Conclusions Having reviewed the Amended Administrative Complaint ant the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Amended Administrative Complaint and the Administrative Complaint and Election of Rights forms to the Respondent. (Composite 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 Respondent shall pay the Agency $18,500.00. 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 Filed April 17, 2014 3:13 PM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this_ Z@ day of Cort , 2014. Elizabeth Dudxk, Secretary 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 gps of this Final Order was served on the below-named persons by the method designated on this ik. day of / , 2014. a ay X\ OOP, 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) Alba M. Rodriguez, Senior Attorney Peter A. Lewis, Esq. Office of the General Counsel Law offices of Agency for Health Care Administration Peter A. Lewis, P.L. (Electronic Mail) 3023 North Shannon Lakes Drive - Suite 202 Tallahassee, Florida 32309 (U.S. Mail) Cathy M. Sellers Administrative Law Judge [Division of Administrative Hearings (Electronic Mail) STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2012011203 ; v. ISLF WESTCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. AMENDED ADMINISTRATIVE COMPLAINT" COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”), by and through the undersigned counsel, and files this Amended Administrative Complaint against ISLF Westchester of Sunrise, LLC d/b/a Westchester of Sunrise (hereinafter “Westchester of Sunrise”), pursuant to Chapter 429, Part I, Chapter 408, Part Il, and Section 120.60, Florida Statutes (2011), and alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine of $5,000.00 pursuant to Sections 429.14 and 429.19, Florida Statutes (2011), for the protection of public health, safety and welfare, and to impose a survey fee in the amount of $500.00 pursuant to Section 429.19(2)(c) and 429.19(7), Florida Statutes (2011). L The Amended Administrative Complaint is being issued to reflect the revised sanctions imposed by the Agency. Coellae TE EXHIBIT 1 JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2011), and Chapter 28-106, Florida Administrative Code (2011). 3. Venue lies pursuant to Rule 28-106.207, Florida Administrative Code (2011). PARTIES 4. AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Chapter 408, Part II, Florida Statutes (2011), and Chapter 58A-5 Florida Administrative Code (2011). 5. Westchester of Sunrise operates a 150-bed assisted living facility located at 9701 W. Oakland Park Blvd., Sunrise, Florida 33351. Westchester of Sunrise is licensed as an assisted living facility under license number 7440. Westchester of Sunrise was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes, COUNT I WESTCHESTER OF SUNRISE FAILED TO ENSURE RESIDENTS LIVE IN A SAFE ENVIRONMENT SECTION 429.28, FLORIDA STATUTES RULE 58A-5.0182(6), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE — FACILITY PROCEDURES STANDARDS) CLASS If VIOLATION 6. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 7. Westchester of Sunrise was cited with one (1) Class II deficiency as the result of a revisit survey conducted on Aril 2, 2012. 8. Based on observation, record review, and interview, it was determined that the facility failed to ensure residents live in a safe and decent living environment and with due recognition of personal dignity, for 1 resident. (Resident #1) The findings include the following. 9. During an interview on 4/2/12 at 10:30 AM with Resident #1, the resident's room was observed in disarray. Empty food containers were on the resident's side table beside her nebulizer, food was in the draws of the wall unit, and in a box on the table. The resident's clothes were hanging on rods in broken boxes in the corner of the room. Four unidentified pills in a plastic bag were noted on the bedside table, and an empty insulin bottle and 4 empty pill bottles on the counter in the bathroom. The floor in the room was also soiled. 10. The resident stated she felt like nobody likes her, staff is mean, and nobody ever comes to check on her. The resident also stated she is missing medication, the aides don't shower her, and she feels like "the staff are mad at me". Then the resident began crying. 11. At 10:35 AM on 4/2/12, the call light was tested and pressed by the surveyor with the facility manager present. Fifteen minutes later, at 10:45 AM, the call light was answered. The call light was answered by a med tech, who stated nobody was in the medication room when the light went off so they did not see it. 12. During an interview on 4/2/12 at 11:40 AM with the 2 facility med techs, they stated resident #1 does not have any home health services and self-administers their medications. The med techs also stated they did not store any of the resident's medications and they should all be kept in her room. At that time observation was made of the call light system which is located inside the first floor medication room/nurse station. If no staff is present in this room, there is no way to know if a resident activates the call system. 13. A review of resident #1's record revealed an admission date of 1/31/11 and a diagnosis to include diabetes, renal insufficiency, and asthma. The AHCA form 1823 dated 1/26/11 documents the residents need for assistance with medications. The AHCA form 1823 dated 2/17/12 documents the resident's need for assistance with bathing and need for help taking their medications. The form did not document if the resident needs assistance with self- administration or medication administration. 14. The resident's medication observation record (MOR) for February through April 2012 was reviewed and included the following medications: Lantus 100 units/ml vial inject sub- Q 25 units 3 times a day, "Home Health Care". Iprat-Albut .5-3(2.5) mg use 1 vial via nebulizer twice daily. Wellbutrin XL 150 mg 1 tablet daily. Glipizide 10 mg 1 tablet daily. Singulair 10mg 1 tablet daily. Bupropion hel 150mg 1 tablet twice daily. 15. | The MOR's were blank. The facility did not document resident #1 had refused or received their medications as ordered by the physician for 14 months. A plan of care for skilled services to administer the resident's insulin was requested as well as the home health record. The facility manager stated the resident does not receive home health services and the facility has not been monitoring the resident's diabetes. 16. Further review of the record did not contain physician's orders for the resident to self-administer any medications, or documentation the resident was being assisted with bathing. There was no evidence the facility notified the physician with any concerns. 17. During an interview on 4/2/12 at 2:40 PM with the facility manger and Resident #1 in their room, the resident stated she gives herself the insulin 2 or 3 times a day depending on what she eats and does not check her glucose levels. At that time observation was made of 2 bottles of Lantus insulin in a plastic bag in the resident's refrigerator. The resident also stated she was missing medications, and needed to get to the bank because she did not have the money for the copayments. She reported the facility does not get her medications and was not in possession of any of the above listed medications. 18. During an interview on 4/2/12 at 4:00 PM with the facility manager and nurse consultant to review resident #1's record, it was confirmed the facility does not have a physicians order for resident #1 to self administer their medications. It was also confirmed the facility does not supply or store any of resident #1's medications. The facility could not provide documentation resident #1 had received any of their physician ordered medications from 2/1/11 through 4/2/12 or home health services as ordered by the physician for diabetic management. This is an uncorrected tag from survey on 12/21/11. 19. Based on the foregoing facts, Westchester of Sunrise violated Section 429.28 Florida Statutes, and Rule 58A-5.0182(6), Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $5,000.00. SURVEY FEE Pursuant to Section 429,19(7), Florida Statues (2011), AHCA may assess a survey fee in the amount of $500.00 to cover the cost of conducting initial complaint investigations that result in the finding of a violation that was the subject of the complaint or monitoring visits. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Westchester of Sunrise. 2. Assess an administrative fine of $5,000.00 against Westchester of Sunrise on for the violation cited above. 3. Assess a survey fee of $500.00 against Westchester of Sunrise for the violation cited above. 4. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 5. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2011). Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Ti allahassee, Florida 32308. Alba M. ee Bs i Fla. Bar No.: 0880175 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 53” Street Suite 300 Miami, Florida 33166 305-718-5906 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. — Suite 500 Delray Beach, Florida 33484 (U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished via electronic mail palewis@petelewislaw.com, Peter A. Lewis, Esq., Attorney for Respondent, 3023 N. Shannon Lakes Drive, Suite 101, Tallahassee, Florida 32309 on this 13" day of February, 2014. Alba M. 2 Rediaatae STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: ISLF Westchester of Sunrise, LLC d/b/a AHCA No.: 2012011203 Westchester of Sunrise 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 Chapter 120, 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) ___—=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), Floriaa 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, AHCA No.: 2012001196 Return Receipt Requested: v. 7009 0080 0000 0586 7599 ISLF-WESTHCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. ADMINISTRATIVE COMPLAINT COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”), by and through the undersigned counsel, and files this administrative complaint against ISLF-Westchester of Sunrise LLC d/b/a Westchester of Sunrise (hereinafter “Westchester of Sunrise”), pursuant to Chapter 429, Part I, and Section 120.60, Florida Statutes (2011), and alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine of $13,000.00 pursuant to. Sections 429.14 and 429.19, Florida Statutes (2011), for the protection of public health, safety and welfare JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2011), and Chapter 28-106, Florida Administrative Code (2011). 3. Venue lies pursuant to Rule 28-106.207, Florida Administrative Code (2011). PARTIES 4, AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Florida Statutes (2011), and Chapter 58A-5 Florida Administrative Code (2011). 5. Westchester of Sunrise operates a 150-bed assisted living facility located at 9701 W. Oakland Park Blvd., Sunrise, Florida 33351. Westchester of Sunrise is licensed as an assisted living facility under license number 7440. Westchester of Sunrise was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes. COUNT I WESTCHESTER OF SUNRISE FAILED TO PROVIDE PERSONAL SUPERVISION 1 DAILY OBSERVATION, AND GENERAL AWARENESS OF RESIDENT’ S WHEREABOUTS AND SAFETY WHICH RESULTED IN DEATH. RULE 58A~5.0182(1), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE SUPERVISION STANDARDS) CLASS I VIOLATION 6. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 7. Westchester of Sunrise was cited with two (2) Class I deficiencies and one (1) Class IT deficiency as the result of a complaint investigation survey that was conducted on December 21, 2011. 8. A complaint investigation survey was conducted on December 21, 2011. Based on record review and interview, it was determined that the facility failed to provide personal supervision, daily observation, and general awareness of a resident's whereabouts and safety, which resulted in death for one out of four sampled residents (resident #3). The findings include the following. 9. A review of the adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered on 11/11/11 unresponsive on the floor in a’ vacant room on the floor where he resided. During an interview on 12/21/11 at 2:45 PM with the Director of Nurses (DON) and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. 10. The risk manager also reviewed documentation from staff reporting resident #3 did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident's family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation, the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. The resident was discovered on 11/11/11 at approximately 12:20 PM in a vacant room across the hall from their room. 11. In interview on 12/21/11 at 3:45 PM the DON, risk manager, and administrator confirmed the facility does not have policies regarding resident supervision or resident safety related to vacant rooms. 12. A review on 1/13/11 of the police investigation dated 11/11/11 revealed a sworn statement taken from facility staff documenting staff was aware the resident liked to walk and was prone to falling. It was also documented that "No employees attempted CPR or to free him from his walker, nor. did any persons to her knowledge check for breathing or a pulse until the Sunrise FD arrived and performed their assessment." "It appears as if the decedent was confused...this was not the first time that the decedent wandered into another room thinking that is was his. No signs of forced entry, however, it appeared as if the decedent was possibly struggling to keep his balance thus knocking over some furniture." 13. A review of the medical examiner's report dated 11/12/11 identified the injury description as the decedent’s neck became caught in the walker and the cause of death as Asphyxia due to Cervical Compression. 14. Based on the foregoing facts, Westchester of Sunrise violated Rule 58A-5.0182(1), Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $6,000.00. COUNT II WESTCHESTER OF SUNRISE FAILED TO ENSURE RESIDENTS LIVED IN A SAFE ENVIRONMENT. SECTION 429.28, FLORIDA STATUTES RULE 58A-5.0182(6), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE RIGHTS & FACILITY PROCEDURES STANDARDS) CLASS I VIOLATION 15. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 16. A complaint investigation survey was conducted on December 21, 2011. Based on observation, record review, and interview, it was determined that the facility failed to ensure residents live in a safe environment, free from neglect which resulted in a death of a resident, for 1 of 4 sampled residents (Resident #3). The findings include the following. 17. Resident #3 was admitted to the facility on 9/24/11 with a diagnosis to include depression, anxiety, and he osteoporosis. A review of the AHCA form 1823 dated 9/15/1 documented the resident ambulates independently with a walker. A review of the facility resident summary sheet dated 9/24/11 documents the resident's need for partial assistance with a walker while ambulating. 18. Continued review revealed a physician order dated 11/9/11 for Tylenol 650 mg daily three times a day and a rib series "dx: S/P Fall" (diagnosis: status/post fall). Further review of the resident's record revealed no documentation regarding a fall. 19. A review of the medication observation record (MOR) documented resident #3 began taking Tylenol 325 mg 2 tabs three times a day on 11/10/11. During an interview on 12/21/11 at 11:30 AM with the risk manager, Director of Nurses (DON) and administrator, the facility was unable to determine when the resident had a fall. 20. During an interview on 12/21/11 at 12:00 PM with the physician and the physician assistant, who wrote the order on 11/9/11, she stated the resident was complaining of rib pain "he said he had fallen but did not say when". The physician stated she reviewed an old X-ray from a left rib fracture but since the resident was complaining of right rib pain and has a history of falls she ordered the rib series. 21. A review of the facility's adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered unresponsive on the floor in a vacant room. During an interview on 12/21/11 at 2:45 PM with the DON and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. The DON stated the door to vacant rooms should always be locked. During the interview, the maintenance director confirmed the facility had not done any work in the room between 10/3/11 & 11/11/11. The facility did not have a policy related to resident supervision or securing/monitoring vacant rooms. 22. The risk manager also reviewed documentation from staff reporting the resident did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident’s family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. The resident was discovered on 11/11/11 at approximately 12:20 PM in a vacant room across the hall from their room. 23. During the interview at 3:45 PM on 12/21/11, the risk manager confirmed the room was vacant and stated the headboard of the bed was not attached to the wall, the bed was falling off the frame, and the resident was found unresponsive on the floor beside the bed with their head entrapped between the bars of the walker. A telephone interview on 12/21/11 with the medical examiner, revealed the cause of death as Asphyxia due to Cervical Compression. 24. Based on the foregoing facts, Westchester of Sunrise violated Section 429.28, Florida Statutes, and Rule 58A- 5.0182(6), Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $6,000.00. COUNT III WESTCHESTER OF SUNRISE FAILED TO IMPLEMENT THEIR ELOPEMENT RESPONSE POLICIES AND PROCEDURES. RULE 58A-5.0182(8), FLORIDA ADMINISTRATIVE CODE (ELOPEMENT PROCEDURE STANDARDS) CLASS II VIOLATION 25. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 26. A complaint investigation survey was conducted on December 21, 2011. Based on record review and interview, it was determined the facility failed to implement their elopement response policy and procedure for 1 of 4 sampled residents (resident #3). The findings include the following. 27. A review of the adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered on 11/11/11 unresponsive on the floor in a vacant room on the floor where he resided at approximately 12:20 PM. During an interview on 12/21/11 at 2:45 PM with the Director of Nurses (DON) and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. 28. Based on record review with the risk manager, the facility had documentation from staff reporting resident #3 did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident’s family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. 29. Based on the foregoing facts, Westchester of Sunrise violated Rule 58A-5.0182(8), Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $1,000.00. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Westchester of Sunrise on Counts I, II, and III. 2. Assess an administrative fine of $13,000.00 against Westchester of Sunrise on Counts I, II, and TII for the violations cited above. 3. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 4. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2011). Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Tallahassee, Florida 32308. 10 RESPONDENT IS FURTHER NOTIFIED THAT THE FAILURE TO RECEIVE A REQUEST FOR A HEARING WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS COMPLAINT WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. If YOU WANT TO HIRE AN ATTORNEY, YOU HAVE THE RIGHT TO BE REPRESENTED BY AN ATTORNEY IN THIS MATTER Cewas mr. Races Alba M. Rodriguez} Esqa Fla. Bar No.: 0880175 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 53%° Street Suite 300 Miami, Florida 33166 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. ~ Suite 500 Delray Beach, Florida 33484 (U.S. Mail) 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Certified Mail, Return Receipt Requested to Gary Stephen Solomons, Administrator, Westchester of Sunrise, 9701 W. Oakland Park Blvd., Sunrise, Florida 33351 on this i2** aay of Opts , 2013. Alba M. ee ye" Zz ms 12 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: ISLF-Westchester of Sunrise, LLC d/b/a AHCA No.: 2012001196 Westchester of Sunrise 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 Chapter 120, 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 mny 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)___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) [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: Dates Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, AHCA No. 2012001196 Petitioner, DOAH No. 13-2452 vs. AHCA No. 2012011203 DOAH No. 13-3182 ISLF WESTCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. SETTLEMENT AGREEMENT Petitioner, State of Florida, Agency for Health Care Administration (hereinafter the “Agency”, through its undersigned representatives, and Respondent, ISLF Westchester of Sunrise, LLC d/b/a Westchester of Sunrise (hereinafter “Respondent”), 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, Respondent is an Assisted Living Facility, licensed pursuant to Chapters 408, Part I], and 429, Part I, Florida Statutes, and Chapter 38A-5, Florida Administrative Code: and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Respondent, pursuant to Chapter 429, Part I, Florida Statutes; and WHEREAS, the Agency served Respondent with an administrative complaint on or about May 21. 2013, (on case #2012001 196), notifying the Respondent of its intent to impose adniinistrative fines in the amount of $13,000.00; and an amended administrative complaint on EXHIBIT 2 or about February 14, 2014, notifying the Respondent of its intent to impose administrative fines in the amount of 5,000.00, and a survey fee in. the amount of $500.00; and WHEREAS, Respondent requested a formal administrative proceeding by selecting Option 3 on the Election of Rights form: 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 NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: L. All recitals herein are 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, Respondent agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited to, 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 it may be entitled, provided, however, that no agreement herein shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 4. Upon full execution of this Agreement, Respondent agrees to pay $18,000.00 in administrative fines, and a survey fee in the amount of $500.00 to the Agency within thirty (30) days of the entry of the Final Order. 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. ba 6. By executing this Agreement, Respondent neither admits nor denies, and the Agency asserts the validity of the allegations raised in the administrative complaint referenced herein. 7. No agreement made herein shall preclude the Agency from using the deficiencies from the surveys identified in the administrative complaint in any decision regarding licensure of Respondent, including, but not limited to, licensure for limited mental health, limited nursing services, extended congregate care, or a demonstrated pattern of deficient performance. The Agency is not precluded from using the subject events for any purpose. within the jurisdiction of the Agency. In such event, however, the Facility or its assigns or successors will be provided hearing rights pursuant to Chapter 120 to challenge the allegations made in this case. Further, Respondent acknowledges and agrees that this Agreement shall not preclude or estop any other federal. state, or local agency or office from 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 complaint. This agreement does not prohibit the Agency from taking action regarding Respondent's Medicaid provider status, conditions, requirements or contract. 8. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled case. 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. Respondent for itself and for its related or resulting organizations, its 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 attomeys 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 forum, including any claims arising out of this agreement. by or on behalf of Respondent 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 Respondent was a Medicaid provider at the subject time of the occurrences alleged in the complaint herein, this settlement does not prevent the Agency from seeking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule $9G-9.070, Florida Administrative Code. 14. Respondent 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 Respondent in the Final Order, or any portion thereof, owed by Respondent to the Agency ftom any present or future funds owed to Respondent by the Agency, and that the Agency shall hold a lien against present and future funds owed to Respondent by the Agency for said amounts until paid. 1S. 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. Molly McKinytry Sheryl Adminisyrator Deputy Segrefary: Westchester of Sunrise Agency for Health Care Administration 9701 W. Oakland-Park Boulevard 2727 Mahan Drive, Bldg #1 Sunrise, Florida 33351 Tallahassee, Florida 32308 DATED: _&@ = 24-/f Stuart Williams, General Counsel Alba M. ante é q 4e Florida Bar No. 670731 Assistant General Counsel Agency for Health Care Administration 8333 NW 53” Street, Suite 300 2727 Mahan Drive, Mail Stop #3 Miami, Florida 33166 Tallahassee. Florida 32308 DATED: 3/3 6 / Ly DATED: —_ Péter A. Lewis, Esquire 2012 North Shanon Lakes Drive Suite 101 Tallahassee, Florida 323090 DATED: 3° 73-42! te
Conclusions THIS CAUSE comes before the Agency For Health Care Administration (the "Agency") concerning Certificate of Need ("CON") Application No. 10131 filed by The Shores Behavioral Hospital, LLC (hereinafter “The Shores”) to establish a 60-bed adult psychiatric hospital and CON Application No. 10132 The entity is a limited liability company according to the Division of Corporations. Filed March 14, 2012 2:40 PM Division of Administrative Hearings to establish a 12-bed substance abuse program in addition to the 60 adult psychiatric beds pursuant to CON application No. 10131. The Agency preliminarily approved CON Application No. 10131 and preliminarily denied CON Application No. 10132. South Broward Hospital District d/b/a Memorial Regional Hospital (hereinafter “Memorial”) thereafter filed a Petition for Formal Administrative Hearing challenging the Agency’s preliminary approval of CON 10131, which the Agency Clerk forwarded to the Division of Administrative Hearings (“DOAH”). The Shores thereafter filed a Petition for Formal Administrative Hearing to challenge the Agency’s preliminary denial of CON 10132, which the Agency Clerk forwarded to the Division of Administrative Hearings (‘DOAH”). Upon receipt at DOAH, Memorial, CON 10131, was assigned DOAH Case No. 12-0424CON and The Shores, CON 10132, was assigned DOAH Case No. 12-0427CON. On February 16, 2012, the Administrative Law Judge issued an Order of Consolidation consolidating both cases. On February 24, 2012, the Administrative Law Judge issued an Order Closing File and Relinquishing Jurisdiction based on _ the _ parties’ representation they had reached a settlement. . The parties have entered into the attached Settlement Agreement (Exhibit 1). It is therefore ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Agency will approve and issue CON 10131 and CON 10132 with the conditions: a. Approval of CON Application 10131 to establish a Class III specialty hospital with 60 adult psychiatric beds is concurrent with approval of the co-batched CON Application 10132 to establish a 12-bed adult substance abuse program in addition to the 60 adult psychiatric beds in one single hospital facility. b. Concurrent to the licensure and certification of 60 adult inpatient psychiatric beds, 12 adult substance abuse beds and 30 adolescent residential treatment (DCF) beds at The Shores, all 72 hospital beds and 30 adolescent residential beds at Atlantic Shores Hospital will be delicensed. c. The Shores will become a designated Baker Act receiving facility upon licensure and certification. d. The location of the hospital approved pursuant to CONs 10131 and 10132 will not be south of Los Olas Boulevard and The Shores agrees that it will not seek any modification of the CONs to locate the hospital farther south than Davie Boulevard (County Road 736). 3. Each party shall be responsible its own costs and fees. 4. The above-styled cases are hereby closed. DONE and ORDERED this 2. day of Meaich~ , 2012, in Tallahassee, Florida. ELIZABETH DEK, Secretary AGENCY FOR HEALTH CARE ADMINISTRATION
The Issue Whether Petitioner, Presbyterian Retirement Communities, Inc., d/b/a Westminster Towers: (1) should be given a "conditional" or "standard" license effective June 17, 2002; and whether Petitioner is subject to an administrative fine of $2,500.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following findings of fact are made: Petitioner is a long-term, skilled nursing facility located in Orlando, Florida. Respondent is a State of Florida agency responsible for surveying nursing homes to ensure compliance with applicable state and federal requirements. An annual survey was conducted by Respondent on Petitioner during June 17 through 20, 2002. As a result of the survey, Respondent asserted that Petitioner failed to adequately notify the attending physician of Resident No. 13's urinary tract infection, resulting in a delay in treatment of the infection. This resulted in citing Petitioner for a Class II deficiency, Tag F309, as follows: "Respondent failed to ensure that each resident received the necessary care and services to attain or maintain the highest practicable physical, mental, and psychological well-being, in accordance with the comprehensive assessment and plan of care." A federal scope and severity rating of level "G" was assigned to this deficiency. "Scope and severity" levels are identified by letters A through L. A level "G" rating requires that "harm or pain has come to the resident," more specifically, the resident must "have more than minimal harm with discomfort." If a level "G" scope and severity is assigned, a Class II deficiency is cited. Resident No. 13 was a 108-year-old female with a history of urinary tract infections. She was alert, oriented and articulate. She was capable of advising caregivers of her wants, needs, and physical condition. On May 27, 2002 Resident No. 13 complained of "some burning upon urinating." Petitioner's staff called Resident No. 13's attending physician by calling the "on-call" physician. The "on call" physician ordered a urinalysis and culture; a urine sample was obtained by Petitioner's staff noting that the urine was "cloudy." The laboratory that performs the testing is at a remote location. On May 28, 2002, the urinalysis results were received by Petitioner and transmitted by facsimile to the attending physician's office on the same day. The culture results were received by Petitioner on May 30, 2002, a Thursday, but were not faxed to the attending physician's office until June 1, 2002, a Saturday. On May 29, 2002, the attending physician performed a routine assessment and evaluation of Resident No. 13. His notes of the examination read as follows: No complaints. Feels well. Appetite is adequate. Otherwise, non-ROS. An extremely elderly lady doing quite well. Will continue to monitor and keep close tabs on her. On June 5, 2002, the nurses notes reflect that Resident No. 13 stated, "it hurts when I urinate." Her urine was discolored and was odiferous. Petitioner's staff notified the attending physician's office. The attending physician ordered the antibiotic, oxacillin, on June 6th. This antibiotic was inappropriate for Resident No. 13. On June 7, 2002, the attending physician ordered a second antibiotic, dioxicillin; this was also inappropriate, as there is no such antibiotic. Again, the physician was notified, and on June 8, 2002, he ordered an antibiotic, dicloxicillin, which was administered to Resident No. 13 during the early morning hours of the following day, June 9, 2002. Notwithstanding the administration of dicloxicillin, a broad spectrum antibiotic, the urinalysis and culture reports of the specimen taken on May 28, 2002, indicated colonized, saprophytic organisms and did not indicate pathologic organisms. The administration of an antibiotic is an optional treatment. The symptoms exhibited by Resident No. 13, burning sensation on urination, odiferous urine and a change in urine color can be caused by conditions other than urinary tract infections. Burning sensations can be caused by atrophic vaginitis and other non-pathogenic causes. Typical symptoms of a geriatric patient suspected of having a urinary tract infection are: fever, abdominal and flank pain, change in mental status, and fatigue. There is no indication in the records of Resident No. 13, during the relevant period, of the presence of these symptoms; the examination of the attending physician on May 28, 2002, does not indicate any symptoms typical of a urinary tract infection; in fact, he reports that Resident No. 13 is "doing quite well." Individuals familiar with Resident No. 13 observed no changes in her physical or mental status during the period from May 27 through June 8, 2002.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended that Respondent enter a final order determining that the deficiency described under Tag F309 in the June 17 through 20, 2002, survey did not occur, issue a Standard licensure rating to Petitioner, and that the Administrative Complaint seeking a fine be dismissed. DONE AND ENTERED this 15th day of July, 2003, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 15th day of July, 2003. COPIES FURNISHED: Joanna Daniels, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Alex Finch, Esquire Goldsmith, Grout & Lewis, P.A. 2180 North Park Avenue, Suite 100 Post Office Box 2011 Winter Park, Florida 32790-2011 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building III, Suite 3431 Tallahassee, Florida 32308
The Issue The issue in these consolidated cases is whether proposed amendments to Rule 10-5.011(1)(o), and (p) F.A.C. relating to certificates of need for hospital inpatient general psychiatric services, are invalid exercises of delegated legislative authority, as defined in Section 120.52(8), F.S.
Findings Of Fact Metamorphosis of the Rules Prior to 1983, hospitals were not separately licensed, and certificates of need (CON) were not required for the designation of beds for psychiatric and substance abuse services. In 1983, statutory amendments to Chapter 381, F.S. addressed psychiatric beds as reviewable projects in the CON program. In 1983, HRS adopted rules establishing four new categories of beds, now found in Rules 10-5.011(1)(o), (p), and (q), F.A.C.: Short-term psychiatric, long-term psychiatric, and short and long-term substance abuse. At the time that the categories were created, HRS conducted an inventory of the hospitals, asking how many beds were designated in each category. Based on the responses, published in the Florida Administrative Weekly, future projections of need were made and applications were considered for CONs. Another category of psychiatric beds was not included in the 1983 rules. Intensive residential treatment programs for children and adolescents were created by statute in 1982, and are defined in Section 395.002(8), F.S. as: a specialty hospital accredited by the Joint Commission on Accreditation of Hospitals which provides 24-hour care and which has the primary functions of diagnosis and treatment of patients under the age of IS having psychiatric disorders in order to restore such patients to an optimal level of functioning. These facilities, called IRTFs, may become licensed as hospitals pursuant to Section 395.003(2)(f), F.S., but as hospitals they must obtain CON approval pursuant to Sections 381.702(7) and (12), F.S. and Section 381.706(1) (b), F.S. IRTFs have no statutory or regulatory restrictions on length of stay and were approved by HRS at one time under an unwritten policy that there be one such facility available in each HRS planning district, without regard to the availability of other long or short term psychiatric programs. In 1985, HRS proposed a rule amendment which would have eliminated the short and long term distinction, as well as the distinction between psychiatric services and substance abuse services. Six months later, the proposed rule amendment was withdrawn. It was highly controversial; several challenges were filed; objections were made by various local health councils; and a new administrator took over. The agency decided to rework its proposed change~;. The agency next began the process of revision in 1987, and in 1988 convened a workshop group to review an issue paper prepared by agency staff. Another work group met in 1989 to consider the consolidation of psychiatric and substance abuse rules. HRS staff reviewed literature on the subjects of substance abuse and psychiatric services, including literature relating to access by indigent patients and the provision of services to children and adolescents. Staff prepared rule drafts which were circulated in- house, including the alcohol, drug abuse and mental health program office; and to such outside groups as the Association of Voluntary Hospitals of Florida, the Florida Hospital Association and the League of Hospitals. The proposed rule amendments which are the subject of this proceeding were filed on January 19, 1990 (substance abuse), and on January 26, 1990 (inpatient psychiatric services) in the Florida Administrative Weekly. The Parties HRS administers the CON program pursuant to Section 381.701, et seq., F.S. (1989). The CON program regulates entry into the Florida health care market by providers through review and approval of certain capital expenditures, services and beds. The petitioner, Florida League of Hospitals, Inc. is a nonprofit corporation which is organized and maintained for the benefit of investor-owned hospitals which comprise its membership. The remaining petitioners and intervenors are current providers of hospital inpatient psychiatric services, long and short term, and of inpatient substance abuse services, long and short term. The petitioners and intervenors are all substantially affected by the proposed rules and have stipulated to the standing of all parties in this proceeding. Abolishing Distinctions Between Long-Term & Short-Term Psychiatric Beds "Short term hospital inpatient psychiatric services" is defined in existing rule 10-5.011(1)(o)1, FAC, as follows: Short term hospital inpatient psychiatric services means a category of services which provides a 24-hour a day therapeutic milieu for persons suffering from mental health problems which are so severe and acute that they need intensive, full-time care. Acute psychiatric inpatient care is defined as a service not exceeding three months and averaging length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. "Long term psychiatric services" is defined in existing rule 10- 5.011(1)(p)1., FAC as a category of services which provides hospital based inpatient services averaging a length of stay of 90 days. Neither rule addresses services to adults with an average length of stay (ALOS) of 30-90 days, or services to children and adolescents with a 60-90 day ALOS. Because of this, and the "averaging" process, long term hospitals legitimately serve "short term" patients and short term hospitals may serve "long term" patients. One party has calculated than a long term facility could legally provide short term services for 80% of its patients, and long term services for only 20% of its patients and still have an ALOS of 90 days. Under the existing rules a facility must file a CON application to convert from long term to short term beds, or vice versa, and is subject to sanctions for failure to comply with the designation on its CON. The proposed changes would repeal rule 10-5.011(1) (p), FAC regarding long term services, and would amend rule 10- 5.011(1) (o), FAC to delete the definition of short term services, thereby permitting facilities to serve patients without regard to length of stay. The proposed changes are supported by several factors upon which a reasonable person could rely. Substantial changes have occurred in the last decade in clinical practices and in third party reimbursement to reduce the ALOS for hospital inpatient psychiatric care. Prior to the 1960s, there was no distinction between long and short term care, as all hospital based care was long term with an emphasis on psychoanalytic therapy. Beginning in the 1960s, the concept of community mental health programs evolved with an emphasis on deinstitutionalization of patients in large public "asylums" and with a goal of treatment in the least restrictive environment. In more recent years the trend has spread to the private sector. Improvements in the availability and use of psychiatric drugs, the use of outpatient care or partial hospitalization, and improved follow up care have led to a dramatic decrease in ALOS. Long term care is costly, and whether third party payors have been a driving force, or are merely responding to the trends described above, long term inpatient reimbursement is virtually nonexistent. During the 19805, most insurance companies imposed a 30-day limit on psychiatric inpatient care or imposed monetary limits which would have effectively paid for less than a 90-day term. CHAMPUS, the program providing insurance to military dependents, was providing long term coverage in 1982, but by 1986 its coverage was rarely available for more than 30-60 days, and today, under CHAMPUS' case management system, 30 days is a "luxurious amount". Other large third-party payors such as Blue Cross/Blue Shield have similar limits or aggressively use case management (the close scrutiny of need on a case by case basis) to limit reimbursement for inpatient care. Of the two or three long term facilities in existence at the time that HRS' rules were originally adopted, only one, Anclote Manor still reported an ALOS of over 90 days by 1989, dropping from an ALOS of 477.9 days in 1986 to 145.4 days in 1989. At the same time its occupancy rate dropped below 50%. There is an interesting dialogue among experts as to whether there still exists a clinical distinction between long term and short term inpatient psychiatric care. Studies at the Florida Mental Health Institute found no difference in rate of rehospitalization over a 12 month period between patients who were in a nine week program and patients from Florida State Hospital with a 500 day length of stay. Some mental health practitioners are looking now at treating the chronic psychiatric patient with repeated short term hospital stays and less intensive care between episodes, rather than a single long term inpatient stay. Other practitioners maintain that a long term psychiatric problem is behavioral in nature and requires a total life readjustment and longer length of stay. Whichever practice may be preferable, the facts remain that fewer and fewer mental patients are being treated with long term hospitalization. The proposed rules would not foreclose any facility from providing long term care, if it finds the need. To the extent that a clinical distinction exists between short and long term care, the existing rules do not address that distinction, except from a wholly arbitrary length of stay perspective. The existing rules no longer serve valid health care objectives. Existing providers with short term CONs are concerned that the allowing long term facilities to convert will further glut an underutilized market and will result in an increase in vacant beds and a rise in the cost of health services, contrary to the intent of the CON program. Intensive residential treatment facilities (IRTFs), which will be folded into the need methodology for children and adolescent beds, have no current restrictions on length of stay and may already compete with impunity with the short term providers. Moreover, long term facilities are also providing substantial short term care as a result of the trends discussed above. HRS has not consistently enforced the length of stay restrictions of long term providers' CONs. Whether those CONs were improvidently granted is beside the point. The capital costs have already been incurred; the beds are available; and the beds are being used, in part, for short term services. Abolishing the distinction is a rational approach to current conditions. And in determining that all existing providers would be placed in the same position regarding length of stay, HRS avoids the regulatory nightmare of trying to enforce limitations on existing providers and approving new beds without limitations. Creating a Distinction Between Adult and Children/Adolescent Beds Rule 10-5.011(1)(o)3.c. creates a CON distinction between general psychiatric services for adults, and those services for children and adolescents. Rule 10-5.011(1)(o)4., as proposed, would create separate need criteria for hospital inpatient general psychiatric services for adults and for children/adolescents. Adolescents are defined in Rule 10- 5.011(1)(o)2.a., as persons age 14 through 17 years. Persons over 17 years are adults, and under 14 years are children. There are valid clinical reasons to distinguish between programs fob the separate age groups. Although there is some overlap, differing therapies are appropriate with different ages. The types of services offered to adults are not the same as those which are offered to children. Children, for example, often receive academic educational services while being hospitalized. Adults receive career or vocational counseling and marriage counseling. The required separation by age categories would remove some flexibility from providers. However, this is offset by the Department's valid need to track for planning purposes inpatient services to children and adolescents separately from those provided to adults. Based on anecdotal evidence, HRS' Office of Alcohol, Drug Abuse and Mental Health Program Office is concerned about the possible overutilization of hospital inpatient services for children and adolescents and the potential that when insurance reimbursement expires they are discharged without clinical bases. Taking Inventory Under the proposed rule, in order to separately regulate adult and children/adolescent beds, HRS will fix an inventory of uses as of the time that the rule takes effect. For facilities with CONs which already allocate beds between the two groups, the proposed rule will have no effect. For facilities without a designation, as long as adults and children/adolescents are kept in separate programs, the allocation can now be mixed and changed at will. The rule amendment will freeze that use in place. HRS has conducted a preliminary survey to determine the existing uses of psychiatric, substance abuse and residential treatment program beds. The survey of approximately 120 facilities is complete, but is not intended to limit those facilities unless their CON already provides a limit. A final inventory will be taken after the proposed rules become effective. The inventory will be published, and providers will be given an opportunity to contest its findings. The ultimate outcome will be amended CONs and licenses which reflect each facility's mix of adult and children/adolescent beds. The process is a fair and reasonable means of commencing separate regulation of services to these age groups. The Definitions Proposed rules 10-5.011(1)(o)2.1., 2.p., and 2.t.) define "hospital inpatient general psychiatric services", "psychiatric disorder" and "substance abuse", respectively. Each of these provisions defines the terms by reference to classifications contained in the Diagnostic and Statistical Manual of Mental Diseases (DSM-III-R Manual) and equivalent classifications contained- in the International Classification of Diseases (ICD-9 Codes). The rule as originally proposed included the phrase "or its subsequent revisions", after incorporating the manuals by reference. In testimony, and in the parties second agreement (Hearing Office exhibit 3) the phrase is deleted. However, it still appears in proposed rule 10-5.011(1) (o)2.1., perhaps inadvertently. The DSM-III-R is a generally recognized manual for the classification of mental disorders and is widely used by clinicians and medical records professionals to categorize the conditions of patients. The ICD-9 codes are broader than just mental disorders, but they have a section on mental disorders with numbers that are identical to those in the DSM-III-R. Although the manuals are complex and subject to interpretation, clinicians are accustomed to their use and they provide a reasonable guide as to the services which may be provided in an inpatient substance abuse program, as distinguished from an inpatient psychiatric program. Advertising Limited Proposed rule 10-5.011(1)(o)3.d. (as amended in the parties second agreement, Hearing Officer exhibit #3), provides: D. Advertising of services. The number of beds for adult or for children and adolescent hospital inpatient general psychiatric services shall be indicated on the face of the hospital's license. Beds in intensive residential treatment programs for children and adolescents which are licensed as specialty hospital beds will be indicated as intensive residential treatment program beds on the face of the hospital's license. Only hospitals with separately-licensed hospital inpatient general psychiatric services, including facilities with intensive residential treatment programs for children and adolescents which are licensed as specialty hospitals, can advertise to the public the availability of hospital inpatient general psychiatric services. A hospital with separately licensed hospital inpatient general psychiatric services that does not have a certificate of need for hospital inpatient substance abuse services may advertise that they [sic] provide services for patients with a principal psychiatric diagnosis excluding substance abuse and a secondary substance abuse disorder. The Department does not currently have CON, licensure, or other rules which limit the ability of a health care provider to advertise its services, and has never used advertising as a factor in conducting CON review for any proposed services. HRS included provisions regarding advertising in its proposed rules because it had evidence that existing facilities have used misleading advertisements. The evidence came from other providers, rather than consumers. However, it is the consumer whom the agency feels may be confused by advertising which implies that services are available when such services cannot be legally provided under the facility's license. The advertising provision is prospective in nature, seeking to prevent licensed providers from advertising services for which they are not licensed. The provisions do not relate to CON review, and the staff is unclear as to how the rule would be implemented. Licensing and CON review are two separate functions within the agency. Although the term is not defined in the proposed rule, advertising broadly includes word of mouth referrals and public presentations by professionals in the community, as well as traditional media and written advertisements. Properly utilized, advertising helps consumers exercise choice and gain access to needed services. Improper advertising is subject to the regulation of federal and state agencies other than the department. New Need Methodology, with Preferences Proposed Rule 10-5.011(1)(o)4., deletes the existing population ratio methodology and creates a need formula based upon use rate, for adult and children/adolescent inpatient psychiatric services. Certain preferences are also described. 34. Rule 10-5.011(1) (o)4.e.(III) provides: In order to insure access to hospital inpatient general psychiatric services for Medicaid-eligible and charity care adults, forty percent of the gross bed need allocated to each district for hospital inpatient general psychiatric services for adults should be allocated to general hospitals. The same provision for children and adolescent services is found in rule 10-5.011(1)(o)4.h.(III). Medicaid reimbursement is not available for inpatient services in a specialty hospital. 35. Rule 10-5.011(1)(o)4.i. provides: Preferences Among Competing Applicants for Hospital Inpatient General Psychiatric Services. In weighing and balancing statutory and rule review criteria, preference will be given to applicants who: Provide Medicaid and charity care days as a percentage of its total patient days equal to or greater than the average percentage of Medicaid and charity care patient days of total patient days provided by other hospitals in the district, as determined for the most recent calendar year prior to the year of the application for which data are available from the Health Care Cost Containment Board. Propose to serve the most seriously mentally ill patients (e.g. suicidal patients; patients with acute schizophrenia; patients with severe depression) to the extent that these patients can benefit from a hospital-based organized inpatient treatment program. Propose to service Medicaid-eligible persons. Propose to service individuals without regard to their ability to pay. Provide a continuum of psychiatric services for children and adolescents, including services following discharge. The preferences are similar to those in CON rules relating to other types of health services and are intended to implement, in part, the legislative mandate that the agency consider an applicant's ". . . past and proposed provision of health care services to medicaid patients and the medically indigent." Section 381.705(1) (n), F.S. Under Medicaid reimbursement general hospitals are paid a set per diem based on a variety of services provided to all Medicaid patients, regardless of actual cost of the individual service. As psychiatric services are generally less costly than other services on a per diem basis, hospitals may recoup a greater percentage of their costs in serving Medicaid psychiatric patients. This and the fact that public hospitals receive some governmental subsidies do not obviate the need for incentives in the CON program. Not all of the charity care provided by these hospitals is funded and a large amount is written off. Although Petitioners argue that the preferences are not needed, or are too generous, none provide competent evidence that the facilities who do not enjoy the preferences are unduly prejudiced. The 40% allocation of bed need to general hospitals is a guideline, not a maximum, as applied by the agency, and presumes that there are general hospitals competing in any batch in question. It is not intended to frustrate a separate section of the rule which allows a hospital with at least an 85% occupancy rate to expand regardless of need shown in the formula and the occupancy rate district-wide. See 10- 5.011(1) (o)4.d. and g. "Evaluation of Treatment Outcomes" The proposed rules contain three provisions relating to a hospital's evaluation of its patients' treatment outcomes. Rule 10-5.011(1) (o)3.i, includes among "required services", ". . . an overall program evaluation of the treatment outcomes for discharged patients to determine program effectiveness." Rule 10-5.011(1)(o)8.j., requires in the application, A description of the methods to be used to evaluate the outcome of the treatments provided and to determine the effectiveness of the program, including any summary evaluation outcome results for hospital inpatient psychiatric services provided at other facilities owned or operated by the applicant in Florida and other states. The data shall exclude patient specific information. Rule 10-5.011(1)(o)9.e., imposes a similar additional requirement in applications from providers seeking more beds: A summary description of any treatment outcome evaluation of the hospital inpatient general psychiatric services provided at the facility for which additional beds are requested, for children, adolescents or adults as applicable to the facility for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. The purpose of these requirements, according to HRS, is to insure that hospitals will know whether its patients are better off when they leave than when they were admitted to the program. Most hospitals have such knowledge. The terms, "outcome determination", "summary evaluation outcome results", "summary description of treatment outcome evaluation" and "overall program evaluation of treatment outcomes", are nowhere defined in the proposed rules, and the department intends to leave to each applicant or provider the methodology for determining whether its patients are "better off" for having been in its program. Hospitals do not routinely evaluate their patients after discharge and such follow up would be difficult and costly. Most hospitals do, however, establish a treatment plan upon admission, continue to review and revise that plan as needed throughout treatment, and determine the patients' readiness for discharge based on the goals successfully attained. This is the process described by Florida Hospital's Center of Psychiatry Administrative Director. The rules require no more than a description similar to that provided by Florida Hospital. The rules set no standards and do not dictate that follow- up of discharged patients be accomplished, even though post discharge evaluation may be of value and is generally accepted as the best tool for measuring treatment effectiveness. The measurement of treatment outcome is an inexact process and relies on a series of subjective standards which need to be described. HRS does not intend to set those standards and, other than have its applicants demonstrate that a process is in place, the agency has no idea how the required information will impact its CON review. Without definitions and standards, the agency will have no way of comparing one applicant's information with another's. Without specificity and more guidance the rules fail to apprise the applicant of what is required and will provide no meaningful information to the agency in its CON review function. Miscellaneous Provisions The Non-Physician Director. The proposed definition of "Hospital Inpatient General Psychiatric Services" in Rule 10-5.011(1) (o)2.1. includes services provided under the direction of a psychiatrist or clinical psychologist In drafting this definition, agency staff relied on advice from experts at their workshops and on advice from the agency's own Alcohol, Drug Abuse and Mental Health Program Office, to the effect that professionals, other than physicians, are qualified to direct the units. Interpretation and Application. It is not the intention of HRS that its rules be interpreted to override good medical practice or the sound judgement of treating physicians. Thus, the rules would not prohibit stabilization of a patient who is presented to the emergency room of a hospital without a CON for substance abuse or psychiatric services. Stabilized Alzheimers patients may be housed in nursing homes. Nor do the rules prohibit or subject to sanctions the occasional admission of a psychiatric or substance abuse patient to a non-substance abuse or psychiatric bed so long as this occurs infrequently in a hospital without psychiatric or substance abuse programs. "Scatter" beds are not eliminated. Those beds would continue to be licensed as acute-care beds, as they would not be considered part of an organized program, with staff and protocols, to provide psychiatric or substance abuse services. Proposed rule 10-5.011(1)(o)4.h.(v) provides that applicants for IRTPs for children and adolescents seeking licensing as a specialty hospital must provide documentation that the district's licensed non-hospital IRTPs do not meet the need for the proposed service. The department is not seeking specific utilization data in this regard, as such is not available. General information on the availability of alternatives to inpatient hospital services is obtainable from local health councils and mental health professionals in the community. Quarterly Reports. Proposed rule 10-5.011(1)(o)10. requires: Facilities providing licensed hospital inpatient general psychiatric services shall report to the department or its designee, within 45 days after the end of each calendar quarter, the number of hospital inpatient general psychiatric services admissions and patient days by age and primary diagnosis ICD-9 code. The Health Care Cost Containment Board (HCCCB) is already collecting similar quarterly data from providers. The reporting system is being updated and improved but in the meantime HRS is experiencing problems with the type and accuracy of the data it receives from HCCCB. One problem is that HCCCB collects its data with regard to all discharges in a psychiatric or substance abuse diagnostic category, whereas HRS is interested only in data from a psychiatric or substance abuse program. Until the system improves, HRS needs the information it seeks from the providers in order to plan and apply the need methodology. The agency intends to designate local health councils to collect the data and has already worked with them to set up a system. If reports provided to the HCCCB comply with the proposed requirement, HRS has no problem in receiving a duplicate of those reports. The Economic Impact Statement Pursuant to Section 120.54(2), F.S., HRS prepared an economic impact statement for the proposed rule. It was authored by Elfie Stamm, a Health Services and Facilities Consultant Supervisor with HRS. Ms. Stamm has a Masters degree in psychology and has completed course work for a Ph.D. in psychology. She has been employed by HRS for 13 years, including the last ten years in the Office of Comprehensive Health Planning. She is responsible for developing CON rules, portions of the state health plan, and special health care studies. It was impossible for Ms. Stamm to determine how the rule could impact the public at large. The economic impact statement addresses generally the effect of abolishing the distinction between long and short term services and acknowledges that the rule will increase competition among short term service providers. The impact statement also addresses a positive impact on current long term providers.
The Issue Whether Westchester General Hospital's exemption for HRS Certificate of Need review should be forfeited or revoked because of failure to take actions required for preservation of its exemption.
Findings Of Fact Based upon the evidence presented, the following facts are determined: I. The Proposed Westchester Hospital Construction Project At all times material hereto, WESTCHESTER has operated a 100-bed osteopathic hospital in Miami, Florida. In 1971, it decided to expand by constructing a 112-bed second floor addition. To be eligible for certain federal benefits, an HRS Certificate of Need was required for the expanded hospital project. Such certificates were normally issued by HRS upon the recommendation of the appropriate local health planning council, now known as health system agencies. (Testimony of Urlich, Forehand; R-9.) Thus, on June 30, 1971, WESTCHESTER sought a favorable recommendation for the project from the Health Planning Council of South Florida, predecessor to Intervenor, Health Systems Agency of South Florida, Inc. (both hereafter referred to as "COUNCIL"). However, the COUNCIL preferred construction of the new 212-bed replacement hospital at a site across the street from WESTCHESTER's existing facility. WESTCHESTER ultimately acceded to the COUNCIL's wishes, and agreed to construct a new replacement hospital rather than simply expand its existing hospital. The COUNCIL's approval of the proposed WESTCHESTER replacement hospital followed on January 17, 1972. (Testimony of Urlich: R-1, R-2, R-9.) On January 7, 1972, WESTCHESTER formally requested HRS to issue a Certificate of Need for the proposed 212-bed replacement hospital; on February 16, 1972, HRS notified the U.S. Department of Health, Education, and Welfare that "on the strength of the approval of the new 212-bed Westchester . . . Hospital by the . . . Council . . . this agency stands ready to issue a Certificate of Need for the facility if the project is found to be financially feasible." (Testimony of Urlich; P-4.) By March 1978, due to increased construction costs, WESTCHESTER had decided to build a 125-bed replacement hospital, rather than the 212-bed replacement originally planned. (Testimony of Urlich, P 4.) II. The Florida "Health Facilities Planing Act", and Westchester's Grandfather Exemption In 1972, the Florida Legislature enacted the comprehensive "Health Facilities Planning Act" ("Act", Sections 381.493 through 381.497, Florida Statutes. The Act, generally, required proposed new or replacement health care facilities such as hospitals and nursing homes, to first obtain from HRS a Certificate of Need (a statement evidencing community need for the proposed facility); however, the Act granted a "grandfather exemption" to Certificate of Need requirements for projects where land had been acquired and preliminary construction plans filed with HRS prior to July 1, 1973. Section 381.497, Florida Statutes (1973). In this proceeding, HRS and the COUNCIL have conceded that WESTCHESTER qualified for the grandfather exemption conferred by Section 381.497. Between 1974 and 1978, HRS and the COUNCIL repeatedly stated, and represented to WESTCHESTER, that its proposed hospital project was grandfathered under the Act: "It appears that our project is grandfathered [under Certificate of Need Laws] because of the expenses you have incurred subsequent to your project being approved by the [Council] . . . ."--letter dated January 21, 1974, from Health and Rehabilitative Services to Westchester. (P-4. p. 14.) "This decision [not to reconsider its earlier approval of the Westchester project] is based on the fact that Westchester is grandfathered in under the Certificate of Need Law."--Letter dated January 24, 1974, from Council to Health and Rehabilitative Services, Bureau of Community Medical Facilities. (R-7). "In reviewing the files . . . I note that your project was 'grandfathered' due to the prior approval by the [Council] . . . and the amount of expenditures made in behalf of the project."--Letter dated September 17, 1974, from Health and Rehabilitative Services to Westchester. (P.8.) "We find that your [hospital replacement facility] . . . is not reviewable under the State Certificate of Need nor under Section 1122 of P.L. 92-603, since your project has been 'grandfathered' under such laws."--Letter dated March 1, 1977, from Health and Rehabili- tative Services to Westchester. (P.14.) However, the decision by HRS and the COUNCIL that WESTCHESTER was exempt form the Act's Certificate of Need requirements was not based upon an explicit finding that WESTCHESTER had satisfied the two grandfather exemption criteria of Section 381.497, Florida Statutes: acquisition of land and filing of preliminary construction plans with HRS by July 1, 1973. Rather, it was based upon their realization, under principles of estoppel, that they had made numerous representations to WESTCHESTER that its project was grandfathered-- representations which WESTCHESTER had subsequently relied and acted upon in good faith. (Testimony of Forehand, Chamlis; P-4.) III. 1978 Legislative Repeal of Statutory Grandfather Exception: HRS Interpretation and Implementation In 1978, the Florida Legislature enacted Chapter 78-194, Section 3, Laws of Florida, which repealed Section 381.497 (the Act's grandfather exemption), effective July 1, 1979. In connection with that repeal, the Legislature (1) directed HRS to provide notice to exempted health care facilities by July 15, 1978; (2) stated that if HRS had previously provided written notification to projects that they were exempt or grandfathered, such notice would be considered "as valid evidence of inapplicability of [the Act] . . . ." Section 1, supra; and (3) provided that any project so exempted could reduce the number of authorized beds without HRS or health system agency approval. Section 1, supra. (P-13.) HRS interpreted Chapter 78-194, supra, as requiring health care facilities previously exempted by Section 381.497, to be under physical and continuous construction (pursuant to final construction plans approved by HRS) by July 1, 1979, in order to "preserve" their exemption from Certificate of Need review. During July 1978, pursuant to the legislative directive, HRS notified those on its list of exempt facilities as to the passage of Chapter 78-194, supra, and the requirement of physical and continuous construction by July 1, 1979. However, WESTCHESTER was not notified at that time because it was not on HRS' list of exempted facilities that had met the two exemption criteria of Section 381.497. It was not until October 28, 1978 (when HRS finally determined that WESTCHESTER should be treated as an exempted facility) that WESTCHESTER was notified in writing by HRS as to the requirements of Chapter 78-194, supra. Since HRS had promulgated no rules interpreting or implementing Chapter 78-194, supra, the content of its notice to WESTCHESTER is significant. In its October 28, 1978, notice to WESTCHESTER, HRS stated: "The purposes of this letter is [sic] to state the position of this agency with respect to the grandfathered status of your project, to advise you of the contents of SB 764 [Chapter 78-194] and to advise that the grandfather clause (Section 381.497 of the statutes) is repealed effective 1 July 1979. With the repeal of the grandfather clause on 1 July 1979, your construction project [whether for a 105-bed replacement facility or expansion of your current facility to 212 beds] must be under physical and continuous construction, pursuant to final construction plans approved by the Office of Licensure and Certification, by 1 July 1979 to preserve the exemption from review status of the project." (P-4) (Testimony of Forehand; P-4, P-23.) Effective June 5, 1979, HRS adopted rules for the purpose of implementing the Legislature's 1978 repeal of the Act's grandfather clause. Those rules incorporated HRS' interpretation of Chapter 78-194 previously announced in its notices to exempt facilities, i.e., such facilities were required to be placed under "physical and continuous construction, pursuant to final construction plans approved by the department, prior to 1 July 1979." Rule 10-5.05, Florida Administrative Code. However, the term "construction," infra, was specifically defined by Rule 10-5.02(21): "'Construction' means the commencement of and continuous activities beyond site preparation normally associated with erecting, altering or modifying a health care facility pursuant to construction plans and specifications approved by the department under the provisions of Rules 10D-28, 10D-29 or 10D-33, Florida Administrative Code." Id. WESTCHESTER subsequently challenged the validity of these rules pursuant to Section 120.56, Florida Statutes. By final order entered April 18,1980, a Division of Administrative Hearings hearing officer declared rules 10-5.05 and 10-5.02(21) invalid exercises of delegated legislative authority because of inadequate economic impact statements prepared in connection with their adoption. WESTCHESTER appealed the final order to the First District Court of Appeal, and HRS timely cross-appealed. Although WESTCHESTER's appeal was subsequently dismissed, the HRS cross-appeal was preserved and remains pending before the appellate court. (Testimony of Forehand; P-17, P-17A, P-17B.) By defining "construction" as used in Section 10-5.05 to mean commencement of and continuous activities "beyond site preparation," HRS promulgated a definition different from, and more restrictive than the one generally utilized in the architectural and construction industry. As used by professionals in that industry, "construction" may commence prior to site preparation indicators of commencement of construction include the execution of a construction contract with the general contractor, the obtaining of a building or foundation permit, the ordering of building materials, or the signing of contracts with subcontractors. Any of these events may occur before clearing and preparing the site--the first on-site indicator of construction. (Testimony of Forehand, P-17, P-17A, R-27, R-28.) HRS' interpretation that Chapter 78-194, supra, required grandfathered projects to be placed under physical and continuous construction beyond site preparation prior to July 1, 1979, was not conveyed to grandfathered projects through its July 1978 form notice, or individual notice to WESTCHESTER dated October 28, 1978. The grandfathered facilities received constructive notice of the "beyond site preparation" requirement by the promulgation of Rule 10- 5.02(21). Thus, between its effective date, June 5, 1979, and the July 1, 1979, deadline for the commencement of construction "beyond site preparation," the grandfathered projects, including WESTCHESTER, were allowed 25 days to fulfill the new HRS requirement for preservation of their exemptions. (Testimony of Forehand, Chamlis; P-4, R-23.) The factual basis underlying the HRS interpretation of Chapter 78-194, supra (embraced by its 1978 implementing rules infra), is that its ability to conduct effective health care planning under the Act was frustrated by the continued existence of exempt health care facilities lacking a definite time for completion, or even commencement, of construction. Such exempt facilities, represented substantial future bed-capacity; in areas where they were planned, HRS could not accurately determine when, if, and to what extent additional health care facilities were needed. HRS reasonably interpreted Chapter 78-194, supra, as a legislative directive that exempt facilities must "build, or not build"; by adding a rule definition requiring construction beyond site preparation, HRS was attempting to ensure that construction efforts were bona fide and substantial, and not merely token actions taken to preserve exempt status. (Testimony of Forehand, Chamlis.) IV. Westchester's Actions in Constructing Hospital Project Between 1972 and 1977, on the basis of the COUNCIL's and HRS' approvals (Paragraphs 2-3, infra) and representations (Paragraph 6, infra) WESTCHESTER acquired land, incurred expenses, entered contracts, and made commitments in connection with constructing the replacement hospital. In January 1974 HRS seemingly accepted the assertion that WESTCHESTER had expanded, or entered, financial commitments of approximately $1,340,000 for construction of the new hospital. WESTCHESTER retained surveyors, engineers, and lawyers to obtain necessary zoning changes, building permits, and plat approvals, and, through 1979, paid them in excess of $83,000. In November 1979, HRS was informed by WESTCHESTER's certified public accountant that WESTCHESTER had, to date, incurred expenditures of $2,810,000 in connection with preparing for and constructing the new hospital. In this proceeding, neither HRS nor the COUNCIL have disputed WESTCHESTER's assertion that it has expended substantial monies for the purpose of constructing the replacement hospital. (Testimony of Urlich, P-4, P-9.) During 1979, WESTCHESTER experienced extensive difficulties and delays in obtaining the Dade County building permit and plat approvals required to construct the replacement hospital. The building permit was applied for in April 1979, and a "foundation only" building permit was issued by the Dade County Building Department on July 2, 1979. The effectiveness of the permit, however, was contingent upon final approval and recordation of the project plat. WESTCHESTER spent in excess of $2,900 in expenses to obtain this building permit. It was, however, the obtaining of county platting approval which proved most difficult and exclusive. After WESTCHESTER discovered the monuments placed earlier on the project site had been destroyed, the entire project had to be resurveyed and the monuments reset prior to obtaining plat approval. The process of plat approval required formal action by the Dade County Commission and, prior to reaching the Commission, a project of this complexity and magnitude required independent review and approval by a myriad of local governmental agencies. During the review process, various problems arose involving drainage, ingress and egress, a canal crossing, and a street closing. WESTCHESTER paid water hookup fees of $5,000 and entered numerous agreements with various county departments. A primary cause of the delay in obtaining platting approval is attributable to the failure of the Dade County Building Department and WESTCHESTER to communicate frequently concerning the problems that were arising and what steps were necessary to overcome them. As an example, 11 specific deficiencies in WESTCHESTER's platting application were identified by the building department on December 9, 1979; however, WESTCHESTER was not notified of these deficiencies until February 1980. (Testimony of Urlich; P-20, P-21.) Because of WESTCHESTER's failure to obtain final plat approval from the county, construction of the hospital foundation could not begin and the building permit expired in February 1990. It is reasonable to expect that, with diligent effort, the platting deficiencies could have been overcome within a three-month period. However, the filing of the HRS' administrative complaint in December 1979 placed the WESTCHESTER construction project in jeopardy, causing WESTCHESTER to temporarily halt its efforts to obtain local government approvals and proceed with construction. Under the circumstances, WESTCHESTER's cessation of activity in December was reasonable, and HRS does not assert otherwise. (Testimony of Urlich; P-20, P-21.) In April 1979, WESTCHESTER submitted final construction plans for its hospital to HRS for State review and approval; a $5,000 construction plan review fee was paid. On June 25, 1979, the supervising HRS architect, approved commencement of foundation work for the 125-bed replacement hospital, but withheld final approval of the remainder of the facility pending further review. The architect advised WESTCHESTER that subsequent review might require changes within the hospital building, thereby affecting its foundation. The architect cautioned: "Therefore, the risk of starting foundation work at this time must be assumed by [WESTCHESTER] . . . " (R-22.) It was not until September 18, 1979, that the HRS architect gave final approval to WESTCHESTER's construction plans. Expert testimony established that it would have been unreasonable, under such circumstances, for WESTCHESTER to proceed with construction of the foundation prior to final HRS approval of the plans. WESTCHESTER could not have begun construction of the foundation, in any event, because it had not yet obtained final plat approval from the Dade County Commission. (Testimony of Urlich; P-20, R-21, R-22.) On or about June 29, 1979, WESTCHESTER began preparing the hospital construction site. It erected a sign identifying the site as the location for a new hospital. Heavy earth-moving equipment was observed clearing and leveling the terrain. By August 31, 1979, WESTCHESTER had installed a construction trailer at the site and clearing and leveling had been completed. However, by the end of September 1979 no further construction activity at the site had taken place. The foundation had not been staked-out, excavated, or poured; neither were any construction materials present. As of December 1979 when HRS failed its administrative complaint in this case, WESTCHESTER's construction activity at the site had not progressed beyond site preparation. (Testimony of Urlich; P-2, P-25.) WESTCHESTER's delays in obtaining the necessary government approvals and constructing the hospital in 1979 were caused by a combination of factors, one of which was WESTCHESTER's failure to doggedly and tenatiously attack each problem raised during the governmental reviews until it was satisfactorily resolved. However, given the magnitude and complexity of the construction project, the extensive governmental review and permitting processes involved, and unforeseeable problems such as the obliteration of previous survey monuments on the project site, it is concluded that WESTCHESTER made reasonably diligent efforts between November 1978 and December 1978 to obtain the required governmental approvals and proceed with construction. (Testimony of Urlich; P- 2, P-21, P-22, P-25, R-21, R-22.) V. Opportunity for Westchester to Show compliance with HRS Requirements Between August and December 1979--prior to issuance of the HRS administrative complaint--HRS and WESTCHESTER exchanged correspondence concerning the requirements of HRS Rules 10-5.02(21) and 10-5.05(2), Florida Administrative Code, and the extent of WESTCHESTER's compliance. WESTCHESTER, through its authorized representatives and attorneys, was fully informed of the rule requirements and aware that HRS was considering taking action against it for failure to comply with those requirements. (Testimony of Forehand; P-3, P- 1, P-9, P-12.) During November 1979 WESTCHESTER's attorney met with HRS representatives concerning the question of WESTCHESTER's compliance with the requirements of Rules 10-5.02(21) and 10-5.05(2)--i.e., physical and continuous construction, beyond site preparation, prior to July 1, 1979. The WESTCHESTER attorney asked for and was given the opportunity to investigate and present information to HRS for the purpose of showing compliance with HRS requirements. HRS agreed to take no action against WESTCHESTER until receipt of the attorney's response. Subsequently, WESTCHESTER's attorney presented information to HRS for the purpose of showing compliance with all lawful requirements for preservation of WESTCHESTER's grandfather exemption; it was only after receiving this information that HRS instituted the administrative action which is the subject of this proceeding. However, at no time did HRS show a copy of the proposed administrative complaint to WESTCHESTER representatives for the purpose of allowing them an opportunity to show that the allegations were unfounded. (Testimony of Forehand; P-3, P-8, P-9, P-12.)
Conclusions Westchester General Hospital failed to meet requirements for preserving its exemption, as specified by HRS Rule 10-5.05 and the accompanying non-rule interpretation of Chapter 78-194, Section 3, Laws of Florida; but under the particular circumstances this case, forfeiture or revocation of Westchester General Hospital's exemption is barred by principles of equitable estoppel. HRS should allow the hospital six (6) months from entry of the final order in this case within which to take the actions required for preservation of its exemption.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That Petitioner, HRS, enter a final order: Finding that WESTCHESTER failed to meet requirements for preserving its exemption, as specified by HRS Rule 10-5.05 and the accompanying non-rule interpretation of Chapter 78-194, Section 3, Laws of Florida; but Concluding that, under the particular circumstances of this case, forfeiture or revocation of WESTCHESTER's exemption for such failure is barred by principles of equitable estoppel; and Allowing WESTCHESTER six (6) months from entry of the order within which to take actions necessary to meet the above requirements for preservation of its exemption. DONE AND ENTERED this 9th day of January 1981 in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of January 1981.
