play therapy, and holistic (non-drug) pain therapy. These complimentary therapies are not generally considered to be part of the hospice's core services, but are enhancements to the patient’s care which often have a marked impact on the quality of life during their last days. Veterans: Cornerstone commits to providing services tailored to the military veterans in the community. Cornerstone will immediately upon licensure expand its existing We Honor Veterans Level 4 program to serve Hillsborough and will provide the same broad range of programs and services to veterans in Hillsborough as it currently provides in its existing service areas. Bereavement Counseling for Parents: Cornerstone will implement a program in its second year of operation which will provide outreach for bereavement and anticipatory grief counseling for parents of infants who have died. The Tampa area has several hospitals which provide high-level newborn and infant services such as Level III NICU and other programs, consequently there is a higher than average infant mortality rate due to this concentration of high-level services. Cornerstone will work with the local hospitals which provide high-level neonatal intensive care to develop and carry out this program. Cooperation with Local Community Organizations: Cornerstone commits to donate at least $25,000.00 for four years to non-profit community organizations focused upon providing greater healthcare access, disease advocacy groups and professional associations located in SA 6A. These donations will be to assist with their core missions, which foster access to care, and in collaboration with Cornerstone to provide educational content on end-of-life care. Separate Foundation Account: Cornerstone will donate $25,000.00 to a segregated account for SA 6A maintained and controlled by the Cornerstone Hospice Foundation. Additionally, all donations made to Cornerstone or the Foundation from SA 6A, or identified as a gift in honor of a patient served in the 6A program, shall be maintained in this segregated account and only used for the benefit of patients and services in Hillsborough. This account will be used to meet the special needs of patients in Hillsborough which are not covered under the Medicare hospice benefit and cannot be met through insurance, private resources, or community organization services or programs. Continuing Education Programming (CEUs): Cornerstone will commit to extending free CEU in- services to the healthcare community in Hillsborough. Topics will cover a wide range of both required and pertinent subjects and will include information on appropriate conditions and diagnoses for hospice admission, particularly for non-cancer patients. A minimum of 10 in-services will be offered in a variety of healthcare settings during each of the first five years. Additional CEU will be provided on an ongoing basis. In addition to formulating CON conditions, Cornerstone used information gleaned from its community exploration to develop an operational plan detailing the number and type of staff to hire, which programs to offer, and how to tailor its outreach and education to best enhance access to hospice services in Hillsborough to meet the unmet need. Given Cornerstone’s existing outreach to area providers in Hillsborough, such as Moffitt, Tampa General Hospital, and the VA, which already discharge patients to Cornerstone in neighboring service areas, Cornerstone fully expects that it will receive referrals to its hospice from providers throughout Hillsborough upon the initiation of operations in the county. Cornerstone will provide hospice services to those and any other patients throughout Hillsborough from day one. However, when seeking to expand access in new or existing markets, Cornerstone focuses not on taking patients from existing providers but on enhancing access to groups and populations that have been overlooked, or whose needs are not otherwise being met by existing hospices. Cornerstone therefore developed a phased operational plan to focus its outreach and education efforts on areas where there are barriers to access, rather than simply scattering their efforts haphazardly or concentrating on areas that already have a heavy hospice presence. Phase One of Cornerstone’s operational plan will begin immediately upon licensure and continue through the first six months of operation. During this time, Cornerstone will focus outreach and education efforts heavily on the underserved southeast portion of Hillsborough, including Plant City, Valrico, Brandon, Riverview, Mango, and Sun City Center. Phase One includes 68 ALFs, six SNFs, and four hospitals. Almost one-third of the population of Hillsborough resides in this area, and an estimated 28 percent of the residents are Hispanic, and 14 percent are African American. There is also a large, underserved migrant population in this area. Cornerstone conditioned its application on opening an office in Brandon during this initial phase in the first year of operation. Phase Two will expand Cornerstone’s targeted outreach efforts into the southwest quadrant of Hillsborough, including the Apollo Beach, Ruskin, Gibsonton, Progress Village, and Palm River areas. While the population of this phase is smaller than Phase One, the two areas combined make up almost a third of the county’s Hispanic population, and a fourth of the county’s African American population. Phase Three will reach into the broader Tampa area, including towns such as Temple Terrace, Pebble Creek, University, Ybor City, and Carrollwood. This is the largest and most populated of the four phases; however, it is also currently the most hospice-penetrated area of the county as the two existing providers, LifePath and Seasons, each have offices in Phase Three. There is also a hospice house and two hospice inpatient units in the area as well. Because this area already has better hospice visibility and access, and to avoid siphoning patients from existing providers, Cornerstone will focus on this area after Phases One and Two. Cornerstone will ramp up its outreach staffing consistent with the increased area, facilities, and population added during Phase Three. Combined, the first three phases of the operational plan will offer enhanced outreach and education to 90% of the Hillsborough population starting at the beginning of year two operations. Phase Four will encompass the remainder of the county to the west of Tampa in the Town ‘n’ Country area. While this area represents only about 10% of the county’s population, Phase Four has no hospice visibility currently in the form of hospice offices, hospice houses, or hospice inpatient units. Cornerstone has conditioned its application on establishing an office in the Town ‘n’ Country area within project year two to enhance hospice visibility and access in this area of the county. Upon implementation of Phase Four, Cornerstone’s targeted outreach and education will be fully integrated throughout the county. Cornerstone’s application included more than 174 letters of support for its proposal. The letters of support are from a broad range of individuals and facilities located within and outside Hillsborough, including families, SNFs, ALFs, hospitals, vendors, and local charitable organizations, among others. Cornerstone presented testimony from three authors of letters of support, Andrea Kowalski, Eric Luetkemeyer, and Colonel (Ret.) Gary Clark. Ms. Kowalski is an employee benefits coordinator for USI Insurance Representatives in Tampa who works with Cornerstone to build benefits programs for its employees. In addition to authoring her own letter of support, Ms. Kowalski also assisted in gathering approximately 40 additional letters of support for Cornerstone from her colleagues in Hillsborough. Ms. Kowalski strongly supports Cornerstone’s approval and indicated the community would benefit not only from enhanced access to Cornerstone’s excellence and expertise in caring for those with advanced illness, but also from the addition of a highly-regarded employer, which will provide additional options for healthcare workers and financial benefits as Cornerstone reinvests in the community. Mr. Leutkemeyer is the COO for Spectrum Medical Partners (“Spectrum”), the largest privately-held hospitalist group in Florida. Spectrum manages roughly 400 providers across the state, the majority of which (85%) are medical doctors or doctors of osteopathic medicine, either in hospital or post-acute settings, and sees roughly 2,000 patients per day. Spectrum’s footprint includes coverage in Hillsborough for entities such as Simply or Humana with which Spectrum contracts statewide. Spectrum is looking to expand its footprint and services in Hillsborough in the near future. As detailed in his letter, Mr. Luetkemeyer supports Cornerstone’s efforts to establish a hospice program in Hillsborough, indicated a desire to work with Cornerstone in the county if awarded, and believes the community would benefit from the additional resources and quality care that Cornerstone would provide. Colonel Clark, who retired from the United States Air Force in 1993, is co-founder and current Chairman of the Polk County Veterans Council, a volunteer organization of individuals interested in assisting veterans. Colonel Clark is also affiliated with, and participates in, a number of veterans organizations in Hillsborough, including as an adviser to the Mission United Suncoast Chapter in Hillsborough, which primarily assists veterans in transitioning from service to the civilian world. He also serves on the management advisory committee of James A. Haley Veterans’ Hospital in Tampa, which provides a broad spectrum of hospital-based care to area veterans. Colonel Clark has significant experience with Cornerstone through its participation in the Polk County Veterans Council, including on the Council’s committee for the Flight to Honor program, which provides veterans a flight to Washington D.C. to visit war memorials. If a veteran is unable to make the flight, a virtual flight and tour, as well as ceremonies or presentations, are provided by Cornerstone to veterans enrolled in hospice. Cornerstone is heavily involved in the Council’s Flight to Honor program— participating on the committee, recruiting volunteers, working with local schools to gather letters for the veterans on the flights, arranging for orientation prior to the flights, and putting on the virtual flights for those Veterans unable to make the flight due to various disabilities. Colonel Clark is also familiar with Cornerstone’s efforts to support veterans at James A. Haley Veterans’ Hospital in Tampa. Colonel Clark described Cornerstone’s support not only for veterans but for the community overall as “magnificent,” and detailed his support for Cornerstone’s application in a letter of support that is included in Cornerstone’s application. Cornerstone is well-positioned to quickly establish a successful hospice program to enhance access in Hillsborough, and its proposal is a carefully considered, long range plan that would bring its established and proven processes, procedures, and programs to the residents of the county. Cornerstone also posits that its existing presence nearby in Lakeland will enhance its ability to topple barriers to care and serve patients in adjacent SA 6A immediately. For example, Cornerstone has existing relationships with veterans groups that serve both Polk and Hillsborough, and will utilize those relationships to enhance access to the large veteran population in Hillsborough, as highlighted through Cornerstone’s condition to provide services tailored to the veteran community. VITAS VITAS, which operates a hospice program in adjacent SA 6B, proposes to expand into SA 6A under its existing license. This will allow VITAS to begin serving patients quickly without creating an entirely new administrative infrastructure for the opening. Although VITAS provides many of the same core programs in each of its service areas, it also recognizes that each community is different. VITAS performed a qualitative and quantitative assessment that examined the specific needs of Hillsborough regarding hospice care and services. Through its consultants and internal team, VITAS identified several communities, patient types, and clinical settings that are underserved in SA 6A. These include: the African American, Hispanic, and migrant communities, particularly those age 65 and older; impoverished, food insecure and homeless communities; patients with non-cancer diagnoses such as pulmonary disease, cardiac disease, Alzheimer’s Disease, and patients with sepsis; cancer patients in need of palliative care; high acuity patients in need of complex services and those needing admissions during evenings and weekends; patients requiring admission after hours and on weekends; and patients who reside in nursing homes and small ALFs. To understand the hospice needs within Hillsborough, VITAS conducted a two-step review—(1) analyzing data from a wide variety of sources including Medicare, AHCA, Florida Department of Elder Affairs, Florida CHARTS, and demographic and socioeconomic data; and (2) meeting with some healthcare and social service providers in Hillsborough. Key members of VITAS’s leadership team, including Patty Husted, Mark Hayes, and Dr. Shega, conducted an assessment in Hillsborough to identify the unmet need within the community and underserved populations. VITAS’s needs assessment team physically went into Hillsborough to visit nursing homes, ALFs, hospitals, and physicians to determine the unmet need and how to achieve greater access to hospice services for the residents of Hillsborough. VITAS’s team spent a significant amount of time conducting hospice outreach and education in Hillsborough in furtherance of the needs assessment. Specifically, VITAS’s team met with hospitals including H. Lee Moffitt Cancer Center, Baptist Health, BayCare, St. Joseph’s, and Brandon Regional; nursing homes, such as Hudson Manor, Ybor Health and Rehabilitation Center; and physician and nurse practitioner groups. VITAS’s needs assessment team also participated in physician advisory council meetings as part of its needs assessment for Hillsborough. During these meetings, VITAS gained perspective from these local physicians regarding the challenges faced by patients in need of hospice services in SA 6A, as well as insight as to what VITAS could bring from its existing programs to fill the unmet needs. VITAS also drew on the knowledge of the 18 VITAS employees currently living in Hillsborough. To address the needs it identified in SA 6A, VITAS proposes a broad array of programs and services to be offered in Hillsborough which are specifically targeted to increase the availability and accessibility of hospice services for underserved groups and Hillsborough residents more broadly. To demonstrate its commitment, VITAS conditioned its CON application on providing the following 20 programs and services in SA 6A: VITAS Pulmonary Care Program. VITAS Cardiac Care Program. Clinical research and support for caregivers of patients with Alzheimer’s and dementia. VITAS Sepsis Care Program. Veterans programs, including achieving Level 4 commitment to the We Honor Veterans program within the first two years of operation in SA 6A. Bridging-the-Gap Program and Medical/Spiritual Toolkit, which is an outreach and end-of-life education tool for African American and other minority communities. ALF Outreach and CORE Training Program. Palliative care resources and access to complex and high acuity services, including engaging area residents with serious illness in advance care planning and goals of care conversations, as well as offering palliative chemotherapy, inotrope drips and radiation to optimize pain and symptom management as appropriate. Provider clinical education programs for physicians, nurses, chaplains, HHA’s and social workers. Quality and Patient Satisfaction Program, including hiring a full-time Performance Improvement Specialist within the first six months of operation dedicated to supporting quality and performance improvement programs for the 6A hospice program. VITAS staff training and qualification, ensuring the medical director covering SA 6A will be board-certified in hospice and palliative care medicine. Hospice office locations. Deployment of a mobile van to increase access and outreach to rural counties. VITAS will not solicit donations. Outreach and end-of-life education for 6A residents experiencing homelessness, food insecurity, and limited access to healthcare, including advanced care planning for area homeless shelter residents and a partnership to provide a grant for housing and food assistance with a community organization. $5,000 will be distributed during the first two years to the Hispanic Services Coalition or similar qualified organization for promoting academics, healthy communities and engagement of Latinos. Outreach program for underserved residents of SA 6A. Educational grant, to the University of South Florida Foundation including $250,000 for fellowships, scholarships, education and workforce development as well as $20,000 for diversity initiatives. Inpatient hospice house and shelter for natural disasters and hurricanes. Medicaid Managed Care education Services beyond the hospice benefit, including, among others: 24/7 Telecare Program and access to admission on evenings and weekends, including outreach and end-of-life education for residents experiencing poverty, food insecurity, homelessness and/or food insecurity, including nutrition services, advanced care planning for shelter residents, and housing assistance. Hospice Education and Low Literacy (HELLO) Program. Multilingual education materials in several languages including Spanish, Chinese, Korean, Portuguese, Russian, Vietnamese and Creole. CAHPS Ambassador Program to generate interest, awareness and encourage ownership by team members of their team’s performance on CAHPS survey results. Community outreach and education programs. Partnership with a local college for fellowships, scholarships, education and workforce development and diversity initiatives. VITAS’s application contains approximately 50 letters supporting its proposed program, the vast majority of which are from hospitals, nursing homes, ALFs, physicians, and community organizations in Hillsborough County with direct hospice experience. VITAS obtained these letters of support as part of its community-oriented needs assessment, and they attest to the community’s confidence in VITAS’s ability to meet hospice care needs in Hillsborough. Included are letters of support from Cynthia Chavez, Executive Director at Hudson Manor Assisted Living; Brian Pollett, Administrator at Ybor Health and Rehabilitation Center; and Dr. Jorge Alfonso, Regional Chief Medical Officer at Dedicated Senior Medical Center. All three providers expressed a local need to address high acuity patients, including greater access to continuous home care. Statutory and Rule Review Criteria The review criteria are found in sections 408.035, 408.037, and 408.039, and rules 59C-1.008 and 59C-1.0355. (Prehearing Stipulation). Section 408.035(1) - Need for the health care facilities being proposed There are currently two licensed hospice programs in hospice SA 6A, and a need for one additional hospice program, as calculated using the need methodology found in rule 59C-1.0355(4), and published by AHCA, without challenge. AHCA’s need calculation compares reported hospice admissions during the base year with projected admissions in the horizon year and finds need if the difference between base and horizon year admissions exceeds 350, assuming there are no recently-licensed or CON-approved hospice programs in the service area. In this case, AHCA’s calculation revealed a net need of 863 hospice admissions for the January 2021 planning horizon. Each Applicant has put forth a proposal to meet the calculated need for one additional hospice program in Hillsborough. None of the applicants are advocating the approval of more than one new program. Section 408.035(2) – Availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district. It is undisputed that quality hospice services are available in Hillsborough today through existing providers LifePath and Seasons, including for patients of all ages and with essentially all end-stage disease processes, as well as for patients of all demographic groups. Relevant data demonstrates discharges to hospice in Hillsborough for a wide range of diagnoses and demographic groups, including African American and Hispanic patients, non-cancer and cancer patients, both over and under age 65; patients with end-stage cardiac disease; end-stage pulmonary disease and dementia, including Alzheimer’s disease, among others. However, despite the availability of quality hospice services, some patients simply are not accessing hospice services at the rate expected in SA 6A, as reflected by low penetration rates and low discharge-to-hospice rates, particularly within certain major disease categories and demographic groups, including Hispanic and African American residents. All three applicants agreed that the underutilization is concentrated among certain patient populations, including demographic groups and disease groups. Generally, all three applicants agreed that the Hispanic, African- American, veteran, and homeless populations are currently underserved in Hillsborough. In addition, Suncoast points to the need for a specialized pediatric hospice program in SA 6A; Cornerstone argues that non-cancer patients younger than age 65 are in need of enhanced access, as are residents of smaller ALF’s; and VITAS asserts that patients with respiratory, sepsis, cardiac, and Alzheimer’s diseases are underserved, as are patients requiring continuous care and high acuity services, such as high-flow oxygen. VITAS’s argument is based largely on a claim that the existing providers are not providing “any measurable continuous care,” as well as hearsay reports from area hospitals indicating a lack of high-acuity services available through existing hospice providers. However, VITAS’s health planning expert conceded that, in fact, existing providers are offering continuous care, and she was unable to quantify any purported dearth of continuous care in Hillsborough as compared to other providers or the statewide average. The record establishes that continuous care is part-and- parcel of the hospice benefit, and there was no evidence presented at final hearing to support the claimed lack of availability of that service from existing providers. Based on the foregoing, the evidence tended to show quality hospice care is available in SA 6A, that it is underutilized, and that the underutilization is driven by accessibility challenges among particular patient groups, and supports AHCA’s determination that another hospice program is needed in Hillsborough. Section 408.035(3) - Ability of the applicant to provide quality ofcare and the applicant’s record of providing quality of care Cornerstone is the only applicant accredited by the Joint Commission, which is a national symbol of quality that reflects its commitment to meeting high quality performance standards. Cornerstone’s Joint Commission accreditation, which was just recertified in 2020, and the accompanying high standards of quality care, will carry over to its new SA 6A program. As a new entity, Suncoast is not Joint Commission accredited, but conditions its application on achieving such accreditation by the end of year two. Suncoast Pinellas is Joint Commission accredited, and indeed, is one of only a handful of hospices nationwide, along with Cornerstone, to hold Joint Commission accreditation and/or certification. While VITAS represents that some affiliated VITAS hospice programs are Joint Commission accredited, VITAS, the applicant here, is not accredited by the Joint Commission, and makes no representation that it will seek or attain such accreditation for its new hospice program in SA 6A. There are two universal metrics codified in federal law that are used as a proxy for assessing the quality of care offered by hospice programs— Hospice Item Set (“HIS”) scores and Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) survey scores. See 42 C.F.R. § 418.312; see also § 400.60501, Fla. Stat. (2020). CAHPS surveys are a subjective metric sent to family members and other caregivers months after a patient's death. The survey asks respondents to provide ratings like: “would definitely recommend,” “would probably recommend,” “would probably not recommend,” and “would definitely not recommend.” It also seeks yes or no responses to statements like: the hospice team “always communicated well,” “always provided timely help,” “always treated the patient with respect,” and “provided the right amount of emotional and spiritual support.” It also asks if the patient always got the help they needed for pain and symptoms, and if “they” received the training they needed. The CAHPS survey was created by CMS in conjunction with the Agency for Healthcare Research and Quality to measure and assess the care experience provided by a hospice. The purpose of the Hospice Compare Website is to allow the public to compare quality scores for CAHPS among different hospice providers. CAHPS scores are one measure of quality that is intended to allow for comparison across hospice programs. Significant time at final hearing was dedicated, through multiple witnesses, to discussing the strengths and weaknesses of CAHPS scores as a measure of quality. Ultimately, the greater weight of the evidence supports that CAHPS scores are an indicator of quality, but are not the only consideration, and suffer from limitations that prohibit drawing distinctions from minor differences in scores. The three applicants’ CAHPS scores are summarized in this chart: (Suncoast Ex. 42, BS p. 12203) While it is true that Suncoast Pinellas’s scores on all CAHPS measures are higher than those of Cornerstone, the slight difference between Suncoast Pinellas and Cornerstone is not significant given the subjective nature of the survey instrument. However, both Suncoast Pinellas and Cornerstone do score significantly higher than VITAS on most measures. Cornerstone’s CAHPS scores meet or exceed state averages on six of the eight measures, are within one to three points of the state average on the remaining two measures, and its average CAHPS score exceeds the state average. As a new entity, Suncoast does not have CAHPS scores. Suncoast Pinellas’s CAHPS scores meet or exceed state averages on six of the eight measures, are within one to two points of the state average on the remaining two measures, and its average CAHPS score exceeds the state average. In contrast, VITAS’s CAHPS scores fall below the state average on all eight metrics, fall five to seven points below the state average on seven of the eight metrics, and its average CAHPS score for all measures combined falls five points below the state average. Cornerstone and Suncoast Pinellas are within one to three points of each other on every CAHPS metric. The difference in scores between Cornerstone and Suncoast Pinellas is not statistically significant or meaningful, particularly given the shortcomings of CAHPS scoring. VITAS’s CAHPS scores are below both Cornerstone and Suncoast Pinellas, falling six and eight points below Cornerstone and Suncoast Pinellas, respectively, on the average of all CAHPS metrics. This difference is meaningful, particularly when viewed in the context of VITAS’s history of substantiated complaints discussed below. HIS scores, which assess documentation of various items, are more a process or compliance measure than a quality measure. Suncoast Pinellas’s HIS scores exceed the state and national average on all metrics, albeit most scores are within two points of the state average. Cornerstone’s HIS scores are on par with state averages on most metrics and meet or exceed the national average on every metric, except Pain Assessment. Cornerstone has worked to substantially improve its Pain Assessment score through better documentation protocols, raising its score from 52.1 to 89.1 in the last few years, and is implementing a new Electronic Records Management system to further improve its scores. VITAS’s HIS scores are on par with state averages on most metrics, and meet or exceed the national average on all metrics except Visits When Death Imminent. VITAS scores 68.4 on Visits When Death Imminent compared to the state and national averages of 83.2 and 82.4, respectively. As measured by the HIS scores, there was no credible, persuasive testimony establishing a meaningful difference among the three applicants. In contrast to CAHPS and HIS scores, the number and substance of complaints substantiated against each applicant by AHCA is a more direct indicator of quality of care. Suncoast has no prior hospice operations history, and therefore no prior substantiated complaints. Suncoast Pinellas has had only three substantiated complaints since 2008, and none since 2013. Cornerstone has only two substantiated complaints since 2008, and only one since Mr. Lee took over as CEO of Cornerstone in late 2012. VITAS has 73 substantiated complaints since 2008, including 10 substantiated complaints in the three years ending November 20, 2019, just prior to submission of the CON application at issue here. Between November 20, 2019, and June 17, 2020, VITAS had five additional substantiated complaints. VITAS’s health planning expert, Ms. Platt, also considered all AHCA survey deficiencies, whether based upon a complaint, life safety survey, or otherwise. Ms. Platt’s analysis demonstrates that VITAS had 80 such surveys with deficiencies since 2012, including 26 between January 2018 and June 2020. VITAS argues that its greater number of substantiated complaints are the consequence of higher patient volumes than Suncoast and Cornerstone. However, even taking into consideration the greater number of patient days provided by VITAS, VITAS had infinitely more surveys with deficiencies in 2019 than Cornerstone, which had zero. And VITAS had five times as many surveys with deficiencies for 2018 and 2019 as Cornerstone. A comparison of VITAS to Suncoast Pinellas yields similar results, with VITAS having significantly more surveys with deficiencies than Suncoast Pinellas, even when taking into consideration the greater number of patient days provided by VITAS. Complaints substantiated against VITAS demonstrate failures in many areas of patient care, including some of the specific aspects of hospice care at which VITAS claims to excel beyond other providers, such as after- hours care, the provision of continuous care, and care to patients wherever they live, including smaller ALFs. For example, a substantiated complaint against VITAS in November 2019 included a finding of “immediate jeopardy”—the most severe level of deficiency possible—for a patient who failed to receive proper care after-hours at end-of-life, resulting in a particularly painful death for the patient, and an excruciating experience for the patient’s daughter who witnessed her mother’s painful death, unaccompanied by hospice personnel. Two additional substantiated complaints from January and February 2020 found deficiencies in VITAS’s care to patients on continuous care, including one where the VITAS nurse had headphones in and was not paying attention when the patient fell. Indeed, VITAS’s own internal review of the substantiated complaint involving the patient who fell confirmed an upward trend in falls among VITAS patients. And, as recently as June 2020, a separate substantiated complaint found that VITAS abandoned a patient on continuous care, requiring the patient to be transferred to the hospital rather than continue to receive care in the “small ALF” where the patient resided. VITAS acknowledged the patients at issue in the substantiated complaints discussed at final hearing did not receive quality hospice care. Those five examples are only a sampling of the complaints substantiated against VITAS, and the others demonstrate similar quality deficiencies. The number of substantiated complaints weighs in favor of Cornerstone and Suncoast, and heavily against VITAS with regard to record of providing quality of care. There is no meaningful difference between Cornerstone and Suncoast in regard to substantiated complaints, and neither is entitled to preference in this regard. On balance, among the three applicants, the quality of care provided by Suncoast and Cornerstone is on equal footing, with both having a distinct advantage over VITAS. Section 408.035(4) - Availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; and Section 408.035(6): The immediate and long-term financial feasibility of the project The parties stipulated that each of the applicants have available funds for capital and operating expenditures in the short term for purposes of project accomplishment and operation. Suncoast demonstrated that it has the resources to accomplish its proposed project. Suncoast provided detailed descriptions of the personnel that would be required to successfully implement its proposed program. Suncoast has reasonably projected the types of staff necessary to operate Suncoast in year 1 and 2 of operation. At hearing, Suncoast witnesses credibly described the roles of the staff contained in Suncoast’s Schedule 6, including the roles of administrator, care team manager, administrative assistant, regional hospice scheduler, business development liaisons, physicians, program director, nurses, hospice aides, respiratory therapists, staff for the mobile van in Condition 2 of its application, community partnership specialists, social workers, patient social team lead, chaplain, volunteer coordinator, and senior staff nurse. Suncoast’s financial expert, Armand Balsano, testified that part of his role in preparing Suncoast’s CON application was working with Suncoast Pinellas’s Chief Financial Officer, Mitch Morel, to develop Suncoast’s financial projections that were included on Schedules 1 through 8 of the application. Mr. Balsano, in collaboration with Mr. Morel, utilized Suncoast Pinellas’s internal financial modeling system to develop the financial schedules and financial narrative for the application. Mr. Balsano credibly testified that financial Schedules 1 through 8 are accurate and reasonable. Suncoast projects admissions of 460 patients for project year one and 701 patients for project year two. Suncoast’s health planner, David Levitt, developed Suncoast’s projected admissions based on experience of other providers entering a market with two existing providers. Suncoast’s projected number of admissions for years one and two are reasonable projections of admissions for a new hospice program in Hillsborough. Suncoast was criticized as having a lackluster record for admissions in its existing Pinellas hospice. While it is true that Suncoast Pinellas’s admissions declined slightly from 2013 to 2014, the overall trend has been one of increasing admissions. For example, based on Medicare claims data, from 2005 to 2019, Suncoast Pinellas’s admissions grew from 4,679 to 6,534.10 Financial feasibility may be proven by demonstrating the expected revenues and expenses upon service initiation, and determining whether a shortfall or excess revenue results. The projection of revenue is not complicated for hospice services. The vast majority of hospice care, more than 90%, is funded by the Medicare Program which pays uniform rates to all hospice providers. Mr. Balsano testified that Suncoast’s projected revenues in Schedule 7 are based on the revenues that are currently realized for the various payer categories, including Medicare, Medicaid, Commercial, and self-pay. Mr. Balsano credibly testified that the assumptions reflected on Schedule 7 of Suncoast’s CON application are reasonable and appropriate. 10 Suggestions by VITAS and Cornerstone that Suncoast’s internal data indicate a history of low utilization or inaccurate reports to AHCA are without merit. Mr. Sciullo credibly testified that the data reported to AHCA is the most accurate admissions data. Mr. Sciullo further credibly testified that the Utilization Trend Reports contained in Cornerstone’s exhibits 82 through 88, relied on by VITAS and Cornerstone, contain duplicate hospice admissions and admissions from non-hospice programs such as Suncoast’s home health program. Mr. Sciullo also credibly testified that the most accurate admissions numbers reported to AHCA are not generated from the Utilization Trend Reports. Rather, the admissions numbers reported to AHCA are produced by Suncoast’s reimbursement department. Mr. Sciullo’s testimony under cross examination demonstrated a confident and credible understanding of the nuances of the Utilization Trend Reports. Additionally, the suggestion that Suncoast would intentionally under-report admissions to AHCA lacks credibility because hospice providers in Florida are incentivized to report higher numbers of admissions. In Year 2, Suncoast projects net operating revenue of $7,138,000, which breaks down to approximately $172 per day of overall net revenue per patient day. Mr. Balsano’s credibly testified that this is a reasonable forecast of net operating revenue. Projected expenses were also reasonably projected by Suncoast. Mr. Balsano testified that Suncoast’s projected income and expenses in Schedule 8A includes salaries and wages, fringe benefits, medical supplies and ancillary services, and approximately 1.5% of inpatient days. Suncoast also included a separate allowance for administrative and overhead cost. Suncoast also allocated $752,000 in management fees to account for “back office services” and other support services that would be provided to the Hillsborough program through the Empath home office. Mr. Balsano arrived at this number by determining that a reasonable assessment would be the cost per patient day of $18, as reflected on Schedule 8 for year two. Mr. Balsano credibly testified that, for a startup program, it is appropriate to include the costs associated with services provided by the corporate office because one must be cognizant of what services are provided locally, and what services will be provided through the corporate office. Mr. Balsano further testified that it would not be reasonable to assume that 100% of the costs associated with corporate services to a new hospice program would be fixed. As Mr. Balsano explained, the variable costs must be accounted for as well. Mr. Balsano credibly testified that Suncoast’s net profit in year two as reflected in Schedule 8A is $615,416. It is found that Suncoast has reasonably projected the revenues and expenses associated with its proposed hospice, and that Suncoast’s proposal is financially feasible in the long term. Cornerstone projected admissions of 448 patients in year one, and 819 patients in year two, for the highest year two admissions of the three applicants. In comparison, Suncoast projected admissions of 460 patients in year one and 701 in year two, while VITAS projected 491 patients in year one and just 593 in year two. Cornerstone’s projected admissions were developed by health planning experts Roy Brady and Gene Nelson based on the experience of recent new hospice programs in the state of Florida, were discussed and confirmed by Cornerstone personnel prior to being finalized, and are a reasonable projection of admissions for years one and two of operations in Hillsborough. Despite the highest anticipated year two admissions, Cornerstone’s projection still fell below the SA 6A service gap of 863 patients and therefore did not, standing alone, establish any greater adverse impact on area providers than Suncoast or VITAS. Cornerstone emphasized its mission as an organization, and intent for this proposal, to expand penetration by resolving unmet need as opposed to capturing patients already served by existing providers. The adverse impact analysis in Cornerstone’s application therefore represents a worst-case scenario by assuming all of its patients otherwise would be served by existing providers, a premise undercut by the substantial published need. Using this approach, Cornerstone anticipated that LifePath would bear the overwhelming burden of its entry into Hillsborough, with a projected adverse impact on LifePath of 408 patients in year one, and 747 in year two. Cornerstone anticipated adverse impact to Seasons of 39 patients for year one, and 72 patients for year two. Even in this worst-case scenario, existing [Remainder of page intentionally blank] providers’ volumes in Cornerstone project years one and two exceed their historical volumes.11 Cornerstone has available health personnel and management personnel for project accomplishment and operation. Cornerstone’s existing staff, as well as its projected incremental staff for the new program, is reflected in schedule 6A of its application. The projected incremental staff shown in schedule 6A is based on established ratios and methodologies Cornerstone uses in its existing hospice programs. The projected incremental staff is all the incremental staff Cornerstone will need to establish the new program in Hillsborough, and combined with its existing personnel, are sufficient to achieve program implementation as proposed in the application. Both Suncoast and VITAS criticized Cornerstone’s financial projections as flawed because they did not present the fully allocated costs of the project. According to Mr. Balsano, Cornerstone’s projected profit margin is unreasonable and, in fact, is “an extreme outlier.” As he explained, Cornerstone’s financial schedules make no allocation of shared service costs for critical services to be provided by the home office. According to Suncoast and VITAS, this omission is unreasonable when viewed in context with Cornerstone’s Schedule 6, which does not allocate any FTEs to back office support services. Not shown are the expenses Cornerstone will incur for finance, billing, revenue cycle, accounts receivable, payroll, human resources, 11 Relative adverse impact on existing hospice programs of competing applicants has been used as a dispositive factor for favoring one applicant over another. See, Hospice of Naples, Inc. v. Ag. for Health Care Admin., DOAH Case No. 07-1264, ¶ 274 (Fla. DOAH Mar. 3, 2008; Fla. AHCA Jan. 22, 2009) (“One factor outweighs all others, however, in favor of VITAS. VITAS's application will have much less impact on HON and its fundraising efforts and in turn on the high-quality services that HON presently provides in Service Area 8B.”). However, as noted here, neither of the existing providers presented evidence as to the relative impact that any of the applicants would potentially have on its existing operations, or whether such impacts would be material. Accordingly, there is no evidentiary basis for providing an advantage to one or another of the applicants based upon consideration of adverse impact. and contract negotiations, among others. Notably, hospice providers include home office costs as part of their Medicare cost reports filed with CMS.12 Because Cornerstone did not allocate home office costs in its application, its profit margins are substantially higher than all other applicants for the October 2019 Batching Cycle. While most applicants fall within the $100,000 – $500,000 range, Cornerstone projected a staggering $4.9 million profit margin. There is nothing in the CON application form or instructions that require that financial projections be presented on a “fully allocated” basis. Notably, in its review of the financial projections, AHCA determined that each applicant’s proposed program appeared to be financially feasible in the long-term. Cornerstone’s financial feasibility analysis included consideration of payer mix, level of service mix, admissions, average lengths of stay, patient days and incremental staffing needs, among others, and focused on the resulting incremental revenues and expenses generated by addition of the new program in Hillsborough. Cornerstone’s projected admissions are reasonable and appropriate for the proposed new program in Hillsborough. Cornerstone’s proposed incremental staff, combined with its existing staff, is sufficient for project accomplishment and operation. Cornerstone’s projected payer mix is based upon consideration of Cornerstone’s own historic experience, the demographics and recent hospice payer characteristics of Hillsborough, and consideration of Cornerstone’s goal to serve the non-cancer under-65 population, which may reduce Medicare 12 In terms of its budgeting process, Cornerstone has one “bucket” for its administrative overhead/home office expenses and then separate buckets for each of its hospice programs. Home office expenses include human resources, IT, compliance, and facility maintenance. Cornerstone does not allocate its home office expenses to each of its hospice programs within its internal books. However, when an audit is performed, the performances of each hospice program and the home office expenses are all included, and the home office expenses are allocated to each of its hospice programs. levels slightly from what they otherwise may be, and is reasonable and appropriate for its proposed hospice program in Hillsborough. Cornerstone’s projected level of service mix and average length of stay are based upon Cornerstone’s historical experience, and are reasonable and appropriate for the proposed hospice program in Hillsborough. Likewise, Cornerstone’s projected revenues as set forth in schedule 7A are based upon the projected volumes, service level mix, payer mix projections, and Medicare service level specific rates, and are a reasonable projection of revenues for the proposed project in Hillsborough. Cornerstone has established the long-term financial feasibility of its proposed SA 6A program. VITAS’s financial projections were prepared through the work of an internal team led by Lou Tamburro, Vice President of Development for VITAS. VITAS reasonably based these projections on the successful opening and ramp up of new hospice programs in Service Areas 1, 3E, 4A, 6B, 7A, 8B, and 9B, and other Florida communities. VITAS has a clear understanding of what startup costs will be, and it was appropriate for VITAS to rely on its past history of success in developing these projections. VITAS projects admissions of 492 patients for project year one and 593 patients for project year two. Mr. Tamburro developed the projected admissions using an internal model based upon VITAS’s prior experience. While Mr. Tamburro is an expert in health finance, not health planning, Ms. Platt reviewed VITAS’s projections and credibly concluded they are reasonable. VITAS proposes to dedicate more resources to SA 6A than the other two applicants in the second year of operations; 74% of that expense is focused on direct patient care, with only 23% associated with administrative and overhead, and 2% property costs. In contrast, Suncoast and Cornerstone only dedicate 54% and 56%, respectively, of their expenses on direct patient care and 41% and 42%, respectively, on administrative and overhead. However, VITAS’s higher direct patient care costs are at least partially explained by the larger number of clinical and ancillary FTE’s associated with the higher levels of continuous care projected by VITAS than either Suncoast or Cornerstone. As would be expected, VITAS also projects to admit a larger number of high acuity patients than Suncoast or Cornerstone. Given VITAS’s vast experience in the start-up and operation of hospice programs, including 16 within Florida, there is no reason to doubt that the VITAS Hillsborough program would be financially feasible in the long term. The following table summarizes the three applications’ financial metrics: Cornerstone Suncoast Vitas Total Project Costs $286,080 $703,005 $1,134,149 Operating Costs Yr.2 $6 million $5.7 million $8.6 million Net Profit Yr.2 $4,972,346[13] $615,416 $154,913 Proj. Admits Yr. 2 819 701 593 Routine Home Care 95.4% 97.5% 94% General Inpatient 3.5% 1.5% 2.5% Continuous Care 0.3% 0.5% 3.5% Respite 0.8% 0.5% 0% Section 408.035(5) The extent to which the proposed services will enhance access to health care for residents of the service district; and Section 408.035(7) The extent to which the proposal will foster competition that promotes quality and cost-effectiveness. Rule 59C-1.0355 and the criteria for determination of need for a new hospice program found within that rule, is predicated upon the notion that, 13 As noted, Cornerstone’s relatively large profit margin is a function of its incremental cost, versus fully allocated cost, financial projections. when need exists, approval of an additional program will foster competition beneficial to potential and prospective hospice patients in the service area. As between the three applicants, Suncoast did the most thorough and extensive analysis of the current needs of the Hillsborough population. This effort was driven by the fact that Suncoast had recently applied for a new hospice program in neighboring Pasco County, and was denied in favor of a competing applicant. In that case, Administrative Law Judge Newton specifically faulted Suncoast for failing to carefully evaluate the hospice needs of Pasco County residents: Suncoast, in effect, proposes a branch operation for Pasco County. Suncoast did not conduct the focused, individualized inquiry into the needs of Pasco County that Seasons did. Nor did it begin developing targeted ways to serve the needs or begin establishing relationships to further that service. The Hospice of the Fla. Suncoast v. Ag. For Health Care Admin., Case No. 18- 4986, ¶ 126 (Fla. DOAH Sept. 5, 2019; Fla. AHCA Oct. 16, 2019). As explained by Mr. Sciullo at hearing, Suncoast took the above criticism to heart, and determined to conduct an exhaustive evaluation of the hospice needs in SA 6A, and to formulate a strategy for addressing those needs. Specifically, Suncoast’s intent was to identify issues and gaps in services facing residents of Hillsborough, and to enable a dialogue with existing community partners and providers in order to create shared solutions. As part of this comprehensive effort, Suncoast met with more than 50 key individuals and organizations, representing a broad range of general and special populations within the county. This effort resulted in the development of collaborative strategies and action plans to fill the gaps and meet the unmet need for additional hospice services in Hillsborough, as reflected in the Suncoast application conditions. In contrast to Suncoast, Cornerstone did not conduct its own needs assessment, but rather relied on the community needs assessments prepared by the HCDOH and two area hospitals. Moreover, rather than reaching out to the Department of Health and to the area hospitals that prepared those assessments to conduct further research or seek their support of its CON application, Cornerstone simply “verified that their documentation was thorough enough.” Cornerstone’s limited outreach effort in Hillsborough is further demonstrated by the letters of support submitted with its CON application. While Suncoast obtained letters of support from the HCDOH and numerous hospitals and community organizations in Hillsborough, Cornerstone failed to obtain a single letter of support from any hospital in Hillsborough. Despite submitting approximately 150 letters of support (many of which were form letters, and letters from Cornerstone employees), Cornerstone failed to obtain any letters from the Hispanic community, the African American community, the HIV community, the migrant community, or organizations that assist the homeless, unlike Suncoast. As Mr. McLemore testified, “a large part” of the review criteria is “hav[ing] the commitment from the organizations in the service area. I think that’s where – a little bit where Cornerstone was a little off base. They did have a bunch of letters of support, but again, they were not specific to the service area.” Mr. McLemore further testified that, rather than a large pile of letters, he was looking for letters “that are definitely from hospitals, nursing homes and civic organizations, healthcare organizations in the area.” Cornerstone’s failure to conduct meaningful and thorough outreach efforts in Hillsborough is also demonstrated by its generic list of CON application conditions. As multiple Cornerstone witnesses acknowledged, the services Cornerstone is proposing to offer in Hillsborough are identical to the services Cornerstone already offers in its existing service areas. Specifically, Cornerstone conditions its application on Hispanic outreach, bilingual volunteers, multiple office locations within a service area, complementary therapies, veterans-specific programming, bereavement counseling for parents, cooperation with local community organizations, a separate foundation account for the specific service area, and continuing education programming, all of which are services that Cornerstone already offers in its existing service areas. Thus, unlike Suncoast, which used the existing community health needs assessments as a starting point for its own comprehensive needs assessment, and proposed conditions that are reflective of the unique needs of Hillsborough, the conditions proposed by Cornerstone are almost identical to the services Cornerstone currently provides elsewhere. Cornerstone’s plan to serve Hillsborough in phases does not immediately address the unmet need for hospice services countywide. Cornerstone will not send its marketing team to facilities and other referral sources in those phased areas until Cornerstone has completed each phase of its plan. Although Cornerstone’s witnesses testified that Cornerstone will not turn away referrals from parts of the county before Cornerstone begins operations in those areas, they also confirmed that Cornerstone will not actively seek referrals from other phased areas until it is ready to move into those areas. Unlike Suncoast, and to a lesser extent VITAS, there is no evidence that Cornerstone conducted a thorough needs assessment of SA 6A before developing its phased implementation plan. Cornerstone simply looked at a map of where existing providers have offices and decided to start elsewhere. Likewise, Cornerstone did not conduct any independent assessment of the needs of the four different geographic areas of its plan to determine whether Cornerstone will be capable of serving all of the county’s residents immediately upon CON approval. Further, Cornerstone did not conduct any review or analysis of comparable start-ups in Florida when preparing its SA 6A CON application. VITAS undertook an analysis of information from a variety of sources, including meetings with various individuals within Hillsborough regarding the perceived gaps in care. Based on this review, VITAS identified a number of patient groups with purported unmet needs: African American and Hispanic populations; migrant workers; patients residing in the eastern and southern parts of the county who are not accessing hospice at the same rate as other parts of the subdistrict; patients with respiratory, sepsis, cardiac, and Alzheimer’s diagnoses; patients requiring continuous care and high acuity services such as Hi-Flow oxygen; patients requiring admission in the evening or on weekends; and patients residing in small, less than 10-bed, ALFs. VITAS proposed a number of solutions to address the purported needs identified in Hillsborough, and largely included those proposed solutions as conditions of its application. However, VITAS failed to identify a specific operational plan for Hillsborough. The purported gaps in care and solutions identified in VITAS’s application for Hillsborough largely mirror those identified in its application for Service Area 2A that was submitted during the same cycle, despite significant differences between the makeups of those two service areas. VITAS’s application included 47 letters of support. Many of the letters are from persons and organizations outside Hillsborough, and even include a letter from one of VITAS’s employees, Kellie Newman, and two letters in support of its 2A application. At hearing, VITAS offered testimony from letter of support authors Mary Donovan and Margaret Duggar. Ms. Donovan lives in Miami and is VP for Caregiver Services, Inc., a nurse staffing agency that contracts with VITAS in other areas of the state and hopes to do so in Hillsborough. Ms. Duggar is the President of MLD & Associates, Inc., located in Tallahassee, which is a management firm that serves as executive staff for a number of entities. Neither of these letters is probative of VITAS’s ability to meet the hospice needs of Hillsborough residents. Ultimately, the applicants all agreed that the unmet need in SA 6A is not purely numeric: it is concentrated among certain patient populations, including Hispanic and migrant communities; non-cancer patients under age 65, including those with dementia, Alzheimer’s, respiratory, and cardiac disease; and lower income groups. Each applicant tailored their proposal to address the perceived, underlying access barriers accordingly. Two primary theories concerning the source of access barriers in Hillsborough developed at final hearing: (a) that access barriers, and hence, unmet need in the service area stem from a lack of access to relevant hospice services through existing providers once a patient has entered hospice care; and (b) that access barriers, and hence, unmet need in Hillsborough, stem from a lack of outreach and education necessary to bring awareness of hospice services to Hillsborough residents so that they access hospice services in the first place. All three applicants proposed to tailor their hospice services and programming to the particular residents of Hillsborough. But Suncoast’s proposal and conditions focused more heavily on outreach and education to bring geographically and culturally-driven awareness of the hospice benefit to patients appropriate for hospice. As noted, Suncoast also did a more comprehensive needs analysis, which allowed Suncoast to focus its CON conditions on those segments of the Hillsborough population most in need of improved access to hospice services. Among the applicants, Suncoast alone proposes to implement a dedicated pediatric hospice program, which is not currently offered in Hillsborough. Dr. Stacy Orloff, accepted as an expert in pediatric hospice care, confirmed in her testimony the following: Suncoast's pediatric hospice program includes a dedicated integrated care team comprised of a fulltime pediatric nurse with more than 25 years’ hospice experience, a pediatric medical director, a full-time licensed social worker, a team assistant, a volunteer coordinator and a pediatric team leader. Additionally, there are part-time staff members including LPNs and CNAs with dedicated pediatric hospice experience. This is an important distinction, as many hospice programs claim to provide pediatric hospice services, but oftentimes they utilize the same care teams that provide care for adult patients. Suncoast's longstanding expertise and network of community partners for its pediatric program will ensure that the proposed pediatric hospice program fits the specific needs of the pediatric patient and family. Suncoast will use a combination of existing staff and PRN assistance until the pediatric caseload is large enough to warrant addition of new team members in Hillsborough County. Suncoast's existing pediatric hospice team has a strong relationship with St. Joseph's Children's Hospital, which it will utilize to expand its network of pediatric providers to increase hospice awareness and utilization in Hillsborough. Suncoast conditions its application on purchasing a $350,000 mobile van, the “Empath Mobile Access to Care,” to conduct mobile outreach activities in Hillsborough for ethnic-specific programming and outreach to homeless. VITAS also conditioned its application on a “Mobile Hospice Education Unit” van, and included photos of similar vans that it operates in other service areas. The Suncoast van will be staffed by a full-time bilingual LPN and a full-time social worker prepared to discuss advanced care planning and education, and will be equipped with telehealth technology capable of linking with the Empath Care Navigation Office. In contrast, VITAS did not explain how its van will be staffed, or whether any of the staff will be clinicians. Indeed, from the photos included in the application, the van appears to be more of a mobile advertisement for VITAS, than it does a tool for hospice education and outreach. VITAS attempted to differentiate its proposal by pointing to disease- specific programming for patients with pulmonary and cardiac conditions, Alzheimer’s, and sepsis. But, Cornerstone and Suncoast are also capable of caring for patients with those conditions. And, specific to sepsis programming—a feature of VITAS’s presentation at final hearing— septicemia is not usually the primary reason a patient enrolls in hospice. Instead, sepsis is a complication of another terminal condition for which a patient is admitted to hospice, and therefore does not represent a need unto itself. VITAS further attempted to differentiate its program by pointing to its comparatively longer average length of stay, arguing that longer average lengths of stay are indicative of greater access and quality. However, this notion was countered by credible testimony that longer lengths of stay, along with a higher percentage of live discharges and higher 30-day readmission rate, may, alternatively, represent targeting of patients unlikely to experience the types of access barriers at which CON is aimed, and may be indicative of lower quality and higher costs. And VITAS’s healthcare planning expert did not conduct an analysis, and offered no opinion, as to the specific cause of VITAS’s comparatively longer length of stay. Taken together, the evidence was inconclusive as to whether longer lengths of stay reflect access enhancements generally, or as applied to VITAS’s proposal. Section 408.035(9) - The applicants’ past and proposed provision of health care services to Medicaid patients and the medically indigent. Rule 59C-1.0355(2)(f) provides that hospice services must be available “to all terminally ill persons and their families without regard to age, gender, . . . cost of therapy, ability to pay, or life circumstances.” Consistent with rule, hospice providers must provide care to Medicaid patients. Medicaid pays essentially the same for hospice care as does Medicare. As such, there is no financial disincentive to accept Medicaid hospice patients. VITAS and Cornerstone both have a history of providing Medicare, Medicaid, and medically-indigent care; Suncoast’s affiliated entity, Suncoast Pinellas, has a similar history, and all three applicants propose to provide care to Medicare, Medicaid, and the medically indigent. While the three applicants project that they will experience different payor mixes for Medicaid and indigent patients, there is no evidence in this record that any of the applicants have discriminated against such patients in the past, or would do so in their Hillsborough program. Cornerstone argues that it is entitled to preference over Suncoast because Cornerstone’s projected percentage of Medicaid and medically indigent admissions (6%) is almost double that of Suncoast (3.3%). However, Cornerstone’s projection is exactly that: a projection of the payor mix it may experience in its new program. Significantly, Cornerstone did not commit to a 6% Medicaid/indigent payor mix within its CON conditions, and therefore that level of Medicaid/indigent admissions is unenforceable. Rather than the applicants’ projected payor mixes, what is significant are plans to reach out to the Medicaid and charity care population to improve their knowledge about, and use of, hospice services. Suncoast’s application presents a specific plan for doing exactly that. All of the applicants have proposed programs for outreach to financially disadvantaged communities within Hillsborough, and none of the applicants are entitled to preference under this criterion. Rule 59C-1.0355(4)(e) – Preferences for a New Hospice Program.Preference shall be given to an applicant who has a commitment to serve populations with unmet needs. Each applicant expressed a commitment to provide hospice services to populations with unmet needs. And to a greater or lesser extent, each applicant conducted an analysis of the specific populations with unmet needs in Hillsborough. No evidence was presented to establish that care for hospice patients with the varying identified conditions or within the various demographic groups is not available in Hillsborough. Rather, the evidence demonstrates that patients are not accessing hospice services, despite their availability to residents of Hillsborough. Among the three applicants, Suncoast best demonstrated a plan for enhancing access to quality hospice care for these populations, as well as a track record of past experience with enhancing access to quality hospice services for these populations. Preference shall be given to an applicant who proposes to provide the inpatient care component of the Hospice program through contractual arrangements. Each of the applicants propose to provide the inpatient care component of the hospice program through contractual arrangements, and presented testimony regarding their ability to do so. Likewise, all three applicants presented letters from entities in Hillsborough regarding their purported willingness to contract for the inpatient care component of the hospice program. However, no applicant presented non-hearsay evidence from any entity within Hillsborough regarding a willingness to contract for the inpatient care component of the hospice program. The applicants are on equal footing in terms of the ability to contract for inpatient care. Notwithstanding its intention to provide the inpatient component of the hospice program through contractual arrangements, VITAS conditioned its application on applying for a CON to construct an inpatient hospice house within the first two years of operation. However, VITAS presented no evidence to establish the need for an additional inpatient hospice house in SA 6A, and no evidence was presented to demonstrate that an inpatient hospice house is a more cost-effective alternative to contracted beds. The proposals by Cornerstone and Suncoast to contract for the inpatient component of the hospice program represent a better use of existing resources than that of VITAS, which will incur the expense of a freestanding hospice house for its proposed program. On balance, this preference weighs equally in favor of Cornerstone and Suncoast, and against VITAS. Preference shall be given to an applicant who has a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. Each applicant presented evidence of a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS. However, the programs proposed by Suncoast to address the needs of these populations are more precisely targeted than those of the other applicants, and Suncoast is therefore entitled to preference. Proposals for a Hospice service area comprised of three or more counties. SA 6A is comprised of a single county, Hillsborough. This preference is therefore not applicable in this case. Preference shall be given to an applicant who proposes to provide services that are not specifically covered by private insurance, Medicaid, or Medicare. All three applicants propose to provide services in Hillsborough that are not specifically required or paid for by private insurance, Medicaid, or Medicare. The added services beyond those covered by private insurance, Medicaid, or Medicare as proposed by the applicants differ slightly, but on balance, weigh equally in favor of approval of each applicant. Rule 59C-1.0355(5) – Consistency with Plans. Each of the applicants conducted an analysis of the needs of Hillsborough residents and included evidence within their applications and through testimony at final hearing regarding the consistency of their respective plans with the needs of the community. However, Suncoast’s evaluation of the needs specific to Hillsborough was more thorough, and its application is best targeted at meeting the identified needs. Rule 59C-1.0355(6) – Required Program Description. Each applicant provided a detailed program description in its CON application. The elements of the program descriptions are discussed above in the context of the various statutory and rule criteria. Ultimate Findings Regarding Comparative Review Suncoast conducted the most comprehensive evaluation of the end of life care needs of Hillsborough residents, and developed targeted programs and services to address those needs. Those programs and services are identified as CON conditions, and are enforceable by AHCA. The depth and breadth of Suncoast’s commitments to the residents of Hillsborough exceed those of Cornerstone and VITAS. Unlike the other applicants, Suncoast offers needed programs which are not currently available in Hillsborough, including a dedicated pediatric hospice program, and enhanced transportation options for persons living in rural areas of the county. Suncoast and Cornerstone are comparable in terms of history of providing quality care. VITAS is inferior in this regard, as evidenced by the numerous confirmed deficiencies in recent years. Undoubtedly, VITAS has redoubled its efforts to improve quality in response to the numerous confirmed deficiencies and complaints, but based upon the record in this case, Suncoast and Cornerstone have a better history of providing quality care. Suncoast would be able to commence operations in SA 6A more quickly than Cornerstone or VITAS. It has connections with other healthcare providers in Hillsborough and could easily transition to that adjacent geographic area. All three proposals would enhance access to hospice services in the county, but Suncoast’s program would be the most effective at enhancing access. A careful weighing and balancing of the statutory review criteria and rule preferences favors approval of the Suncoast application, and denial of the Cornerstone and VITAS applications. Upon consideration of all the facts in this case, Suncoast’s application, on balance, is the most appropriate for approval.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered approving Suncoast Hospice of Hillsborough, LLC’s, CON No. 10605 and denying Cornerstone Hospice and Palliative Care, Inc.’s, CON No. 10602 and VITAS Healthcare Corporation of Florida’s, CON No. 10606. DONE AND ENTERED this 26th day of March, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: D. Ty Jackson, Esquire GrayRobinson, P.A. 301 South Bronough Street, Suite 600 Post Office Box 11189 Tallahassee, Florida 32302 Seann M. Frazier, Esquire Parker, Hudson, Rainer & Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 Kristen Bond Dobson, Esquire Suite 750 215 South Monroe Street Tallahassee, Florida 32301 Marc Ito, Esquire Parker Hudson Rainer & Dobbs, LLP 215 South Monroe Street, Suite 750 Tallahassee, Florida 32301 S W. DAVID WATKINS Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 2021. Julia Elizabeth Smith, Esquire Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 Stephen A. Ecenia, Esquire Rutledge, Ecenia & Purnell, P.A. Suite 202 119 South Monroe Street Tallahassee, Florida 32301 Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 Tallahassee, Florida 32301 Elina Gonikberg Valentine, Esquire Agency for Health Care Administration Mail Stop 7 2727 Mahan Drive Tallahassee, Florida 32308 Amanda Marci Hessein, Esquire Rutledge Ecenia, P.A. Suite 202 119 South Monroe Street Tallahassee, Florida 32301 Allison Goodson, Esquire GrayRobinson, P.A. Post Office Box 11189 Tallahassee, Florida 32302 Maurice Thomas Boetger, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 James D. Varnado, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Thomas M. Hoeler, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Jonathan L. Rue, Esquire Parker, Hudson, Rainer and Dobbs, LLC Suite 3600 303 Peachtree Street Northeast Atlanta, Georgia 30308 D. Carlton Enfinger, Esquire Agency for Health Care Administration Mail Stop 7 2727 Mahan Drive Tallahassee, Florida 32308 Simone Marstiller, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 Shena L. Grantham, Esquire Agency for Health Care Administration Building 3, Room 3407B 2727 Mahan Drive Tallahassee, Florida 32308
Conclusions DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 Having reviewed the Administrative Complaints and Notices of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Notices of Intent to Deny and Election of Rights forms to Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center. (Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Notice of Intent to Deny is superseded by this Agreement. 3. Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center shall pay the Agency $25,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 4. Conditional licensure status is imposed on Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center beginning on April 12, 2013. ORDERED at Tallahassee, Florida, on this 23 day of [Ma toh , 2014. Dg Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to 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 of 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. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this 3/ day of nr. ‘A ; , 2014. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Thomas J. Walsh II | Anna G. Small, Esq. Office of the General Counsel Allen Dell, P.A. Agency for Health Care Administration 202 South Rome Avenue (Electronic Mail) Tampa, Florida 33606 (U.S. Mail) Linzie F. Bogan Lynne A. Quimby-Pennock Administrative Law Judge Administrative Law Judge Division of Administrative Hearings Division of Administrative Hearings (Electronic Mail) (Electronic Mail) | aA DECOY 7] Certified Article Number 7256 9008 Will see W925 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION aaa Better Health Care for all Floridians SEA ORETARY. EK May 22, 2013 ADMINISTRATOR minty RECERVED LAKESHORE VILLAS HEALTH CARE CENTER C!LIFY INTAKE UnpLICENSE NUMBER: 1282096 16002 LAKESHORE VILLA DR we FILE NUMBER: 62921 TAMPA, FL 33613 MAY & 2043 CASE #: 2013005471 Agency for Health NOTICE 6f INFENTIO.DENY Dear Ms. Johnson: It is the decision of this Agency that Lakeshore Villas Health Care Center’s license renewal application for a nursing home be DENIED. The specific basis for the Agency’s decision is based on the following grounds: e Pursuant to section 400.121(3)(d), F.S., the Agency shall revoke or deny a nursing home license for two class I deficiencies arising from separate surveys within a 30 month period. Lakeshore Villas Health Care Center was cited for Class I deficiencies on October 13, 2011 and November 14, 2012. e = Section 408.815(1), F.S., states that in addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license or change of ownership application include any of the following actions by a controlling interest: (a) a violation of this part, authorizing statutes, or applicable rules; and (d) a demonstrated pattern of deficient performance. EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Agengy for Y Adminjstray J U/c- Berdard E. Hudson, Manager Long Term Care Unit ce: Agency Clerk, Mail Stop 3 EXHIBIT 1 Visit AHCA online at ahca.myflorida.com 2727 Mahan Drive,MS#33 Tallahassee, Florida 32308 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: LAKESHORE VILLAS HEALTH CARE CENTER CASE NUMBER: 2013005471 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed Notice of Intent to Deny of the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Fine, Administrative Complaint, or some other notice of intended action by AHCA. An Election of Rights must be returned by mail or by fax within twenty-one (21) days of the day you receive the attached Notice of Intent to Impose_a Fine, Administrative Complaint or any other proposed action by AHCA. If an Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please reply using this Election of Rights form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) Please return your ELECTION OF RIGHTS to: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Phone: (850) 412-3630 Fax: (850) 921-0158 PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS: OPTION ONE (1) ____ I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other notice of intended action by AHCA and I waive my right to object and have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the proposed penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)_____——‘I_ dispute the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, and I request a formal hearing (pursuant to Section 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within twenty-one (21) days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. Astatement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: Nursing Home License number: 1282096 Applicant Name: SENJOR CARE GROUP INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email (optional) Lhereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RICK SCOTT GOVERNOR July 8, 2013 LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR . TAMPA, FL 33613 Dear Administrator: ELIZABETH DUDEK SECRETARY RECEIVED GENERAL COUNSEL JUL 12 2013 Agency for Health Care Administration The attached license with Certificate #18248 is being issued for the operation of your facility. Please review it thoroughly to ensure that all information is correct and consistent with your records. If errors or omissions are noted, please make corrections on a copy and mail to: Agency for Health Care Administration Long Term Care Section, Mail Stop #33 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Issued for status change to Conditional. Sincerely, Sracey Weathewpoon for Kathy Munn Agency for Health Care Administration Division of Health Quality Assurance Enclosure ce: Medicaid Contract Management 2727 Mahan Drive, MS#33 Tallahassee, Florida 32308 Visit AHCA online at ahca.myflorida.com CERTIFICATE #: 18248 LICENSE #: SNF1282096 State of Florida AGENCY FOR HEALTH CARE ADMINISTRATION DIVISION OF HEALTH QUALITY ASSURANCE NURSING HOME CONDITIONAL This is to confirm that SENIOR CARE GROUP, INC. has:complied with the rules and regulations adopted by the State of Florida, Agency For Health Care Administration, authorized in Chapter 400, Part II, Florida Statutes, and as the licensee is authorized to ; : operate the following: LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR TAMPA, FL 33613 TOTAL: 179 BEDS STATUS CHANGE EFFECTIVE DATE: 06/04/2013 : EXPIRATION DATE: 06/29/2013
The Issue Whether Florida Convalescent Centers, Inc., (FCC) and National Health Corporation, LP (NHC) are "related parties" by either ownership or control for the purposes of Medicaid reimbursement.
Findings Of Fact Respondent Agency for Health Care Administration (AHCA) is the successor agency to the Department of Health and Rehabilitative Services and the agency responsible for administration and implementation of the Medicaid Program. The Florida Title XIX Long-Term Care Reimbursement Plan ("the Plan"), which was adopted and incorporated by reference in Rule 10C-7.0482, Florida Administrative Code, (now Rule 59G-0.010, F.A.C.), is the overall guide for Medicaid reimbursement in the State of Florida. According to the Plan, nursing homes participating in the Medicaid Program are required to submit cost reports to determine reimbursement and ensure that the costs which are reported are allowable under Medicaid. Florida Convalescent Centers, Inc. (FCC), is a Florida corporation which owns 16 nursing homes located throughout the State of Florida. The audits of the cost reports for 1989, 1990 and 1991 for twelve of the facilities are involved in this proceeding. The sole shareholders of FCC are James McCarver and his wife, Pat McCarver. The president of FCC is James McCarver (McCarver). FCC's secretary/treasurer and Senior Vice President is Pat McCarver. Its Vice President and assistant secretary is John Robenalt. FCC's chief financial officer is Charles Wysocki. The directors of the corporation are James and Pat McCarver and John Robenalt. National Health Corp., L.P. (NHC) is a long-term health care company that operates health care centers. NHC was founded in 1971 and became a publicly held corporation in 1983. In 1986, it was converted to a limited partnership and is traded on the American Stock Exchange. None of the corporate officers or directors of FCC have ever been corporate officers, directors, agents or employees of NHC, and none of the corporate officers of NHC have ever been corporate officers, directors, agents or employees of FCC. NHC cannot elect to remove any officers, directors or personnel of FCC. All of the employees at each nursing home are employed by FCC and salaries are paid by FCC from FCC payroll accounts, except for the nursing home administrator. McCarver, either individually or with his wife, has always owned 100 percent of the stock in FCC, and the McCarvers have never owned any stock in NHC. As president/owner of FCC, McCarver runs the company and specifically performs the following functions, among others: review and approval of operating budgets, review and approval of all capital budgets, approval of all expenditures exceeding $5,000, long range planning for the corporation, deciding when and where to file for certificates of need, and determining the corporate philosophy and mission. As a corporation with a sole, owner/manager shareholder, the McCarvers have focused the corporate philosophy toward providing a higher level of patient care than is found in the average nursing home. Such dedication to patient care is reflected in the superior licensure rating which all sixteen of the FCC nursing homes have achieved and maintained and room sizes in the facilities which exceed industry standards. The home office for FCC is located in Sarasota, Florida. Charles Wysocki, the chief financial officer of FCC, operates out of an office located in the NHC offices in Murfreesboro, Tennessee; FCC does not pay rent for use of the office space provided by NHC. FCC was chartered in 1983. The initial and sole owner of FCC was James McCarver. McCarver is educated as an attorney and certified public accountant. He provided the initial capitalization for FCC. He had extensive experience in the formation, building, development and ownership of nursing homes prior to the formation of FCC. Subsequent to its organization, James McCarver transferred a portion of his shares in FCC to his wife, Pat McCarver. The corporation was chartered by McCarver for the purpose of securing certificates of need in the State of Florida, and for the building, developing and owning those nursing homes in the State of Florida. McCarver's prior experience with nursing homes was as a part owner of over 20 nursing homes in the States of Texas and Missouri. Dissatisfied with the limitations which ownership with partners entailed, McCarver began to explore other states in which he could develop nursing homes so that he would be the sole owner. After reviewing the available demographic information and conducting extensive market analyses, McCarver determined that the nursing home market was underserved in Florida and identified several geographic locations in the State of Florida for which nursing homes would be feasible. The demographic and market analysis was conducted by a staff assembled and directly employed by McCarver. He also assembled and directly employed the architectural, construction management and development staff to prepare certificate of need applications for the State of Florida. With the assistance of his staff he filed 66 applications for certificates of need in the State of Florida, which were all initially denied. However, after considerable certificate of need litigation, McCarver was awarded 20 certificates of need (CONs) in 1985. Having been successful in obtaining 20 CONs at one time, McCarver was faced with the large task of building, financing, staffing and operating twenty brand new nursing homes. CONs expire one year from the date when issued, unless construction of the facility is commenced. Thus, McCarver had the immediate task of assembling significant financial, construction, and managerial resources to develop 20 CONs in time to avoid losing them. While McCarver had significant independent financial resources and employed managerial personnel, he did not possess sufficient resources to accomplish the task of building all 20 nursing homes in a one year time period. McCarver sought to find assistance with respect to the financial and managerial resources he needed. As to the actual development/construction and opening of the facilities, McCarver was faced with the prospect of either expanding his current staff and then laying off the new hires afterwards, or finding a national development company which had sufficient development volume of its own to justify retaining a staff of the magnitude required and from whom he could purchase the services for this burst of development activity. McCarver decided to seek the services of a large nursing home company to purchase the necessary services. He and/or his corporate counsel, John Robenalt, contacted and visited several companies, including: Arbor, Beverly, HCR, Hillhaven, Manor Care, Waverly Group, U.S. Care Corporation, Mediplex, NHC, Life Care Corporation, Care Age and Forum. The purpose of contacting so many companies was to obtain the most competitive pricing and terms for the services to be purchased. While he was not necessarily seeking a package of services from any one company, McCarver recognized that financing and management services usually were sold together. All of the companies contacted insisted on an ownership component as part of their offer to do business with McCarver. McCarver rejected these offers because he wanted to maintain complete ownership of the nursing homes. During the search for assistance, McCarver came into contact with NHC in June 1985 through the efforts of John Robenalt. Prior to June 1985, the parties were unknown to each other and did not have any business relations. Intensive negotiations and discussions were held between McCarver and Robenalt on behalf of FCC, and Ted LaRoche on behalf of NHC. The specific concerns of FCC in the negotiations with NHC were as follows: (1) desire to retain ownership of the facilities and certificates of need; (2) desire to assure itself that NHC would not mismanage the facilities, cause a default and then obtain ownership by foreclosure; (3) quality of care and quality of construction of the facilities; (4) control of capital expenditures; and (5) insistence that all employees of the facilities be employees of FCC and not NHC. NHC's concern during the negotiations was to avoid mistakes that it had made as a guarantor on previous transactions with other third parties. NHC wished 1) to provide default and foreclosure remedies, should NHC be required to make payments on its guaranty; 2) to prevent owners from stripping the cash flow and value from the facility by syndication; 3) to ensure that the contractor was bonded; and 4) to make sure the site had the proper zoning. During the time of the negotiations, the parties recognized the related party limitations, as contained in the Medicare and Medicaid regulations, and considered such in structuring their arrangement. The intent of the parties was to insure that FCC retained ownership and control of all monetary and policy-making decisions. The negotiations were at arm's length and competitively priced. As a result of the negotiations, FCC and NHC entered into a master Agreement, dated June 14, 1985, (hereinafter the "Development Agreement"), in which FCC purchased from NHC the following services: development services for 13 nursing homes, including three in California, credit enhancement and guaranty backing for financing the facilities, working capital financing and management services. Subsequent to the initial development and pursuant to the Development Agreement, FCC added and dropped facilities from the Agreement and negotiated amendments. The 16 facilities now owned by FCC were developed pursuant to the terms of the Development Agreement, with some modifications for each individual facility. The development services purchased by FCC from NHC were to assist McCarver's existing staff of two architects, construction supervisor and interior designer in co-developing ten of the facilities for which certificates of need had been awarded. In addition, NHC obtained and provided recommendations of qualified, bonded contractors for FCC to choose from to construct the various facilities. FCC had final say as to which contractor and sites were acceptable; NHC's role was to prevent FCC from making a mistake during the contracting and site selection phase. FCC also negotiated a provision to obtain reimbursement of part of its up-front investment in architectural, interior design and some certificate of need procurement expenses as part of the construction contracts. The sum reimbursed was $400,000 per facility. However, in subsequent projects, these expenditures were not reimbursed to FCC. The financing services purchased from NHC were credit enhancement and guaranty assistance, and are set forth fully in an Agreement to Guarantee attached as Exhibit "B" to the Development Agreement. Credit enhancement is essentially purchasing the financial strength of a well capitalized company by getting that company to guaranty debts. The primary benefit of purchasing credit enhancement is that a start-up company such as FCC on its own would have to pay a substantially higher interest rate to a lender, but could obtain a much lower rate with a credit enhancement. FCC used the financing assistance of NHC to obtain tax-exempt industrial revenue bond financing or loans from private banks to construct the nursing home facilities. While NHC contributed its knowledge and expertise in locating acceptable lenders, much of the financing was located by FCC's officers, and all of the financing is a direct debt of FCC. As a result of NHC's credit enhancements, FCC was able to obtain interest rates of eight percent when the interest rate at that time, without the NHC credit support, would have been 13 1/2 percent. In return for providing such credit enhancements, NHC receives annually a guarantee fee of one percent of the outstanding indebtedness which is guaranteed by NHC. Also, NHC for assuming the initial risk involved in the start-up and development of the nursing home facilities, receives the following deferred, contingent guaranty fees: For facilities financed by non-tax-exempt financing, a right to 25 percent of the net proceeds in the event the facility is sold. No right exists to force the sale of any facility; and, as long as FCC does not sell the facility, no right to such contingent fee accrues; furthermore, no fee accrues upon the transfer of stock which occurs because of testamentary disposition to family members of McCarver. This contingent guaranty fee is speculative since it assumes, first, the facility will be sold and, second, that it will sell for more than the debt. For facilities financed with tax-exempt financing, based on bond counsel advice, NHC is to receive a fee accruing at 3 percent a year on the outstanding principal balance guaranteed by NHC, the payment of which fee is deferred until the year 1997. Payment of contingent guarantee/credit enhancement fees is common and accepted in the nursing home industry as additional compensation for the risk taken by the guarantor in connection with a new venture. FCC is not obligated to purchase credit enhancement assistance from NHC. Nothing contained in the Development Agreement prohibits or prevents FCC from obtaining financing without the NHC credit enhancements, and if such credit enhancements are not used, then the applicable annual fees do not have to be paid. FCC has actively sought to refinance its projects when interest rates were declining. The contingent guarantee fees are not an equity or ownership interest in FCC nor a control interest in FCC. To secure its loan guarantees NHC required that FCC grant subordinated mortgages on its facilities. In the event FCC defaults on debt payments guaranteed by NHC, and NHC is required to make the payments, FCC has a 120-day grace period, after notice, to repay NHC before NHC can declare FCC in default and exercise its foreclosure remedies. NHC also provided working capital loans to finance the start-up operation of the facilities; however such loans are capped at a maximum dollar amount. FCC is not limited to obtaining the working capital loans only from NHC and can seek other lenders. FCC has actively canvassed the market for cheaper working capital financing, if available. After the working capital loan from NHC is exhausted, FCC is required to provide all additional working capital needs for the individual nursing homes. The working capital loans with NHC had an original maturity of five years. Each were renewed for an additional five years. None of the working capital loans are demand loans. The working capital interest rate is 2-1/2 percent over the prime rate. An interest rate for working capital loans at two and one half percent over the prime rate is a competitive rate. The working capital interest rate does not exceed the price of comparable services that could be purchased elsewhere, and is in line with the charge for such services in the open market. The management services purchased from NHC are described in a Management Agreement, attached as Exhibit "C" to the Development Agreement, and include the following, among others: NHC recruits and recommends the administrator for each facility. Final selection of the administrator is made by McCarver. NHC conducts all collections for services provided at the facilities and manages the various banking accounts for the facilities. The bank accounts for each facility are FCC accounts owned by FCC. Checks on such accounts are written by the bookkeeper at each facility, who is an FCC employee, and are signed by the facility's administrator. While such accounts are the source for payment of NHC's management and guarantee fees, pursuant to the Management Agreement, NHC must first submit an invoice to the facility to initiate payment. NHC is prohibited from commingling such funds and handles such funds as a fiduciary. The management fee is six percent of gross revenue. A 6 percent fee is a competitive rate, and does not exceed the price of comparable services that could be purchased elsewhere. It is in line with the charge for such service in the open market. In addition, as further consideration for the services provided by the Development Agreement, NHC requires the following: The personal guaranty of McCarver A right of first refusal upon the sale of any facility to a third party. Covenants, contained in paragraph 5(a), (b) and (c), page 3 of the Agreement to Guarantee, that failure to pay the guaranty fee would result in a default and that such default would entitle NHC to commence foreclosure of subordinated mortgages recorded to secure its guaranty position. Covenant, contained in paragraph 6(a), page 3 of the Agreement to Guarantee, prohibiting the owner from incurring additional debt on the facility or conducting an equity offering, without retaining the monies raised for use in the facility. This provision is included to prevent the owner from stripping all the cash from the facility. Covenant contained in paragraph 14(b), page 12 of the Management Agreement, which would require any purchaser of the facility to assume the Management Agreement in the event of a sale while the debt guaranteed by NHC is still outstanding. Covenant contained in paragraph 4(c), page 8 of the Management Agreement, requiring the owner to maintain a reasonable operating reserve, which at a minimum will be three months operating costs. Extensive monitoring and evaluation of NHC's performance under the Management Agreement is performed by FCC's employees; McCarver on an ongoing basis monitors the patient care performance of NHC at the facilities by site visits and patient and family interviews. Wysocki extensively monitors NHC's financial performance, management of FCC's banking accounts, verifying the accuracy of any charges invoiced by NHC for guarantee, management and any other fees, and all other financial matters. Wysocki is located at NHC's offices in order to have ready access to financial data and to be FCC's watchdog over NHC's contract performance. FCC has delegated only the day-to-day operations of the facilities to NHC under the management agreement. FCC retains the power to direct the actions or policies of the facilities and corporation through the following provisions in the Management Agreement, among others: (1) review and approval of the selection of the administrator; (2) review and approval of all operating and capital expenditure requests above $5,000; (3) review and approval of all annual operating and capital expenditures budgets; (4) decision making on pursuit of certificate of need and other facility expansion decisions; and (5) setting of corporate philosophy and corporate mission. FCC does not lease any facilities from NHC, nor is FCC subject to any non-competition clause with NHC. The contractual agreements with FCC are not a substantial part of the business activity of NHC. The FCC beds managed by NHC totaled 1,578 beds in 15 facilities. In 1991, NHC owned or managed a total of 10,204 nursing home beds in 82 facilities; owned 17 home care programs and three retirement apartment complexes with 235 units, and NHC managed a total of 38 facilities for third parties. NHC's gross revenues were $184,612,000 and its gross revenues from FCC were approximately $4,000,000 plus the guarantee fee of 1 percent on the outstanding principal balance which equals at least $500,000 annually. NHI, a real estate investment trust (REIT) which is affiliated with NHC, in 1991 purchased by assignment the taxable financing on five of the FCC facilities representing about $14,000,000 of debt. NHI has outstanding 183 different loans and over $500,000,000 of assets. Therefore, the outstanding indebtedness of FCC represents approximately 2.5 percent of NHI's assets and loans. Within the nursing home industry there have developed expertise and economies of scale for construction and development services. It is possible for owners to purchase development services to take advantage of such expertise and economies of scale. It is not uncommon for the nursing home owner, to the extent he has incurred fees for architectural services and other up-front development costs, to receive reimbursement of such development fees from the project's financing. There are significant numbers of suppliers of management services in the nursing home industry and pricing is competitive and open among the suppliers. It is a common practice in the nursing home industry for owners to engage management companies to provide day-to-day operating services. Management companies are utilized by owners to access special expertise and economies of scale in management skills and talent, medical staff recruitment and retention, purchasing, quality control, regulatory compliance and reimbursement practices. It is a common contractual term in the industry for management companies to provide the administrator for the facility. It is a common contractual term in the industry for management companies, as part of their services to manage the operating accounts of the facilities. It is a common contractual term in the industry for companies that perform the management of a facility to require a right of first refusal upon the sale of the facility to third parties. It is a common contractual term in the industry for management agreements to require that the owner maintain operating account reserves. The Management Agreement entered into between FCC and NHC is not out of line with the standard in the industry. A typical ancillary service provided as part of the management services is working capital loans. The terms of the working capital loans between FCC and NHC are common provisions required by lenders of working capital funds. The purchase of credit enhancement services is a standard and common practice in the industry. When credit enhancement services are purchased, it is standard business practice for the lender to require the corporate shareholder to guaranty the financing. When credit enhancement services are obtained, it is normal business practice for the lender to secure the funds or credit advanced by default provisions, lien rights and foreclosure remedies, and standard grace periods for default are 5 days. When credit enhancement services are obtained, it is a normal contractual term to limit the ability of the purchaser to conduct additional financing by syndication or otherwise, which could result in the owner "cashing out" from the property, leaving the guarantor with a financially bankrupt asset. The Agreement to Guarantee between FCC and NHC is typical and contains terms and provisions common to comparable business transactions, as required by the open market for such services. The sale of financing and management services as a package is a standard industry offering. The documentation and terms for management and credit enhancement services have become standardized in the nursing home industry. The terms and pricing of the Development Agreement, Agreement to Guarantee, and Management Agreement are not excessive within the industry and do not exceed the price or terms of comparable services that could be purchased elsewhere. They are in line with the terms and charges for such services in the open market, and are not in excess of what is available to other organizations under circumstances comparable to FCC's. NHC is charging FCC the same or less for the services it is providing, pursuant to the Development Agreement and Agreement to Guarantee, as is provided to other comparable organizations it supplies such services. The services being obtained pursuant to the Development Agreement, Agreement to Guarantee and Management Agreement are not a basic element of patient care ordinarily furnished directly to patients by such institutions; delivery of patient care services is made only by FCC employees. All default provisions in the Development Agreement, Agreement to Guarantee, and Management Agreement are triggered by objective criteria by which default is to be determined. These provisions do not give NHC the ability to use the threat of default to coerce FCC into paying greater compensation or otherwise control the business decisions of FCC, or influence or direct the actions or policies of FCC, as would be the case if the loans and guarantees were in the form of demand notes. The Development Agreement and its Exhibits are within the standard in the nursing home industry. The Development Agreement and its Exhibits do not give NHC an ownership interest in FCC. The Development Agreement and its Exhibits do not give NHC control over FCC. Medicaid is a federal social welfare program, created as "Title XIX of the Social Security Act." It is administered by the states, and the method of reimbursement is generally set forth by each state. However, the states to a large extent utilize the regulations promulgated for the Medicare program for determining provider reimbursement issues. Florida has elected to participate in the Medicaid Program and has passed appropriate authorization statutes and regulations to promulgate the state plan required by the federal statutes. One component of the state plan established and implements a Florida Title XIX Long-Term Care Reimbursement Plan. The Plan for nursing houses has been adopted as Rule 59G-6.010, Florida Administrative Code. In the Plan, Florida does not have a separate "related party" rule for its Medicaid program, but relies upon the Medicare rule contained in 42 C.F.R. Section 413.17 and Chapter 10 of the Provider Reimbursement Manual (HIM-15). The applicable Medicare reviewing entities, applying the Medicare related party rules, have not found a related party relationship between FCC and NHC. FCC has submitted annually cost reports to the fiscal intermediary for the federal Medicare program. The fiscal intermediary questioned the nature of the relationship between FCC and NHC as to whether related parties exist. The fiscal intermediary requested all of the underlying documentation and explored the nature of the relationship between the parties, and repeatedly has found that a related party relationship does not exist. AHCA seeks to use generally accepted accounting principles (GAAP) to support its decision that FCC and NHC are related parties. The regulatory objective of 42 C.F.R. Section 413.17 is to assure that the government program pays no more than a provider's reasonable costs for services rendered. It achieves that by collapsing or combining the business operations of related parties to prevent such related parties from collaborating to increase the costs to the Medicare and Medicaid programs by internal transactions in which a related party's charges become the provider's costs for such services, facilities or supplies. HIM-15 recognizes and permits providers to purchase a bundle of services, including but not limited to, working capital loans and management services, without creating a related party transaction. HIM-15 permits providers, in lieu of employing in-house staff, to purchase management services, and authorizes reimbursement for a: full service management contract in which the management contractor provides a complete package of services, has overall day-to-day management responsibility for the operation of the provider, and is accountable only to the governing board (or delegated representative) of the provider. In order for the bundle of services between FCC and NHC to be considered as a control relationship, HIM-15 requires each of the following: (1) the management agreement would replace several of the key employees of FCC, (2) the working capital loans would be evidenced by demand notes, and (3) NHC would own and lease the nursing home facilities to FCC, with NHC having the sole right to cancel the lease. In this case, although NHC does provide, subject to FCC's approval, the nursing facility administrator, the working capital loans provided by NHC are not demand notes that afford control by economic coercion but, rather, are term loans having default provisions based on objective criteria with a 120-day period for cure. Similarly, the facilities are not owned by NHC and leased to FCC with a sole right of termination in NHC. Here, the converse is true, FCC owns the facilities and has the right to terminate NHC's management contracts. 42 C.F.R. Sections 455.100 and 455.101 are regulatory requirements relating to disclosure by providers and do not provide standards as to whether a related party relationship exists for reimbursement purposes. The "evil" which the related party regulations are designed to prevent is not occurring in the business relationship between FCC and NHC. FCC and NHC are not related parties pursuant to the applicable Medicaid statutes and rules.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED as follows: AHCA issue a final order finding that FCC and NHC are not related parties for the purposes of reimbursement under the Medicaid program. AHCA issue a final order rescinding its previous notices to FCC that it reimburse the Medicaid Program as a result of previous overpayments by the Medicaid Program. AHCA issue a final order rescinding the audit report which was issued for the years and facilities at issue, and re-audit those years based on the recommendation herein. DONE and ENTERED this 31st day of August, 1994, in Tallahassee, Florida. DANIEL M. KILBRIDE 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 31st day of August, 1994. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Accepted in substance: paragraphs 1 (in part), 3 (in part), 8, 9, 10 through 57, 59-87, 88 (in part), 89-95. Rejected as subsumed, irrelevant or immaterial or argument: paragraphs 1 (in part), 2, 3 (in part), 4, 5, 6, 7, 58, 88 (in part). Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1, 3, 4 (in part), 5, 6, 7, 8, 9. Rejected as a conclusion of law: paragraph 2. Rejected as subsumed, irrelevant, immaterial or argument: paragraphs 10, 11. Rejected as against the greater weight of evidence: paragraphs 4 (in part). COPIES FURNISHED: Harold D. Lewis, Esquire Agency for Health Care Administration 325 John Knox Road Tallahassee, Florida 32303 Sam Power, Agency Clerk Agency for Health Care Adminsitration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Gerald B. Sternstein, Esquire Frank P. Ranier, Esquire RUDEN, BARNETT, MCCLOSKEY, SMITH, SCHUSTER & RUSSELL, P.A. 215 South Monroe Street, Suite 815 Tallahassee, Florida 32301 Harold M. Knowles, Esquire KNOWLES & RANDOLPH 528 East Park Avenue Tallahassee, Florida 32347
