The Issue Whether Respondent, Agency for Health Care Administration (Agency) should have issued Petitioner, Haverhill Care Center and Beverly Health Care West Palm Beach, Beverly Enterprises-Florida, Inc., d/b/a Beverly Gulf-Coast Florida (Haverhill), a conditional license for the periods October 14, 1998, through January 3, 1999, and December 8, 1999, through February 9, 2000.
Findings Of Fact At all times material hereto, the Agency was the enforcing agency with regard to nursing home licensure law pursuant to Chapter 400, Part II, Florida Statutes. Haverhill is a nursing home located in West Palm Beach, Florida. On October 14, 1998, the Agency surveyed Haverhill and determined that the facility violated 42 CFR Sections 483.13(c), 483.25(h)(2), and 483.75 in its care of B. B., a resident at the facility who had eloped from Haverhill on September 24, 1998. The deficiencies were described by tag numbers F224, F324, and F514. The Agency determined that these deficiencies were Class II deficiencies under the state rating scheme and the Agency also assigned them a severity rating of "G", which is a determination under the federal rating scheme that the deficiency was isolated but caused actual harm to the resident. B. B. was a 78-year-old male who had dementia, congestive heart failure, hypertension, and a history of a pulmonary embolism. He was independent with his daily activities and ambulatory. From the end of 1997 through September 1998, B. B. underwent a series of admissions and discharges from different short-term and long-term care facilities. In late 1997, he went to the hospital with congestive heart failure, and while he was there, his doctor recommended that he be placed in a long-term care setting. After his discharge from the hospital, B. B. went to a nursing home known as IHS Lake Worth, where he remained until May of 1998. In May 1998, B. B. experienced a pulmonary embolism and was sent to the hospital. Staff from IHS Lake Worth sent a transfer form to the hospital that noted that B. B. was a "wanderer" and would "go outside if not monitored." When B. B. was discharged from the hospital in late May 1998, he could not go back to IHS Lake Worth because the Agency had placed a moratorium on admissions to IHS Lake Worth. B. B. was sent to a sister facility, IHS of West Palm Beach, where he remained until July 6, 1998. During his stay at IHS of West Palm Beach, staff at the facility noted that B. B. "wanders at times, needs direction." On July 6, 1998, B. B. was discharged to his home, where he remained until August 5, 1998, when his daughter S. B. determined that she was unable to care for him and readmitted him to IHS Lake Worth. While at IHS Lake Worth, B. B. was given Haldol, an anti-psychotic drug. He was also assessed by the staff on August 6, 1998, as being appropriate for a locked unit due to "wandering and confusion and past history of agitation and combativeness." During the next few days, B. B. exhibited episodes of angry outbursts and agitation, which caused staff to be fearful for others. On August 12, 1998, B. B. was transferred to Four Seasons, an assisted living facility. The record review on August 12, 1998, recorded, "Four Seasons came and evaluated and took resident upon assessment. Daughter agreeable. Doctor agreeable. Locked unit most appropriate place for this resident." Four Seasons was closed by the Agency. While the facility was being closed, B. B. got on a bus. The Delray Beach police found him and returned him to the facility After Four Seasons closed, B. B. returned home. While at home, B. B.'s behavior became erratic. He would get up at 4:00 a.m. and take a shower. B. B. was being given Ativan to calm him down. On September 16, 1998, B. B. was readmitted to IHS West Palm Beach, which had a Wanderguard alarm system designed to notify staff if a patient attempted to leave the facility. However, the Wanderguard system at IHS West Palm was not fully functional. While at IHS West Palm Beach, B. B. wandered around the facility and attempted to get out of the facility. The administrator at IHS West Palm Beach determined that B. B. needed to be transferred to another facility. At approximately two o'clock on Friday afternoon, September 18, 1998, Kit Johnson, the Social Services Director at IHS West Palm Beach, spoke with S. B. and advised her that B. B. needed to be transferred to a more secure facility. Ms. Johnson contacted several facilities in an effort to find a facility which would accept B. B. She spoke to Robb Eason, Haverhill's Admissions Director, concerning placement for B. B. She advised Mr. Eason that IHS West Palm Beach could not keep B. B. because he was a wanderer and could not be maintained safely at IHS West Palm Beach. Mr. Eason agreed to have B. B. transferred to Haverhill. Ms. Johnson called S. B. and advised her that Haverhill was willing to take B. B. S. B. indicated that she could not be there because her mother was ill. At four o'clock, nursing staff at IHS West Palm Beach were notified that B. B. would not be transferred until the next day because S. B. could not come to the facility until the next day. B. B. became very upset because his daughter was not coming and walked off the unit. A security guard had to be called to return B. B. to his room. A decision was made that B. B. would be transferred to Haverhill on September 18, 1998. At 5:00 p.m., the nursing staff at IHS West Palm Beach was notified that B. B. would be transferred. B. B.'s doctor's service was called for a discharge order. At 5:45 p.m. B. B was transferred to Haverhill by a transport service. The documents that were sent to Haverhill to IHS West Palm Beach did not indicate that B. B. was a wanderer or that he could be a candidate for elopement. Between five and six o'clock on the afternoon of September 18, 1998, S. B. telephoned Mr. Eason and advised him that she could not come to Haverhill that Friday because her mother was ill. Mr. Eason told her that he would not be back in the facility until the following Monday and suggested that she come the next day to complete the paperwork with the charge nurse. S. B. did not feel comfortable doing the paperwork with the charge nurse and told Mr. Eason that she would come on Monday. S. B. also asked Mr. Eason if he had spoken to Kit Johnson and whether he was aware that Ms. Johnson had told her that Haverhill was a locked-down facility. S. B. also asked Mr. Eason whether Haverhill could deal with her father's dementia. Eason told her that Haverhill could handle B. B. On B. B.'s first day of admission at Haverhill, September 18, 1998, he was agitated at being placed in a nursing facility. S. B. received a call from one of the nurses at Haverhill during the evening, telling her that B. B. did not know why he was at the nursing home, but that they would take care of him. A care plan was developed for B. B. on September 18, 1998, to deal with his agitation at being placed in a nursing facility. The care plan included the following approaches: Introduce yourself and knock on door prior to entering room. Orient to room and new environment. Encourage to express his feelings about nursing home placement. S/S to visit to promote conversation weekly. Activity to visit & (illegible) to activity of choice daily. Call bell within reach when in room. The care plan did not include measures to deal with B. B.'s wandering of which Mr. Eason had knowledge. On the morning of September 19, 1998, B. B. was alert and oriented to his surroundings. He told the nurse, "I really like this place, you should have seen the hell hole I came from." B. B. called his daughter on September 19, 1998, and told her that he was waiting for her and that he was ready. She explained that her mother was sick and she could not be left at that time. B. B. seemed to accept that explanation. On September 20, 1998, B. B. awoke about 4 a.m. and walked in the hall. He was angry and belligerent when his doctor visited him. He had yelled at other residents and kept asking for a sleeping pill all day. At the beginning of the 7 a.m. to 3 p.m. shift on September 21, 2000, B. B. was standing at the nurses' station and yelling at staff. He said, "I'm getting the hell out of here, they just can’t put me here and leave." He called his daughter and after hanging up, he became more agitated. Later in the morning, S. B. came to Haverhill to complete the admissions paperwork and to see her father. When she arrived B. B. was sitting on a bench outside the facility unsupervised. She took her father back inside the facility and went to find the admissions director so that she could complete the necessary paperwork. While she was completing the paperwork, she did not advise anyone that her father wandered or that he had eloped from Four Seasons. However, given the information that Kit Johnson had told Mr. Eason, he should have asked S. B. about any previous attempts by B. B. to leave home or other facilities and should have requested additional information from IHS West Palm Beach. According to the testimony at final hearing, by Monday, September 21, 1998, Mr. Eason claimed not to know that B. B. had been admitted on September 18 from IHS West Palm Beach. It can only be concluded that between Friday afternoon and Monday morning Mr. Eason had forgotten about B. B. After finishing the necessary admissions paperwork, S. B. went to her father's room to visit with him. When she was leaving the facility, her father thought that he was going to go with her and attempted to follow S. B. Haverhill staff had to intervene. B. B. became verbally and physically abusive, and the Administrator of Haverhill had to be called to assist. B. B. took a swing at the administrator. B. B. was taken back to his room, where he stayed. He told staff that they could not do anything for him and to leave his room. No one at staff notified S. B. of her father's episode. B. B.'s doctor was notified of B. B.'s behavior. The doctor prescribed anti-psychotic and anti-anxiety medications and ordered a psychological evaluation. Staff placed a call to the psychological services provider, requesting an evaluation. Both the Agency's and Haverhill's expert witnesses agreed that B. B.'s attempt to leave with his daughter was a catastrophic event, which is a clinical term used to describe a level of agitation of such sustained duration that it requires intervention by the caregiver. Haverhill did provide intervention by directing B. B. back to his room and informing the doctor. Haverhill had a policy and procedure to deal with residents who displayed mental difficulty. The policy and procedure provided: POLICY To protect the resident and other residents of the facility from harming themselves or others. To ensure that the resident receives appropriate treatment and services to correct the assessed problem. PROCEDURE When a resident exhibits behavior such as trying to elope, aggressive behavior, speaking of suicide or other behaviors relating to signs of distress or depression, nursing is to: calm resident close monitoring of resident call physician call family psychological services complete documentation of incident, and interventions and responses notify social services notify Director of Nursing Haverhill did not notify S. B. of the catastrophic event and did not closely monitor as called for in its policy and procedure. On September 22, 1998, Haverhill developed a care plan to deal with B. B.'s verbal and physical abuse to staff and residents. The care plan included the following: Redirect him when he becomes aggressive. Psy consult per MD order. Medicate per doctor order. Provide quiet area to promote conversations regarding his concerns. On September 22, 1998, B. B. continued to be noticeably anxious and angry and paced the floor. He made a telephone call, and after the call, he slammed his fist on the nurses' desk and expressed anger. He was redirected to his room. His new medication was begun at 9 a.m. By 1 p.m., B. B. was calmer, walking in the hallway to the nurses station and saying, "Hi" to staff when approached. Later in the day, B. B. became drowsy and slightly unsteady on his feet. He was redirected to his room. A care plan was developed to deal with the side effects of his new medications. No one arrived to do a psychological evaluation on B. B. on September 22, 1998. The provider was again called and asked to send someone. S. B. visited B. B. on September 23, 1998. B. B. told her that he was ready to go home. She left the facility around 3 or 4 o'clock in the afternoon. According to B. B.'s roommate, B. B. went to bed around 4 p.m. Around 5 p.m., B. B. was up and his gait was unsteady. The doctor was notified of the side effects of the new medications on September 23, 1998. The doctor ordered Haverhill to withhold B. B.'s scheduled dose of Ativan. As of 6:15 p.m. on September 23, no one had shown up to perform a psychological evaluation. No nurses' notes or social service progress notes indicate that anyone came on September 23 to perform a mental evaluation of B. B. The social services progress notes indicate that on September 23, B. B. was calm and had no behaviors during the day. B. B. asked for snacks around 8 p.m. The charge nurse who admitted him, stated that at 11 p.m., he was lying on his bed fully dressed. D. D., another resident in the building, stated that he saw B. B. up around 1:30 or 2:30 a.m. on September 24, wrapped in a blanket and asking if his daughter had been by to see him. B. B. went back to bed and got up between 3:00 and 3:30 a.m. to get coffee. He walked to the nurses station and was told by staff that it was too early and that he should go back to his room. B. B went back to bed. D. D. saw B. B. get up around 4:45 a.m. and get dressed. At 5:10 a.m., while doing bed checks, the nursing staff noted that B. B. was missing and began a search for him. He could not be found, leading to the conclusion that he had eloped. On November 2, 1998, B. B.'s body was found in a drainage ditch a quarter of a mile from the facility. On October 27, 1998, Haverhill received a report on B. B.'s mental status examination from the psychological services provider. The report was typed except for the signatures and the day on the date. The date of the interview was listed as 09/23/98 with the "23" handwritten. The Agency contends that Haverhill did not provide adequate supervision to B. B. because it did not have sufficient staff on hand when B. B. eloped from the facility on September 24, 1999. The Agency bases this contention on its interpretation of a staffing summary which was prepared by Haverhill that indicated that Haverhill did not have sufficient certified nursing assistant hours to meet minimum state standards on September 24. The summary indicates the number of certified nursing assistant and licensed nursing hours hired at Haverhill for each day between September 20 and 28, 1998. Each 24-hour period represented on the summary begins with the 7:00 a.m. shift on the designated day and runs until the 7:00 a.m. shift on the following day. Accordingly, the staffing levels reflected for September 24, 1998, would be those which began at 7:00 a.m. on that day and ran until 7:00 a.m. on September 25, 1998. B. B. eloped from Haverhill around 5:00 a.m. on September 24, 1998. Since his elopement occurred prior to 7:00 a.m. on September 24, the staffing levels reflected in the summary on September 23, 1998, would cover the time period during which B. B. eloped. On September 23, Haverhill exceeded minimum state requirements for certified nursing assistants by 46.8 hours and for licensed nurses by 40.1 hours. Although Haverhill identified a care plan for B. B. upon admission, Haverhill failed to implement the care plan. Specifically no one assisted in diverting B. B.'s focus on wanting to leave the facility. No evidence was provided that organized activities oriented to meet B. B.'s needs were provided. According to the Agency's expert, B. B.'s frequent ambulating in the halls, as documented in the nurses' notes, demonstrated his lack of participation in organized activities. The Agency charges Haverhill with a violation of 42 CFR Sections 483.35(c)(1) and (2) for failure to treat pressure sores on Residents 1 and 16. The deficiency was identified as Tag F314, determined to be a Class II deficiency, and determined to have a severity rating of "G." Resident 1 was a 75-year-old female admitted to Haverhill's facility on October 6, 1999. She was diagnosed with end-stage Alzheimer's disease. Prior to admission, she had a feeding tube inserted. Upon admission Resident 1 was self-ambulating, and the nurses' notes reflect that Resident was a wanderer and walked on a regular basis. She had no skin breakdown when admitted, but she was assessed at a high risk for pressure sores, due to bowel incontinence. A pressure sore is a lesion that is caused by unrelieved pressure to an area and results in damage to underlying tissue. A care plan was developed on October 6, 1999, to address Resident 1's risk for pressure sores. The care plan included the use of pressure relieving chairs and beds; turning and repositioning with no specific times listed; ulcer care; use of cleansing agent and water to clean skin whenever soiled, and treatment of dry skin with moisturizer. According to the physician's orders on October 6, 1999, Resident 1 was to have a skin assessment with showers weekly, and a skin barrier with lantiseptic ointment applied to her buttocks every shift or three times a day, and intermittently as needed. Another care plan was developed on October 26, 1999, after a comprehensive assessment had been completed. The October 26 care plan did not include turning and repositioning. The standard of care to prevent pressure sores from developing includes regular turning and repositioning every two hours, keeping the skin clean and dry, and adequate nutrition and hydration. When a resident is ambulatory and can move herself in bed, turning and repositioning is less of a factor. According to the nurses' notes for Resident 1, she slept most of the day on October 25, 1999, and continued to be drowsy on October 26. The doctor reduced her dosage of Haldol. Resident 1 was terminally ill and was placed on hospice service on October 27, 1999. On October 29, 1999, she was drowsy but alert and ambulatory. She was walking on October 31, 1999, with a slow, steady gait. On November 2, 1999, Resident 1 had no open sores. On November 8, 1999, the treatment notes indicate no open sores on Resident 1, but there was some redness in the perianal area, which was treated with a cream. On November 8, 1999, the nurses' notes indicate that Resident 1 was ambulating with some difficulty. She was kept clean and dry, and her skin was intact. On November 10, 1999, it was noted that she was alert and turning aimlessly in bed. On November 10, 1999, she showered, and the nurses notes indicated no areas of skin breakdown. On November 14, 1999, Resident 1 was ambulating and was able to turn self. On November 16, 1999, there were no open areas on Resident 1, but she developed hives all over her body. She was given Benedryl for the rash. On November 17, 1999, Resident slept most of the day. On November 23, 1999, there were no open areas on Resident 1. She was lethargic and was turned and repositioned. On November 24 and 25, 1999, Resident 1 remained lethargic and was turned and repositioned. On November 26, 1999, she was lethargic all day. She continued to be lethargic on November 27, 1999. She was kept clean and dry and was turned and repositioned. The nurses' notes indicate that on November 30 and December 3, 1999, Resident 1 continued to be lethargic. The nurses' notes indicate that she was turned and repositioned on December 3, 1999. On December 3, 1999, a nurse noted a pressure sore on Resident 1's coccyx, measuring .5 x .25 centimeters. The initial information regarding the treatment and identification of the pressure sore was documented on the treatment sheet of another patient with a similar name. The error was corrected on December 6, 1999. No evidence showed that the incorrect charting resulted in a failure to treat the pressure sore. The pressure sore was a stage II pressure sore, which means either a blister or a shallow open area in which only the epidermis is affected. The area was cleansed and duoderm was applied. Pressure sores are staged to standardize descriptions. Staging is not a means to describe a progression from one stage to the next. Sores can appear at any stage from a I to a IV. On December 5, 1999, the pressure sore was assessed. The skin was broken, and the area was red and dry. The area was cleaned, and duoderm was applied. Resident 1 was lethargic and unresponsive to verbal stimulus. She was turned and repositioned. During a survey on December 6, 1999, a surveyor from the Agency observed the pressure sore, and described it as a shallow crater over a bony prominence. The nurses' notes on December 6, 1999, at 6:00 a.m., 12:00 p.m., and 7 p.m. indicate that Resident 1 was turned and repositioned. On December 6, 1999, two surveyors from the agency were at Haverhill. According to one surveyor numerous staff went into Resident 1's room from 6:00 a.m. to 9:00 a.m., but when she went into the room Resident 1 did not appear to have been repositioned. However, the other surveyor said that no staff went into Resident 1's room during the same time period. Between 6:00 a.m. and 9:00 a.m. on December 6, 1999, Resident 1 was turned and repositioned. On December 7, 1999, cream was applied to Resident 1's buttock area, and she was turned and repositioned. She was repositioned on December 8 and 9, 1999. By December 10, 1999, the pressure sore had closed and was healing well. On December 17, 1999, it was noted that the pressure sore was healing well and was pink in color. The Agency had cited Haverhill for not adding zinc or vitamin C to Resident 1's nutrition after the pressure sore was noted on December 3, 1999. Haverhill's dietician evaluated Resident 1 on December 5, 1999, to determine whether additional nutrition was necessary. After a thorough review of the resident's condition and history, including Resident 1's husband's concerns, the dietician specifically considered the addition of supplements and concluded that Vitamin C and zinc might be added "if wound not responding to [treatment] x 2 wks." Standard guidelines suggest adding these supplements only for more serious wound concerns. Zinc and Vitamin C did not have to be added to Resident 1's nutrition. The agency alleged that Haverhill should have done a significant change assessment based on Resident 1's decreased physical capabilities that began in October 25, 1999, her bedfast condition since November 22, 1999, and her nutritional deficits since November 22, 2000. The federal guidelines concerning significant change in status assessments are contained in HCFA's RAI Version 2.0 Manual. The guidelines provide: A 'significant change' is defined as a major change in the resident's status that Is not self-limiting; Impacts on more than one area of the resident's health status; and Requires interdisciplinary review or revision of the care plan. A condition is defined as 'self- limiting' when the condition will normally resolve itself without further intervention or by staff implementing standard disease related clinical interventions. * * * The amount of time that would be appropriate for a facility to monitor a resident depends on the clinical situation and severity of symptoms experienced by the resident. Generally, if the condition has not resolved itself within approximately 2 weeks, staff should begin a comprehensive RAI assessment. This time frame is not meant to be prescriptive, but rather should be driven by clinical judgment and the resident's needs. * * * In an end stage disease status, a full reassessment is optional, depending on a clinical determination of whether the resident would benefit from it. The facility is still responsible for providing necessary care and services to assist the resident to achieve his or her highest practicable well- being. However, provided that the facility identifies and responds to problems and needs associated with the terminal condition, a comprehensive reassessment is not necessarily indicated. A significant change assessment was not done. Based on the federal guidelines, it was discretionary for Haverhill to do a significant change assessment because of Resident 1's terminal illness. There was no evidence to link the failure to complete a significant change assessment and the actual care given to Resident 1. Nurses' notes reflect that staff was very aware of Resident 1's condition and took measures to address it. There are frequent notes, which established discussions with the concerned husband, being turned and repositioned, being kept clean and dry, being fed, obtaining lab tests, and changing medications. Resident 1 did develop a pressure sore while at Haverhill, but the treatment and care that she was provided prior to the development of the pressure sore indicate that Haverhill did what it could to prevent the development of the pressure sore and that the development was unavoidable. After the pressure sore developed, Haverhill provided the necessary treatment to promote healing and prevent infection. Resident 16 was a 66-year-old, non-ambulatory female, who was admitted to Haverhill on August 4, 1999, from the hospital where she had undergone surgeries for both a pacemaker and a gastrostomy tube. She had an indwelling catheter and bowel incontinence. Resident 16 was totally dependent on staff for all activities of daily living. When she was admitted to Haverhill, Resident 16 had a stage II pressure sore on her left buttock. She was assessed as being a high risk for pressure sores. Her preliminary care plan developed on August 4, 1999, included turning and repositioning every two hours, weekly skin assessments, cleaning for incontinence, using barrier cream, and dressing the pressure sore as ordered. She was placed on a maxi-float mattress rather than a standard mattress. By August 11, the pressure sore was only pink and had completely healed by August 30, 1999. At 9:00 p.m. on August 20, 1999, it was noted that Resident 16 had a stage II, one centimeter-sized open area at her coccyx. The area was cleaned and dressed. The doctor was notified on August 21, 1999, about the pressure sore to the coccyx. He prescribed duoderm. It was also noted on August 21, 1999, that Resident 16's shoulder blades were red and scraped and needed to be monitored. Cream was applied to the shoulder blades. Resident 16 was kept in bed rather than a geri chair on August 22, 1999, so that she could be turned from side to side every two hours. Cream was applied to the shoulder blades, and the duoderm was intact to the coccyx. Haverhill's dietician described the pressure sore on the coccyx as a stage III, measuring 4.5 cm x 4.7 cm with 35 percent necrosis and 65 percent slough. On August 23, 1999, Resident 16 was sent to physical therapy for wound care, because the physical therapist had special training in this area. The physical therapist described the pressure sore area as having a hematoma and part of the wound being yellow and brown with inherent necrotic tissue. The pressure sore had no depth, the drainage was scant, and there was some breakthrough granulation. This description indicates that the wound was covered with possible necrotic tissue underneath. When the necrotic tissue was removed, such as the physical therapist did with mechanical debridement, an opening was revealed. After the wound was cleaned and debrided, it increased in size. On August 25 and 26, 1999, wound treatment was performed on the pressure sore area at the coccyx. The dietician notes indicate that the pressure sore continued to be a stage III on August 31, 1999, and measured 4.5 cm x 5 cm with 70 percent necrosis, 20 percent slough, and 10 percent granulation. Vitamin C and zinc support was ordered for Resident 16. On September 1, 1999, Resident 16 was placed on a different pressure reduction mattress. A wound culture was sent to the laboratory. By September 2, 1999, the wound had become infected. Antibiotics were administered beginning on September 3, 1999. Wound care treatment was also performed on September 3, 1999. On September 4, 1999, the dressing was changed to the pressure sore. The nurse noted that there was a dark circle on the inner side of the right heel. Heel protectors were put on Resident 16. Resident 16's care plan was revised on September 7, 1999, to change the turning and repositioning time to once every hour. On September 9, 1999, the nurse called the doctor regarding the pressure sore and requested that the wound care center be contacted for evaluation and treatment. A call was placed to the wound care center. On September 10, 1999, the wound care center called and stated they could not treat Resident 16 because of insurance coverage. The same day a call was placed to the hospital to see if Resident 16 could be treated there for wound care. On September 13, 1999, the hospital called and advised that Resident 16 could not be treated there because of insurance coverage. On September 14, 1999, Resident 16 was placed on an air mattress to help relieve the pressure. By September 16, 1999, according to the nurses' notes, the wound consisted of "much unhealthy and necrotic tissue with very foul odor and much purulent discharge." The dietician noted that the wound was still at a stage III. On September 17, 1999, the doctor ordered that Resident 16 be sent to the hospital emergency room for wound treatment and evaluation. At 1:00 p.m. on September 17, 1999, the nurses' notes indicate that complete care was given, including cleaning after an incontinent episode, dressing change, and turning. Resident 16 left for the emergency room by stretcher at 1:30 p.m. When she seen by the doctor at the hospital, he noted that the wound was contaminated with feces. Given the resident's incontinence, this is not an unexpected condition despite her having been cleaned just prior to leaving for the hospital. She could have had an incontinent episode on the way to the hospital or while waiting in the emergency room. No evidence was provided to establish that she was dirty when she left Haverhill. The doctors at the hospital described the pressure sore as a stage IV decubitus ulcer with a 12 to 14 centimeter diameter. The ulcer was grossly contaminated and would require cleaning over the next three to four days. Her laboratory tests showed that she also had a pseudomonas urinary tract infection. It was recommended that a diverting colostomy be considered for Resident 16 to keep "the fecal stream from continually bathing this area and giving rise to a chronic septic condition for the patient." Pseudomonas in the urine is indicative of contamination in the bladder. Such contamination could come from lying in the bed in stool or from improper cleaning related to Resident 16's indwelling catheter. In Resident 16's case, the stool was brought up around the catheter, which carried the bacteria to the bladder. Resident 16 was kept at the hospital from September 17 to September 25, 1999. Based on the dietician's notes, the pressure sore was a stage IV when Resident 16 returned from the hospital. On October 6, 1999, the resident's care plan was amended. On October 9, 1999, the pressure sore was still a stage IV and measured 4.0 x 5.0 x 2.2 cm with undermining. The nutritional assessment for November 15, 1999, showed that the pressure sore was a stage IV. On November 24, 1999, the pressure sore measured 2.8 x 2.2 x 1.5 cm with undermining. At the time of the Agency's survey on December 8, 1999, Resident 16's pressure sore on her coccyx was still a stage IV, and she had developed a pressure sore on her left heel. Turning and repositioning is important in preventing pressure sores. The standard nursing practice for turning and repositioning is a minimum of every two hours. Haverhill's policy for turning was every two hours. Resident 16's care plan showed that she was to be turned every two hours until September 7, 1999, when the care plan was amended to turning every hour. The standard nursing practice for charting records depends on the condition of the patient. Resident 16 should have been charted on every shift throughout the day, based on her high-risk status, her bedfast position, her existing pressure sore, the contractures of her lower extremities, and her medical history. Based on Haverhill's nursing notes, Resident 16 was turned and repositioned 656 times, or less than a third of the total number of times required, 2,320, by Resident 16's care plan between August 4 and December 7, 1999. Based on Haverhill's charting records, Resident 16 was turned and repositioned 356 times, or less than a sixth of the number of times required by the care plan between August 4 and December 7, 1999. Haverhill's records show that the number of times Resident 16 should have been turned and repositioned, consistent with Resident 16's care plan, was significantly higher than the actual number of times that Resident 16 was turned and repositioned. The Agency claims that Haverhill failed to do skin assessments according to physicians orders during the month of September, 1999. The physician ordered a skin assessment once a week with showers. The assessments were done according to the doctor's orders. During part of September, Resident 16 was in the hospital for wound treatment; therefore, Haverhill could not have done a skin assessment at that time. When Resident 16 returned from the hospital there were only five days left in the month; thus, another skin assessment was not due to be conducted in September. Haverhill failed to turn and reposition Resident 16 as required by her care plan. Resident did develop a pressure sore, which was not unavoidable. Haverhill did not provide treatment that would promote healing of the pressure sore due to Haverhill's failure to turn and reposition Resident 16 as required by her care plan.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Counts VIII and IX of the Administrative Complaint, upholding the conditional license for Petitioner effective October 14, 1998, through January 3, 1999, and December 8, 1999, through February 9, 2000. DONE AND ENTERED this 8th day of November, 2000, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 8th day of November, 2000. COPIES FURNISHED: R. Davis Thomas, Jr. Qualified Representative Donna H. Stinson, Esquire 215 South Monroe Street Suite 400 Tallahassee, Florida 32302 Tracy S. Cottle, Esquire Agency for Health Care Administration Regional Service Center Fort Knox Building 3, Suite 3231 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Agency Clerk 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
The Issue The issues in these cases are whether the Agency for Health Care Administration (AHCA or Agency) should discipline (including license revocation) Bayou Shores SNF, LLC, d/b/a Rehabilitation Center of St. Pete (Bayou Shores) for the statutory and rule violations alleged in the June 10, 2014, Administrative Complaint, and whether AHCA should renew the nursing home license held by Bayou Shores.
Findings Of Fact Bayou Shores is a 159-bed licensed nursing facility under the licensing authority of AHCA, located in Saint Petersburg, Florida. Bayou Shores was at all times material hereto required to comply with all applicable rules and statutes. Bayou Shores was built in the 1960s as a psychiatric hospital. In addition to long-term and short-term rehabilitation residents, Bayou Shores continues to treat psychiatric residents and other mental health residents. AHCA is the state regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes, and rules governing skilled nursing facilities, pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended) chapters 400, Part II, and 408, Part II, Florida Statutes, and Florida Administrative Code Chapter 59A-4. AHCA is responsible for conducting nursing homes surveys to determine compliance with Florida statutes and rules. AHCA completed surveys of Bayou Shores’ nursing home facility on or about February 10, 2014;5/ March 20, 2014; and July 11, 2014. Surveys may be classified as annual inspections or complaint investigations. Pursuant to section 400.23(8), Florida Statutes, AHCA must classify deficiencies according to their nature and scope when the criteria established under section 400.23(2) are not met. The classification of the deficiencies determines whether the licensure status of a nursing home is "standard" or "conditional" and the amount of the administrative fine that may be imposed, if any. AHCA surveyors cited deficiencies during the three surveys listed above (paragraph 4). Prior to the alleged events that prompted AHCA’s actions, Bayou Shores had promulgated policies or procedures for its operation. Specifically, Bayou Shores had policies or procedures in place governing: (Resident) code status, involving specific life-saving responses (regarding what services would be provided when or if an untoward event occurred, including a resident’s end of life decision); Abuse, neglect, exploitation, misappropriation of property; and Elopements. CODE STATUS Bayou Shores’ policy on code status orders and the response provided, in pertinent part, the following: Each resident will have the elected code status documented in their medical record within the Physician’s orders & on the state specific Advanced Directives form kept in the Advanced Directives section of the medical record. Bayou Shores’ procedure on code status orders and the response also provided that the “Physician & or Social Services/Clinical Team” would discuss with a “resident/patient or authorized responsible party” their wishes regarding a code status as it related to their current clinical condition. This discussion was to include an explanation of the term “'Do Not Resuscitate’ (DNR) and/or ‘Full Code.’” Bayou Shores personnel were to obtain a written order signed by the physician indicating which response the resident (or their legal representative) selected. In the event a resident was found unresponsive, the procedure provided for the following staff response: 3 Response: Upon finding a resident/patient unresponsive, call for help. Evaluate for heartbeat, respirations, & pulse. The respondent to the call for help will immediately overhead page a “CODE BLUE” & indicate the room number, or the location of the resident/patient & deliver the Medical Record & Emergency Cart to the location of the CODE BLUE. If heartbeat, respirations, & pulse cannot be identified, promptly verify Code Status - Respondent verifies Code Status by review of the resident’s/patient’s Medical Record. If Code Status is “DNR” – DO NOT initiate CPR (Notify Physician, Supervisor & Family). If Code Status includes CPR & respondent is CPR certified, BEGIN Cardio Pulmonary Resuscitation. If respondent is not CPR certified, STAY with the RESIDENT/PATIENT – Continue to summon assistance. The first CPR certified responder will initiate CPR. If code status is not designated, the resident is a FULL CODE & CPR will be initiated. A scribe will be designated to record activity related to the Code Blue using the “Code Blue Worksheet.” The certified respondent will continue CPR until: Relieved by EMS, relieved by another CPR certified respondent, &/or Physician orders to discontinue CPR. A staff member will be designated to notify the following person(s) upon initiation of CPR. EMS (911) Physician Family/Legal Representative * * * 5) Review DNR orders monthly & with change in condition and renew by Physician’s signature on monthly orders. (Emphasis supplied). Bayou Shores’ “Do Not Resuscitate Order” policy statement provides: Our facility will not use cardiopulmonary resuscitation and related emergency measures to maintain life functions on a resident when there is a Do Not Resuscitate Order in effect. Further, the DNR policy interpretation provides: Do not resuscitate order must be signed by the resident’s Attending Physician on the physician’s order sheet maintained in the resident’s medical record. A Do Not Resuscitate Order (DNRO) form must be completed and signed by the Attending Physician and resident (or resident’s legal surrogate, as permitted by State law) and placed in the front of the resident’s medical record. (Note: Use only State approved DNRO forms. If no State form is required use facility approved form.) Should the resident be transferred to the hospital, a photocopy of the DNRO form must be provided to the EMT personnel transporting the resident to the hospital. Do not resuscitate orders (DNRO) will remain in effect until the resident (or legal surrogate) provides the facility with a signed and dated request to end the DNR order. (Note: Verbal orders to cease the DNRO will be permitted when two (2) staff members witness such request. Both witnesses must have heard and both individuals must document such information on the physician’s order sheet. The Attending Physician must be informed of the resident’s request to cease the DNR order.) The Interdisciplinary Care Planning Team will review advance directives with the resident during quarterly care planning sessions to determine if the resident wishes to make changes in such directives. Inquiries concerning do not resuscitate orders/requests should be referred to the Administrator, Director of Nursing Services, or to the Social Services Director. Bayou Shores’ advance directives policy statement provides: “Advance Directives will be respected in accordance with state law and facility policy.” In pertinent part, the Advance Directives policy interpretation and implementation provides: * * * Information about whether or not the resident has executed an advance directive shall be displayed prominently in the medical record. In accordance with current OBRA definitions and guidelines governing advance directives, our facility has defined advanced directives as preferences regarding treatment options and include, but are not limited to: * * * b. Do Not Resuscitate – Indicates that, in case of respiratory or cardia failure, the resident, legal guardian, health care proxy, or representative (sponsor) has directed that no cardiopulmonary resuscitation (CPR) or other life-saving methods are to be used. * * * Changes or revocations of a directive must be submitted in writing to the Administrator. The Administrator may require new documents if changes are extensive. The Care Plan Team will be informed of such changes and/or revocations so that appropriate changes can be made in the resident assessment (MDS) and care plan. The Director of Nursing Services or designee will notify the Attending Physician of advance directives so that appropriate orders can be documented in the resident’s medical record and plan of care. (Emphasis supplied). A DNR order is an advance directive signed by a physician that nursing homes are required to honor. The DNR order is on a state-mandated form that is yellow/gold (“goldenrod”) in color. The DNR order is the only goldenrod form in a resident’s medical record/chart.6/ The medical record itself is kept at the nursing station. DNR Orders should be prominently placed in a resident’s medical record for easy access. When a resident is experiencing a life-threatening event, care-givers do not have the luxury of time to search a medical record or chart to determine whether the resident has a DNR order or not. Cardiopulmonary resuscitation should be started as soon as possible, provided the resident did not have a DNR order. Bayou Shores had a policy and procedure regarding DNR orders and the implementation of CPR in place prior to the February 2014 survey. The policy and procedure required that DNR orders be honored, and that each resident with a DNR order have the DNR order on the state-mandated goldenrod form in the "Advanced Directives" section of the resident’s medical record. ABUSE, NEGLECT, EXPLOTATION, AND MISAPPROPRIATION OF PROPERTY PREVENTION, PROTECTION AND RESPONSE POLICY AND PROCEDURES Bayou Shores’ “Abuse, Neglect, Exploitation, and Misappropriation of Property Prevention, Protection and Response” policy provided in pertinent part: Abuse, Neglect, Exploitation, and Misappropriation of Property, collectively known and referred to as ANE and as hereafter defined, will not be tolerated by anyone, including staff, patients, volunteers, family members or legal guardians, friends or any other individuals. The health center Administrator is responsible for assuring that patient safety, including freedom from risk of ANE, hold the highest priority. (Emphasis supplied). Bayou Shores’ definition of sexual abuse included the following: Sexual Abuse: includes but is not limited to, sexual harassment, sexual coercion, or sexual assault. (Emphasis supplied). Bayou Shores’ ANE prevention issues policies included in pertinent part: The center will provide supervision and support services designed to reduce the likelihood of abusive behaviors. Patients with needs and behaviors that might lead to conflict with staff or other patients will be identified by the Care Planning team, with interventions and follow through designed to minimize the risk of conflict. Bayou Shores’ procedure for prevention issues involving residents identified as having behaviors that might lead to conflict included, in part, the following: patients with a history of aggressive behaviors, patients who enter other residents rooms while wandering. * * * e. patients who require heavy nursing care or are totally dependent on nursing care will be considered as potential victims of abuse. Bayou Shores’ interventions designed to meet the needs of those residents identified as having behaviors that might lead to conflict included, in part: Identification of patients whose personal histories render them at risk for abusing other patients or staff, assessment of appropriate intervention strategies to prevent occurrences, Bayou Shores’ policy regarding ANE identification issues included the following: Any patient event that is reported to any staff by patient, family, other staff or any other person will be considered as possible ANE if it meets any of the following criteria: * * * f. Any complaint of sexual harassment, sexual coercion, or sexual assault. (Emphasis supplied). Bayou Shores’ ANE procedure included the following: Any and all staff observing or hearing about such events will report the event immediately to the ABUSE HOTLINE AT 1-800-962-2873. The event will also be reported immediately to the immediate supervisor, AND AT LEAST ONE OF THE FOLLOWING INDIDUALS, Social Worker (ANE Prevention Coordinator), Director of Nursing, or Administrator. Any and all employees are empowered to initiate immediate action as appropriate. (Emphasis supplied). Bayou Shores’ policies regarding ANE investigative issues provided the following: Any employee having either direct or indirect knowledge of any event that might constitute abuse must report the event promptly. * * * All events reported as possible ANE will be investigated to determine whether ANE did or did not take Place [sic]. Bayou Shores’ procedures regarding ANE investigative issues included the following: Any and all staff observing or hearing about such events must report the event immediately to the ANE Prevention Coordinator or Administrator. The event should also be reported immediately to the employee’s supervisor. All employees are encouraged and empowered to contact the ABUSE HOTLINE AT 1-800-962-2873. [sic] if they witness such event or have reasonable cause to suspect such an event has indeed occurred. THE ANE PREVENTION COORDINATOR will initiate investigative action. The Administrator of the center, the Director of Nurses and/or the Social Worker (ANE PREVENTION COORDINATOR) will be notified of the complaint and action being taken as soon as practicable. (Emphasis supplied). Bayou Shores’ policy regarding ANE reporting and response issues included the following: All allegations of possible ANE will be immediately reported to the Abuse Hotline and will be assessed to determine the direction of the investigation. Bayou Shores’ procedures regarding ANE reporting and response issues included the following: Any investigation of alleged abuse, neglect, or exploitation will be reported immediately to the Administrator and/or the ANE coordinator. It will also be reported to other officials, in accordance with State and Federal Law. THE IMMEDIATE REPORT All allegations of abuse, neglect, . . . must be reported immediately. This allegation must be reported to the Abuse Hotline (Adult Protective Services) within twenty-four hours whenever an allegation is made. The ANE Prevention Coordinator will also submit The Agency for Health Care Administration AHCA Federal Immediate/5-Day Report and send it to: Complaint Administration Unit Phone: 850-488-5514Fax: 850-488-6094 E-Mail: fedrep@ahca.myflorida.com THE REPORT OF INVESTIGATION (Five Day Report): The facility ANE Prevention Coordinator will send the result of facility investigations to the State Survey Agency within five working days of the incident. This will be completed using the same AHCA Federal/Five Day Report, and sending it to the Complaint investigation Unit as noted above. DESIGNATED REPORTERS: Shall immediately make a report to the State Survey Agency, by fax, e-mail, or telephone. All necessary corrective actions depending on the result of the investigation will be taken. Report any knowledge of actions by a court of law against any employee, which would indicate an employee is unfit for service as a nurse aide or other facility staff to the State nurse aide registry or other appropriated [sic] licensing authorities. Any report to Adult Protective Services will trigger an internal investigation following the protocol of the Untoward Events Policy and Procedure. (Emphasis supplied). Bayou Shores’ abuse investigations policy statement provides the following: All reports of resident abuse, . . . shall be promptly and thoroughly investigated by facility management. Bayou Shores’ abuse investigations interpretation and implementation provides, in pertinent part, the following: Should an incident or suspected incident of resident abuse, . . . be reported, the Administrator, or his/her designee, will appoint a member of management to investigate the alleged incident. The Administrator will provide any supporting documents relative to the alleged incident to the person in charge of the investigation. The individual conducting the investigation will, as a minimum: Review the completed documentation forms; Review the resident’s medical record to determine events leading up to the incident; Interview the person(s) reporting the incident; Interview any witnesses to the incident; Interview the resident (as medically appropriate); Interview the resident’s Attending Physician as needed to determine the resident’s current level of cognitive function and medical condition; Interview staff members (on all shifts) who have had contact with the resident during the period of the allege incident; Interview the resident’s roommate, family members, and visitors; Interview other residents to whom the accused employee provides care or services; and Review all events leading up to the alleged incident. The following guidelines will be used when conducting interviews; Each interview will be conducted separately and in a private location; The purpose and confidentiality of the interview will be explained thoroughly to each person involved in the interview process; and Should a person disclose information that may be self-incriminating, that individual will be informed of his/her rights to terminate the interview until such time as his/her rights are protected (e.g., representation by legal counsel). Witness reports will be obtained in writing. Witnesses will be required to sign and date such reports. The individual in charge of the abuse investigation will notify the ombudsman that an abuse investigation is being conducted. The ombudsman will be invited to participate in the review process. Should the ombudsman decline the invitation to participate in the investigation, that information will be noted in the investigation record. The ombudsman will be notified of the results of the investigation as well as any corrective measures taken. * * * The individual in charge of the investigation will consult daily with the Administrator concerning the progress/findings of the investigation. The Administrator will keep the resident and his/her representative (sponsor) informed of the progress of the investigation. The results of the investigation will be recorded on approved documentation forms. The investigator will give a copy of the completed documentation to the Administrator within working days of the reported incident. The Administrator will inform the resident and his/her representative (sponsor) of the results of the investigation and corrective action taken within days of the completion of the investigation. The Administrator will provide a written report of the results of all abuse investigations and appropriate action taken to the state survey and certification agency, the local police department, the ombudsman, and others as may be required by state or local laws, within five (5) working days of the reported incident. Should the investigation reveal that a false report was made/filed, the investigation will cease. Residents, family members, ombudsmen, state agencies, etc., will be notified of the findings. (Note: Disciplinary actions concerning the filing of false reports by employees are outlined in our facility’s personnel policy manual.) Inquiries concerning abuse reporting and investigation should be referred to the Administrator or to the Director of Nursing Services. Bayou Shores’ reporting abuse to facility management policy statement provides the following: It is the responsibility of our employees, facility consultants, Attending Physicians, family members visitors etc., to promptly report any incident or suspected incident of . . . resident abuse . . . to facility management. Bayou Shores’ reporting abuse to facility management policy interpretation and implementation provides the following: Our facility does not condone resident abuse by anyone, including staff members, . . . other residents, friends, or other individuals. To help with recognition of incidents of abuse, the following definitions of abuse are provided: * * * c. Sexual abuse is defined as, but not limited to, sexual harassment, sexual coercion, or sexual assault. All personnel, residents, family members, visitors, etc., are encouraged to report incidents of resident abuse or suspected incidents of abuse. Such reports may be made without fear of retaliation from the facility or its staff. Employees, facility consultants and /or Attending Physicians must immediately report any suspected abuse or incidents of abuse to the Director of Nursing Services. In the absence of the Director of Nursing Services such reports may be made to the Nurse Supervisor on duty. Any individual observing an incident of resident abuse or suspecting resident abuse must immediately report such incident to the Administrator or Director of Nursing Services. The following information should be reported: The name(s) of the resident(s) to which the abuse or suspected abuse occurred; The date and time that the incident occurred; Where the incident took place; The name(s) of the person(s) allegedly committing the incident, if known; The name(s) of any witnesses to the incident; The type of abuse that was committed (i.e., verbal, physical, . . . sexual, . . .); and Any other information that may be requested by management. Any staff member or person affiliated with this facility who . . . believes that a resident has been a victim of . . . abuse, . . . shall immediately report, or cause a report to be made of, the . . . offense. Failure to report such an incident may result in legal/criminal action being filed against the individual(s) withholding such information. * * * The Administrator or Director of Nursing Services must be immediately notified of suspected abuse or incidents of abuse. If such incidents occur or are discovered after hours, the Administrator and Director of Nursing Services must be called at home or must be paged and informed of such incident. When an incident of resident abuse is suspected or confirmed, the incident must be immediately reported to facility management regardless of the time lapse since the incident occurred. Reporting procedures should be followed as outlined in this policy. Upon receiving reports of . . . sexual abuse, a licensed nurse or physician shall immediately examine the resident. Findings of the examination must be recorded in the resident’s medical record. (Note: If sexual abuse is suspected, DO NOT bathe the resident or wash the resident’s clothing or linen. Do not take items from the area in which the incident occurred. Call the police immediately.) (Emphasis supplied). C. ELOPEMENT A/K/A EXIT SEEKING Bayou Shores’ elopement policy statement provides the following: Staff shall investigate and report all cases of missing residents. Bayou Shores’ elopement policy interpretation and implementation provides the following: 1. Staff shall promptly report any resident who tries to leave the premises or is suspected of being missing to the Charge Nurse or Director of Nursing. * * * If an employee discovers that a resident is missing from the facility, he/she shall: Determine if the resident is out on an authorized leave or pass; If the resident was not authorized to leave, initiate a search of the building(s) and premises; If the resident is not located, notify the Administrator and the Director of Nursing Services, the resident’s legal representative (sponsor), the Attending Physician, law enforcement officials, and (as necessary) volunteer agencies (i.e., Emergency Management, Rescue Squads, etc.); Provide search teams with resident identification information; and Initiate an extensive search of the surrounding area. When the resident returns to the facility, the Director of Nursing Services or Charge Nurse shall: Examine the resident for injuries; Contact the Attending Physician and report findings and conditions of the resident; Notify the resident’s legal representative (sponsor); Notify search teams that the resident has been located; Complete and file an incident report; and Document relevant information in the resident’s medical record. FEBRUARY 2014 SURVEY A patient has the right to choose what kind of medical treatment he or she receives, including whether or not to be resuscitated. At Bayou Shores there may be multiple locations in a resident’s medical record for physician orders regarding a resident’s DNR status. A physician’s DNR order should be in the resident’s medical record. When a resident is transported from a facility to another health care facility, the goldenrod form is included with the transferring documentation. If there is not a DNR, a full resuscitation effort would be undertaken. In late January, early February 2014, AHCA conducted Bayou Shores’ annual re-licensure survey. During the survey, Bayou Shores identified 24 residents who selected the DNR status as their end-of-life choice. Of those 24 residents, residents numbered 35,7/ 54 and 109, did not have a completed or current “Do Not Resuscitate Order” in their medical records maintained by Bayou Shores.8/ As the medical director for Bayou Shores, Dr. Saba completed new DNR orders for patients during or following the February survey. In one instance, a particular DNR order did not have a signature of the resident or the representative of the resident, confirming the DNR status. Without that signature, the DNR order was invalid. In another instance, a verbal authorization was noted on the DNR forms, which such is not sufficient to control a DNR status. A medication administration record (MAR) is not an order; however, it should reflect orders. In one instance, a resident’s MAR reflected a full code status, when the resident had a DNR order in place. During the survey, Bayou Shores was in the midst of changing its computer systems and pharmacies. At the end of each month, orders for the upcoming month were produced by the pharmacy, and inserted into each resident’s medical record. Bayou Shores’ staff routinely reviewed each chart to ensure the accuracy of the information contained therein. Additionally, each nurse’s station was given a list of those residents who elected a DNR status over a full-code status. Conflicting critical information could have significant life or death consequences. The administration of cardio- pulmonary resuscitation (CPR) to a resident who has decided to forgo medical care could cause serious physical or psychological injuries. As the February survey progressed, and Bayou Shores was made aware of the DNR order discrepancies, staff contacted residents or residents’ legal guardians to secure signatures on DNR orders so that resident’s last wishes would be current and correct. Bayou Shores had a redundant system in place in an effort to ensure that a resident’s last wishes were honored; however, the systems failed. MARCH 2014 SURVEY On March 20, 2014, AHCA conducted a complaint survey and a follow-up survey to the February 2014 survey. During the March 2014 survey, Janice Kicklighter served as the ANE prevention coordinator for Bayou Shores. On February 13, 2014,9/ Resident BJ was admitted to Bayou Shores from another health care facility. Sometime after BJ was admitted, paperwork indicating BJ’s history as a sex offender was provided to Bayou Shores. Exactly when this information was provided and to whom is unclear. Once BJ was assigned to a floor, CNA Daniels was assigned to assist BJ, and tasked to give BJ a shower. CNA Daniels observed that BJ was unable to transfer from his bed to the wheelchair without assistance; however, CNA Daniels, with assistance, was able to transfer him, and took him to the shower via a wheelchair. It is unclear if CNA Daniels shared his observation with any other Bayou Shores staff. Several hours after BJ’s admission, Mr. Thompson, Bayou Shores’ then administrator, was informed that BJ had been admitted. Mr. Thompson conferred with the director of nursing (DON) and the director of therapy (director). The director immediately assessed BJ that evening. The director then advised Mr. Thompson and the DON that her initial contact with BJ was less than satisfactory. BJ declined to cooperate in the assessment, and the director advised Mr. Thompson and the DON that BJ could not get out of bed without assistance. Mr. Thompson, the DON and the director did not provide any further care instructions or directions to Bayou Shores staff regarding BJ’s care or stay at that time. A failure to cooperate does not ensure safety for either BJ or other residents. The day after his admission, BJ was assessed by a psychiatrist. Thereafter, Mr. Thompson notified nearby schools and BJ’s roommate (roommate) that BJ was a sexual offender. Shortly after his conversation with the roommate, Mr. Thompson directed that a “one-on-one” be established with BJ, which means a staff member was to be with BJ at all times. BJ was evaluated again and removed from the facility. Bayou Shores did not immediately implement its policy and procedures to ensure its residents were free from the risk of ANE. Hearsay testimony was rampant in this case. Mr. Thompson testified that he spoke with BJ’s roommate about an alleged sexual advance. However, the lack of direct testimony from the alleged victim (or other direct witness) fails to support the hearsay testimony and thus there is no credible evidence needed to support a direct sexually aggressive act. Rather, the fact that Mr. Thompson claims that he was made aware of the alleged sexual attempt, yet failed to institute any of Bayou Shores policies to investigate or assure resident safety is the violation. JULY 2014 COMPLAINT SURVEY In June 2015, Resident JN left the second floor at Bayou Shores without any staff noticing. A complaint was filed. At the time of the June 2014 incident (the basis for the July Survey), Bayou Shores’ second floor was a limited access floor secured through a key system. Some residents on the second floor had medical, psychiatric, cognitive or dementia (Alzheimer) issues, while other residents choose to live there. There are two elevators that service the second floor; one, close to the nurses’ station, and the second, towards the back of the floor. There was no direct line of sight to the nurses’ station from either elevator. To gain access to the second floor, a visitor obtained an elevator key from the lobby receptionist, inserted the key into the elevator portal which brought the elevator to the lobby, the elevator doors opened, the visitor entered the elevator, traveled to the second floor, exited the elevator, and the elevator doors closed. To leave the floor, the visitor would use the same system in reverse. At the time of the June incident, visitors could come and go to the second floor unescorted. Additionally, Bayou Shores had video surveillance capabilities in the elevator area, but no staff member was assigned to monitor either elevator. Mr. Selleck, Advanced Center’s administrator, sought JN’s placement at Bayou Shores because he thought Bayou Shores offered a more secure environment than Advanced Center. Advanced Center was an unlocked facility and the only precaution it had to thwart exit-seeking behavior was by using a Wander Guard.10/ JN was admitted to Bayou Shores on Friday evening, June 20, 2014, from Advanced Center. Based upon JN’s admitting documentation, Bayou Shores knew or should have known of JN’s exit-seeking behavior. JN slept through his first night at Bayou Shores without incident. On June 21, his first full day at Bayou Shores, JN had breakfast, walked around the second floor, spoke with staff on the second floor and had lunch. At a time unknown, on June 21, JN left the second floor and exited the Bayou Shores facility. JN did not tell staff that he was leaving or where he was going. Upon discovering that JN was missing, Bayou Shores’ staff thoroughly searched the second floor. When JN was not found there, the other floors were also searched along with the smoking patio. JN was not found on Bayou Shores’ property. Thereafter, Bayou Shores’ staff went outside the facility and located JN at a nearby bus stop. The exact length of time that JN was outside Bayou Shores’ property remains unknown. Staff routinely checks on residents. However, there was no direct testimony as to when JN left the second floor; just that he went missing. Staff instituted the policy and procedure to locate JN, and did so, but failed to undertake any investigation to determine how JN left Bayou Shores without any staff noticing. NOTICE OF INTENT TO DENY AHCA’s Notice was issued on January 15, 2015. Bayou Shores was cited for alleged Class I deficient practices in each of the three conducted surveys: failure to have end-of-life decisions as reflected in a signed DNR order; failure to safe- guard residents from a sexual offender; and failure to prevent a resident from leaving undetected and wandering outside the facility.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order revoking Bayou Shores license to operate a nursing home; and denying its application for licensure renewal. DONE AND ENTERED this 21st day of July, 2016, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 2016.
The Issue Whether Petitioner Hospice of Palm Beach County, Inc. (Hospice) is entitled to a certificate of need (CON) from the Department of Health and Rehabilitative Services, Respondent, (HRS) in CON Action No. 3702 for a home health agency in Palm Beach County and the District IX service area?
Findings Of Fact Hospice provides special interdisciplinary services, including medical, psychological, spiritual, counseling and volunteer services, for persons in the terminal stages of illness. Hospice is licensed by HRS as a hospice under Chapter 400, Part V, Florida Statutes. Hospice has been qualified by the United States Health Care Financing Administration for participation in the Medicare hospice program. See Part 418, 42 Code of Federal Regulations. Hospice was the first hospice program in Florida to be accredited by the Joint Commission on the Accreditation of Hospitals (JCAH) as a hospice. JCAH accreditation includes approval of the home care component of Hospice's service. HRS has approved issuance of a certificate of need (CON No. 3693) for the establishment by Hospice of its own 24-bed freestanding inpatient facility. Hospice's inpatient facility will be the first free- standing hospice facility in Florida. Hospice's present service area is within Palm Beach County. Hospice's service area reaches from the southern border of Boynton Beach in Palm Beach County north to the Martin County line. Hospice's service area also extends west within the County to include service to Belle Glade, a multi-ethnic rural community. Approximately 25 percent of Hospice's patients are medically indigent, with little or no ability to pay for care. Over 28 percent of Hospice's patients in fiscal 1985 were members of ethnic minorities. Hospice was one of five applicants in its "batching" cycle seeking a certificate of need to establish a home health agency within local health District IX. The others were Palm Beach Gardens Home Health Agency (CON #3699), MEA (CON #3700), Coastal Health Corporation (CON #3701) and Medical Personnel Pool of Treasure Coast, Inc. (CON #3706). (A sixth applicant, Medical Personnel Pool of Palm Beach, Inc., CON #3698, was granted a certificate in an earlier cycle and not considered by HRS in this batch.) By letter dated June 14, 1985, HRS indicated that it had determined to deny Hospice a certificate of need to establish a home health agency in Palm Beach County. Hospice's substantial interests are affected by HRS' determination of denial. Section 400.601(3), Florida Statutes (1985), requires Hospice to provide care to terminally ill patients regardless of ability to pay, and to make such care available 24 hours a day, 7 days a week. Unless Hospice receives a certificate of need to establish a home health agency, it is ineligible for licensing by HRS under Chapter 400, Part III, as a home health agency and corresponding certification as a Medicare home health service provider. See § 400.462(2), Fla. Stat. (1985). Without a certificate of need for home health care, Hospice's financial ability to serve its hospice patients is not as great as it might be if it held such a CON. Without certification as a home health agency, Hospice cannot presently collect any reimbursement for home health care of medically indigent Medicaid patients. Hospice often experiences difficulty in collecting even private insurance payments for home health care of patients with such insurance. Hospice will suffer injury in fact as a result of HRS' determination and its interests are among those regulated by this action. Hospice filed a timely petition for a Section 120.57 administrative proceeding concerning HRS' decision on CON Action 3702. Prior to the decision in Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, 447 So.2d 361 (Fla. 1st DCA 1984), HRS followed a rule generally precluding the issuance of a certificate of need for a new home health agency until the average daily census of each existing home health agency within the same service area had reached 300 patients. This rule was known as the "Rule of 300." In Johnson and Johnson, supra, the First District Court of Appeal struck the "Rule of 300" as arbitrary and inconsistent with Section 381.494(6)(c), Florida Statutes, which lists numerous criteria for evaluation of CON applications. In particular, the Court noted, the "Rule of 300" did not allow new agencies "where existing agencies are able but unwilling to provide services of a particular type or for a particular class of patients." 447 So.2d at 362. After the "Rule of 300" was struck, a statewide task force was created to develop new criteria to evaluate CON applications for new home health agencies. The statewide association of hospices, Florida Hospices, Inc., attempted to participate in the development of new criteria, but did not participate in this process. On April 5, 1985, HRS proposed new rule criteria for home health agency evaluations, which were the subject of a proposed rule challenge in September 1985 before the Division of Administrative Hearings. This proposed rule was struck down as invalid on March 12, 1986. These new criteria were proposed for use in addition to other relevant statutory and applicable rule criteria." In acting on the five CON applications in Hospice's "batch," HRS applied its invalidated proposed rule criteria and determined that within District IX as a whole (which includes Indian River, Martin, Okeechobee, St. Lucie and Palm Beach Counties), no new home health agencies were needed. However, in its analysis of the five applications in this batching cycle, HRS also stated that the District IX Local Health Council had indicated that Palm Beach County should be considered a separate subdistrict for home health agency evaluation. Although it found no need for new home health agencies in District IX as a whole in its analysis of this batching cycle, HRS, using its own newly proposed rules, found an existing need for two new home health agencies in Palm Beach County. HRS stated in its June 14, 1985, letter that Hospice's application was denied for the following reason: Use of the methodology developed by the special statewide work group to determine the need for home health agencies in District IX shows no numeric need for additional agencies in this district. HRS has determined for purposes of this proceeding that the following need exists in District IX for home health agencies, indicating a net need of five new agencies in District IX and a net need in Palm Beach County for five new agencies: Application Submittal Date: 12/84 Planning Horizon: 7/86 District 9 1986 (July) population: 65+ = 257,346 District 9 1986 (July) population: <65 = 809,845 1. 257,346 x .0578 = 14,875 Projected use for 65+ population 2. 809,845 x .00058 = 470 Projected use for <65 population 3. (14,875 + 470) x 33.3 = 510,989 Projected visits 7/86 4. 9,000 + (510,989 x 270) - 24,330 5. 410,989 9,000 ? 21,000 = 24 Agencies needed in District 9 for 7/86 24 Agencies - 19 licensed and approved = 5 Agencies needed in District 9 Subdistrict Allocation: Need: Indian River Projected 2 Existing 1 Net 1 Martin 2 2 0 Okeechobee 0 1 (1) Palm Beach 18 13 5 St. Lucie 2 2 0 This need is related solely to the planning horizon of July 1, 1986 established by HRS for Hospice's CON batch and other home health applications filed before the end of 1984. This need is not related to the later planning horizons applicable to District IX home health agency CON applications filed after 1984. Therefore, applicants in batches following Hospice's, which was the last batch submitted in 1984, are not substantially affected by this determination of need. For the purposes of this hearing, there are only two (2) denials by HRS of certificates of need for home health agencies in District IX and proposing service in Palm Beach County in CON batches prior to Hospice's (Joseph Morse Geriatric Center, CON Action No. 3621; A Professional Nurse, CON Action No. 3492) that have been challenged in administrative proceedings and are still pending without Final Order in those proceedings. Thus, Hospice's CON application as a home health agency is, in the worst case, third in line for licensure as a home health agency in District IX, without regard to the special circumstances of Hospice's case and assuming these denials by HRS are reversed in final agency action. Since there is a need for more than 3 new home health agencies in District IX and Palm Beach County based on the planning horizon applicable to Hospice's batch and no other valid request is pending in Hospice's batch, there is a numeric need for granting a CON to Hospice as a home health agency. There is a special need for access within Hospice's actual service area in Palm Beach County to home health services for the terminally ill, which services are provided by a hospice as opposed to existing or other proposed traditional home health agencies. There is additional need for access by the medically indigent to home health services within Hospice's service area in Palm Beach County, and within Palm Beach County in general. The 1985 District IX Hospice Services Plan provides that hospices generally should be licensed as a special type of home health agency. Of all pending applicants in this and the immediately prior batching cycles since 1984 seeking a certificate of need to provide home health services in Palm Beach County, Hospice is committed to providing the greatest percentage of its services for Medicaid and other medically indigent patients, in accordance with the State Health Plan. Hospice, due to its existing and proposed provision of home health services to the medically indigent, its service in Belle Glade, and its service to AIDS patients, as well as its services to the elderly, serves the need for care of low-income persons, medically underserved groups and the elderly. Hospice can provide higher quality of home health care to the terminally ill in its service area than any other existing home health provider or current applicant for a certificate of need to provide home health services in Palm Beach County. Hospice offers a new type of home health service within its service area for terminally ill patients and their families, including a special pediatric program for children with irreversible diseases. This type of service is an alternative to inpatient care, nursing home and traditional home health services. The applicant home health agencies affiliated with hospitals in District IX in Hospice's batching cycle have not shown that they can achieve greater economies or improvements of service than Hospice. Hospice provides the following research and health educational facilities: a) rotational internships for fourth- year medical students at the University of Miami Medical School; training for R. N. candidates at Florida Atlantic University; research support service to the Tropical Disease Center and Palm Beach County Public Health Department through Hospice's care for AIDS patients in the Belle Glade area; d) training for graduate students in psychology at Florida Atlantic University; e) training for seminary students at St. Vincent's Seminary in Boynton Beach; f) training for candidates for master's degrees in social work from Florida State University; and g) designation as second research and training site by the International Hospice Institute, an international research and professional education accrediting institution. No other home health agency in Palm Beach County provides or has proposed to provide the research or educational facilities referenced in the preceding paragraph. Hospice proposes to control its home health agency rather than to allow the home health agency to control its hospice functions. Hospice will have a positive effect on the clinical needs of health professional training in hospice care and related services in District IX and will make such training available to health professional schools. Hospice's proposal, which is based on a conservative growth projection of its historical patient service care needs, demonstrates the immediate and long-term financial feasibility of Hospice's non-profit project goals. Hospice's provision of home health services under a certificate of need will have a positive effect on the costs of and charges for home health services for the terminally ill and their families. Due to its inpatient hospital capability, Hospice is a regional resource and teaching center for the care of the terminally ill. Hospice has a positive impact on competition among providers of care to the terminally ill. Hospice has a positive impact on promotion of quality assurance due to its accreditation by the Joint Commission on Accreditation of Hospitals. No other home health agency in District IX is accredited by that national joint commission for provision of home health services. According to HRS' own determination, the District IX health plan calls for evaluation of home health services needs within the subdistrict of Palm Beach County. Under HRS' determination, that county subdistrict needs five additional home health agencies without regard to the special needs of the terminally ill. In addition, the 1985 District IX plan for hospice health services provides that hospices should be licensed as special home health agencies. Nothing in the 1985 District IX Health Plan suggests that "surplus" home health agencies in other District IX counties can provide access to service needed by the terminally ill and their families within Palm Beach County. According to HRS' determination, the provision of the State Health Plan addressing home health services deals with access of Medicaid and medically indigent patients to home health services. Hospice's proposal meets this goal of the State Health Plan because Hospice will provide 25% of its care to the medically indigent, even if Medicare reimbursement is available as a result of CON approval and home health agency licensure. On a percentage basis, Hospice proposes to provide 3 times more home health care services to the medically indigent than any other District IX applicant in its batching cycle and even a greater incidence than any District IX home health agency applicant in the immediately preceding batching cycle. Hospice's proposal also satisfies other goals and priorities of the State Health Plan not considered by HRS, including but not limited to the continued fostering of the hospice care alternative, potential increased provider participation in the Medicaid home health services program, and creation of funding mechanisms for hospice care of the medically indigent. Hospice is the only hospice program located within Palm Beach County providing and proposing to provide home health care to terminally ill patients and their families in its service area. Hospice can provide a higher quality of home care for the terminally ill than any other existing home health care provider in Palm Beach County due to its accreditation by JCAH and qualification for the Medicare hospice program including home health services. Hospice's home health care, due to provision of additional hospice services, and continuity of home health personnel serving each patient and patient family, is also more appropriate for the terminally ill than other traditional home health services. Hospice's on-call home health personnel must, by Hospice policy, reside no farther than 30 minutes from patients to be served on a round-the-clock basis. The 1985 District IX Health Plan endorses the 30-minute travel maximum for provision of hospice care at home. Even prior to Hospice's provision of service in Belle Glade, nearly one-third of Hospice's patients were members of ethnic minorities. The Belle Glade area served by Hospice is populated by ethnic minorities in need of home health care service. Hospice's development of a special program to serve AIDS patients in Belle Glade and throughout Palm Beach County will make needed home health care available to this underserved group. Other home health agencies recognize the special type of home health care provided by Hospice through their referrals to it. The existence of the Gold Coast Home Health Agency serving Broward County was the basis for HRS' determination that of all five applicants, only Hospice did not meet the criterion in Section 381.494(6)(c)6, Florida Statutes, evaluating the need for special services in adjoining areas. Both traditional and hospice-based home health agencies exist in adjoining District IX areas. Hospice has at present a paid staff of 33 and approximately 270 volunteers. As shown in its financial statements submitted with its application, Hospice has a broad base of community support sufficient to achieve its goals with the aid of the Medicare reimbursement mechanism. Since home health care is a vital component of hospice care, the operation of a home health agency by a hospice is both logically and philosophically a natural outgrowth of the developing hospice movement in the United States. Hospice has excellent prospects for the immediate and long-term financial feasibility of its project, especially if the regular Medicare reimbursement mechanism is made available. Hospice served more than 565 patients in fiscal 1985 and currently serves approximately 110-20 patients per month. Its estimated patient census used to calculate its 1985 and 1986 operating income and expenses in its CON application, therefore, is based on historical data and is conservative. Since Hospice has received approval for the first free- standing inpatient facility for the terminally ill in Florida, it will serve as a regional resource and training center for care of complex cases. Hospice, unlike any other applicant, will offer services complementary to home health care not available in adjacent service districts. Hospice's market entry as a licensed home health agency should stimulate other hospices to seek to meet the rigorous JCAH standards. Hospice provides many services not offered by traditional home health agencies at per visit charges that are competitive with those presently charged by those agencies. Hospice's market presence encourages competition among all home health agencies serving Palm Beach County, particularly for care of patients who are terminally ill or in the near-final stages of a catastrophic illness.
Findings Of Fact Petitioner, Palm Beach-Martin County Medical Center, Inc. (PBMCMC), owns and operates Salhaven Home Health Agency (Salhaven), a home health agency in Palm Beach County, Florida. Salhaven is licensed by respondent, Department of Health and Rehabilitative Services (HRS), to provide home health services in Palm Beach County. This authority was obtained in 1984. At the same time it obtained Medicare provider number 10-7203 effective August 10, 1984 from the United States Department of Health and Human Services (HHS). According to applicable statutory definitions, a home health agency is an agency or organization which provides home health services." Home health services in turn are defined as "health and medical services and medical supplies furnished to an individual by a home health agency, on a visiting basis, in a place of residence used as an individual's home." PBMCMC owns and operates Jupiter Hospital (JH), a 156-bed acute care facility in Jupiter, Florida. That municipality lies in Palm Beach County just south of the Palm Beach-Martin County line. A significant number of JH's patients reside in Martin County. The stipulated record suggests, but does not specifically state, that Salhaven provides home health services to JH's Medicare patients. Due to a limitation imposed on its service area, Salhaven cannot now provide home health services to Medicare patients who receive inpatient treatment at JH, but reside in Martin County. The proposed removal of this limitation is the subject of this proceeding. On December 15, 1986 PBMCMC's director of finance filed with HRS a request to expand without certificate of need (CON) review, Salhaven's service area to include Martin County, Florida. On April 15, 1987 HRS issued proposed agency action denying PBMCMC's request on the following grounds: Review of the department's files regarding Salhaven indicate Salhaven was a medicare provider in Palm Beach County prior to 1971. The records in HCFA indicate Salhaven withdrew from the medicare program after 1971 and did not reenter the program until 1984 when it sought and was approved for grandfathering into Palm Beach County. The agency approved the grandfathering of your client's home health agency in Palm Beach County based on the 1968-71 data which you produced in your July 1984 letter. However, there is no supporting information in your January 1987 letter which indicates your client served patients in Martin County during the 1968-71 period of time. The patient they served in 1975 was served during the period of time when Salhaven was not a medicare provider and was not licensed by the state. Based on this information the department cannot approve your client's request for expansion of its service region. If your client can prove they served clients in Martin County during the 1968-71 period of time when they held a provider number we will be willing to readdress this decision. The denial of the request precipitated this proceeding. Beginning in 1970, Salhaven was a home health agency providing home health services in the State of Florida. In August of that year, it was also certified by the United States Department of Health, Education and Welfare (HEW), which is HHS' predecessor, to provide Medicare services under provider number 10-7072. William Leone was Salhaven's assistant administrator from July 1968 through calendar year 1973, and its administrator from 1974 through 1983. According to his affidavit stipulated into evidence as exhibit B, Salhaven obtained a Medicare provider number from HEW in 1969 or 1970, and until Leone's retirement in 1983, Salhaven "took (no) action to withdraw... from the Medicare program, or to surrender its provider number." Leone added that had such action been taken, he would have been aware of the same. In addition, Leone filed required annual Medicare audit reports with the appropriate federal agency each year from 1970 through 1983, and utilized provider number 10-7072 on each such report. Finally, Leone did not receive a notice at any time from HEW, HHS or Blue Cross/Blue Shield advising that Salhaven's Medicare provider number had been terminated. In the affidavit of Margery Harp, stipulated into evidence as exhibit D, Harp established that during 1972, Salhaven was an active provider of home health services to Medicare recipients. However, the affidavit does not disclose in which counties (including Martin) such services were provided. The parties have stipulated, however, that Salhaven provided home health services to residents of Martin County in the months of February and November, 1975. HRS' decision to preliminarily deny PBMCMC's application is predicated upon its acquisition of a document identified as exhibit C, and which is stipulated to be a copy of a page taken from the logbook of the Health Care Financing Administration (HCFA), presumably an arm of the HHS, but whose statutory duties for and relationship to Medicare certified home health agencies is not of record. The parties have also agreed the logbook has a handwritten entry reflecting that Salhaven voluntarily withdrew from the Medicare program on November 1, 1972. Relying solely upon that information, HRS determined that Salhaven was not a Medicare participant after November 1, 1972, and therefore could not qualify for licensure. According to the admitted facts, which are drawn in part from an interview with an HCFA employee, exhibit C is a true and correct copy of a document taken from HCFA's home health agency files, and represents the manner in which records for home health agencies were maintained by HCFA in 1972. Indeed, it was the practice of HCFA to make a handwritten notation in the file when a provider was voluntarily terminated from the Medicare program. However, HCFA acknowledges that it does not know who made the handwritten entry pertaining to Salhaven, and has no correspondence or other documentation from Salhaven evidencing Salhaven's intention to withdraw from the program. The document is the only one in HCFA's possession which relates to Salhaven's participation in the Medicare program during the years 1970-1976. There is no evidence as to whether HCFA required formal or informal notice from a provider before it terminated a number, or did so on its own volition, or after receiving advice from another governmental agency. Neither is there any indication as to what office or section within HCFA had the responsibility to maintain and make entries in the logbook. There is also no evidence as to whether HCFA was the official custodian of Medicare certified home health agency records, or had the authority to issue and cancel provider numbers on its own behalf or acting as surrogate for HHS or HEW. HRS conceded its personnel have no personal knowledge, or indeed documentary evidence in its own files, to confirm that Salhaven voluntarily withdrew from the Medicare program on November 1, 1972. It also has no files pertaining to Salhaven that predate 1983. It is HRS' understanding and belief that HCFA would have terminated a provider number in 1972 if the provider had demonstrated no Medicare service activity for an extended period of time. However, this "understanding" was not corroborated by any other evidence. There is no evidence of record as to any HRS policy concerning its interpretation of the grandfather provisions of Section 400.504, Florida Statutes (1985).
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the request of Palm Beach-Martin County Medical Center for authority to expand the service area of Salhaven Home Health Agency into Martin County, Florida without certificate of need review be GRANTED. DONE AND ORDERED this 23rd day of November, 1987, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of November, 1987.
Findings Of Fact 1. The initial action of HRS in regard to the application of Home Health Care of Bay's application for a CON, as set forth in the State Agency Action Report (SAAR), was to deny the application. 2. The SAAR, dated April 29, 1987, together with a cover letter dated April 30, 1987, advised Home Health Care of Bay that its application has been denied because "[t]here was no need demonstrated by Home Health Care of Bay for an additional home health agency in Bay County." These two documents further advised Home Health Care of Bay of its point of entry into Chapter 120, Florida Statutes. 3. Home Health Care of Bay availed itself of this point of entry by filing a reguest for a formal hearing pursuant to Section 120.57(1) on the initial decision to deny its application. 4. Home Health Care of Bay is a for-profit corporation under the laws of Florida, having been incorporated on December 10, 1986, prior to the SAAR and the initial denial letter. 5. Home Health Care of Bay has had its principal office in the State of Florida since its incorporation. 6. Home Health Care of Bay does not have and has never had more than 25 full-time employees. 7. At the time of its CON application and of the initial denial by HRS, Home Health Care of Bay had assets of $1,000, which was received from issuance of 1,000 shares of stock at $1.00 per share, and a note receivable of $21,600. The total net worth of Home Health Care of Bay at the time this action was initiated was $22,600. 8. By its response to Request for Admission 1 and its stipulation at hearing, HRS has stipulated that Home Health Care of Bay incurred attorneys' fees and associated costs in DOAH Case No. 87-2151 equal to $15,000 and that said fees and costs are reasonable. It is so found. 9. Following a formal hearing in DOAH Case No. 87- 2151, a Recommended Order was entered on December 17, 1987, recommending granting of the CON. A Final Order was entered by HRS on February 15, 1988. HRS adopted all of the Findings of Fact in the Recommended Order. HRS granted certain exceptions to the Conclusions of Law. Specifically, HRS granted exceptions as to the conclusions that its reliance on the statutory criteria is "nebulous," that its failure to establish a need methodology is arbitrary and capricious, that it was requiring applicants to prove "unmet need," and that the Hearing Officer relied in part on a need methodology abandoned by HRS. 10. HRS granted the requested CON to Home Health Care of Bay by this Final Order. 11. Findings of Fact in that Recommended Order, which were adopted by HRS, included findings that: A. HRS abandoned its "interim policy" regarding use of a need methodology in home health agency applications in late 1986. (Finding of Fact 56). B. HRS informed applicants that it had abandoned the interim policy only after applications were filed in the second batching cycle of 1986. (Finding of Fact 57). C. Applicants in this December, 1986, batching cycle, including Home Health Care of Bay, were asked for an unlimited extension of time within which HRS could render a decision. (Finding of Fact 58). D. Applicants who refuse to agree to an extension were evaluated on the basis of the "statutory need criteria." Applicants who did not agree to an extension were denied. (Finding of Fact 59). E. The new "policy" used by HRS to evaluate these applications (the ones who refused to grant extensions) put the burden of proof on the applicant to demonstrate an unmet need. Such a demonstration would be difficult to make. (Finding of Fact 62). F. HRS reviewed Home Health Care of Bay's application using the new "policy" based on the "thirteen statutory criteria." Such a review required Home Health Care of Bay to prove need by demonstrating an unmet need. (Finding of Fact 63). G. As evidenced by HRS' review of Home Health Care of Bay's application, a policy requiring an applicant to meet a negative burden of proof is unreasonable. It imposes a standard which is e for an applicant to meet. (Finding of Fact). 12. Fig in the Recommended Order set forth extensive the standard used by HRS to review the application Health Care of Bay and the reasons why the review was deficient and the determination to deny the application was flawed. 13. One Conclusion of Law which HRS did not reverse is that found on page 35 of the Recommended Order in the second full paragraph: Further, DHRS' preliminary decision had no reasonable basis in law or fact at the time it was made. It is this same preliminary decision which was set forth in the SAAR and which constituted the initial decision from which Home Health Care of Bay had a point of entry into Chapter 120 proceedings. 14. In attempting to justify its actions, HRS presented the testimony of Sharon Gordon-Girvin. Ms. Gordon-Girvin had no part in or knowledge of the initial decision of HRS to deny this application. Instead, shortly before and in preparation for the formal hearing in DOAH Case No. 87-2151, Ms. Gordon- Girvin reviewed the SAAR and the initial decision and agreed with HRS' counsel not to enter into a settlement with Home Health Care of Bay. Her testimony regarding the basis for and correctness of the initial denial is rejected as being irrelevant to the question of whether HRS had a reasonable basis in law and in fact at the time it initially denied the application. Additional, such after-the-fact rationalization and justification for HRS' actions is so self- serving as to merit little weight. 15. HRS failed to prove that its initial denial was reasonable in DOAH Case No. 87-2151 and it failed to prove in this case that there was any reasonable basis for its initial denial. 16. HRS did present evidence that Home Health Care of Bay may be able to recover some of its fees and costs through Medicare reimbursements amortized over at least five (5) years. However, the evidence was speculative and uncertain, and HRS did not offer evidence that Home Health Care of Bay will recover any or all of its fees and costs through Medicare reimbursements.
The Issue Whether the applications for certificate of need numbers 8380, 8381, 8382 and 8383, filed by Petitioners RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., ("IHS of Florida,") and Putnam Home Health Services, Inc., meet, on balance, the statutory and rule criteria required for approval?
Findings Of Fact Care First The Proposal Care First, the holder of a non-Medicare-certified home health agency license, was established in March of 1996. Owned by Mr. Freddie L. Franklin, Care First is the successor to another non-Medicare-certified home health agency also owned by Mr. Franklin: D. G. Anthony Home Health Agency ("D. G. Anthony"). Established in May of 1995, D. G. Anthony provided over 10,000 visits in its first 10 months of operation mostly in Leon and Wakulla Counties, pursuant to a contract with Calhoun-Liberty Hospital Association, Inc. Very few of the 10,000 patients were referred to D. G. Anthony by Calhoun-Liberty; they became D. G. Anthony's patients through community-based networks, including physicians, created through the efforts of Mr. Franklin and D. G. Anthony itself. D. G. Anthony was dissolved in 1996. Both its patient census and its staff of 45 were absorbed by Care First. D. G. Anthony's contract with Calhoun-Liberty was substantially assumed by Care First so that it provided service to Medicare patients as Calhoun-Liberty's subcontractor. From the point of view of the federal government, the Medicare patients served by Care First were Calhoun-Liberty's patients, even those who had not been referred to Care First by Calhoun Liberty and who had been referred from other community sources. Care First, therefore, was simply a sub- contractor providing the services on Calhoun-Liberty's behalf. The contract was terminated effective December 1, 1996. Calhoun-Liberty was free to terminate Care First with 30 days notice, a peril that motivated Mr. Franklin to seek the CON applied for in this proceeding. With the termination of the contract, Care First ceased serving Medicare patients, "because Mr. Franklin did not want to enter into another subcontractor arrangement because of all the issues and problems," (Tr. 934,) associated with such an arrangement. Mr. Franklin is involved with nursing homes as the administrator at Miracle Hill Nursing Home in Tallahassee. He is an owner of Wakulla Manor Nursing Home in Wakulla County, and he owns a 24 bed CLF, Greenlin Villa, also in Wakulla County. Miracle Hill has the highest Medicaid utilization of any nursing home in District 2. Both Miracle Hill and Wakulla Manor are superior rated facilities. On the strength of Mr. Franklin's extensive experience with community-based organizations and health care services, as well as Care First's succession to D. G. Anthony and other historical information and data. Care First decided to proceed with its application. In the application, Care First proposes to establish a home health agency that, at first, will serve primarily Franklin, Gadsden, Jefferson, Leon, Liberty and Wakulla Counties. It plans to expand into Madison and Taylor Counties in its second year of operation. Five of these eight counties have high levels of poverty; six of the eight are very rural, with the population spread widely throughout the county. Ninety-six percent of Care First's patients are over age Minority owned, approximately 65% of the patients are members of minorities. Many of the patients live in rural areas and are Medicaid recipients or are uninsured low income persons who do not qualify for Medicaid but cannot afford home health care. Since it will be serving the same patient base as a Medicare-certified agency, Care First has committed to the provision of 7% of its visits to Medicaid patients and 1% of its visits to patients requiring charity/uncompensated care. Care First projects 18,080 visits in its first year and 29,070 in its second year. Care First will promote efficiency through the use of a case management approach. Each patient will be assigned a case manager who will act as the patient advocate to provide care required and to identify and assist the patient with access to other "quality of life" enhancing services. Care First proposes an appropriate mix of services, including skilled nursing, physical therapy, speech and language therapy, occupational therapy, home health aide services and social services. Care First estimates its total project cost at $25,808. Of this amount, $2,000 is indicated as "start-up cost", with nothing allocated to salaries. Care First indicates no "capital projects" other than its proposal for the home health agency in District 2. Care First's proposal would be funded from a $60,000 bank line of credit. Projected Utilization Potential patients will be able to gain access to Care First through several avenues, including physician referral, hospital referral, nursing home discharge, assisted living referrals from community agencies and organizations such as Big Bend Hospice and through private referral. In addition, there are several natural linkages to the community for Care First. Wakulla Manor and Miracle nursing facilities offer Care First's services to discharged residents in need. Very often, residents and families choose Mr. Franklin's agency because they are familiar with him, staff or the quality of care provided. Residents of Greenlin Villa, owned by Mr. Franklin, frequently chose Care First when in need of home health agency services. Mr. Franklin's civic, church, and community involvement is impressive. He is president of the Florida Health Care Association, chairman of the board of the Tallahassee Urban League, superintendent of the Wakulla County Union Church Group, and serves on the advisory board for the Allied Health Department for Florida A&M University. In the past, he has served on the Board of Trustees of Tallahassee Community College. He was accepted as an expert in long-term care administration in this proceeding based in part on his service on the Governor's Long Term Care Commission. Miracle Hill has held a "Superior" licensure rating for the last ten consecutive years. It is the highest rating awarded by the AHCA licensure office and is intended to blazon the high quality of care provided by the facility. Although reported through Calhoun-Liberty, very few of D. Anthony's and Care First's past referrals have been generated through that affiliation. Rather, they have come through community contacts and getting the referrals from "talking with physicians," (Tr. 922), in Tallahassee and the surrounding areas, many of whom Mr. Franklin has gotten to know through his post as Administrator of Miracle Hill Nursing Home. By far, it is through physician referrals that Care First receives most of its patients. Care First's physician referral list includes 47 doctors who referred patients to D. G. Anthony since May, 1995. These doctors practice in urban areas and some have rural clinic offices which they staff on certain days of the week. Physicians are willing to refer patients to Care First because of the quality of care which has been provided by Care First, as well as the reputation of its owners. The Care First application included letters of support from eight physicians who have referred patients to Care First in the past and state that they will continue to support Care First with referrals in the future. Among the letters included are those from Dr. Earl Britt, a practitioner of internal medicine and cardiology in Tallahassee, and Dr. Joseph Webster, who practices internal medicine and gastroenterolgy in Tallahassee. Many of the patients of these two physicians are elderly. Dr. Britt's patients often have chronic hypertension or heart disease, are diabetic or suffer strokes. These two physicians provided over half the total number of patient referrals to D.B. Anthony and Care First. Dr. Britt and Dr. Webster established through testimony that Freddie Franklin and Care First have an excellent reputation for provision of quality of care and enjoy significant support among physicians within the service area. Moreover, Dr. Britt, although based in Tallahassee, stressed the importance of Care First's proven ability to provide home health services in the rural setting both from the standpoint of understanding the needs of the rural patient and from being able to travel over rural terrain in order to deliver services. (Tr. 1151, 1152, 1154). Approximately 11,500 visits were performed by D. G. Anthony staff from the period of May 1995, through April 1996, before they became the staff of Care First. Since the agency has established a presence in the district and has physician and other referral mechanisms in place, it is reasonable to project that Care First will continue to grow and will experience between 18,000 and 20,000 visits in its first year and 28,000 to 31,000 visits in year two as a Medicare-certified home health agency. These projections stem from the historical and very recent monthly growth of D. G. Anthony, as well as demand it is experiencing from Franklin and Jefferson Counties, two counties it does not serve regularly at present but plans to serve regularly in the future. The reasonableness of Care First's projections is bolstered by the conservative number of visits per patient the projections assume, 35, when typically Medicare-certified agencies average at least 35 visits and as many as 60 visits per patient. Care First's utilization projections are reasonable. It enjoys an excellent reputation for quality of care and ability to deliver services. Together with its predecessor, D. G. Anthony, it has a proven track record and has benefited from a referral network that remains in place. These factors, together with the conservative assumptions upon which its projected utilization is based demonstrate that its projected utilization is reasonable. Financial Feasibility of Care First The total project cost for the Care First agency is projected to be $25,808. The majority of the costs are reasonable for this type of health care project. The majority of the project development costs, the application fee and much of the cost of the consultant and legal fees, have already been paid by Care First. Care First's Schedule 2 was prepared in conformance with the requirements of the agency and accurately lists all anticipated capital projects of Care First. The necessary funding for the Care First project will come from Care First's existing $60,000 line of credit with Premier Bank, in Tallahassee. This method of funding the project is reasonable, appropriate, and adequate. Care First has demonstrated the short term financial feasibility of its project. Care First's schedule 6 presents the anticipated staffing requirements for its home health agency. The staffing projections are based upon the historical experience of D. G. Anthony and Care First, taking into consideration the projected start-up and utilization of the agency. The projected salaries are based upon current wages being paid to Care First employees, adjusted for future inflation. Care First's schedule 6 assumptions and projections are reasonable, and adequate for the provision of high quality care. The staffing proposed by Care First is sufficient to provide an RN or an LPN and an aide in each of the eight counties Care First proposes to serve in District 2. Care First's schedule 7 includes the payor mix assumptions and projected revenue for the first two years of operation. Medicare reimburses for home health agency services based upon the allowable cost for providing services, with certain caps. The Care First revenues by payor type were based upon the historical experience of D. G. Anthony and Care First, as well as the preparation of an actual Medicare cost report. The Care First payor mix assumptions and revenue assumptions are reasonable. Care First's projection of operating expenses in Schedule 8A is also based on the historical experience of D. G. Anthony and Care First, as modified for the mix of services to be offered and the projected staffing requirements. The use of historical data to project future expenses adds credibility to the projections. Care First's projected expenses for the project are reasonable. The Care First application presents a reasonable projection of the revenues and expenses likely to be experienced by the project. Care First has reasonably projected a profit of $8,315 for the first two year of operation. Care First's proposal is financially feasible in the long term. As the result of its community contacts, Care First has been offered the use of donated office space in Franklin, Jefferson, Wakulla, and Gadsden counties. The use of donated office space will decrease the cost of establishing a physical presence and providing services in those counties since Care First will not have a lease cost for a business office and a place to keep supplies. Quality of Care Through the experience of D. G. Anthony, Care First has identified the particular needs of the community it served. This experience has been carried over into Care First's provision of services. In the 9 months of Care First's existence at the time of hearing, it provided quality of care. Its predecessor, D. G. Anthony, also provided quality of care. While Care First's experience is relatively limited, there is no reason to expect, based on the experience of both Care First and its predecessor D. G. Anthony, that quality of care will not continue should its application be granted. IHS of Florida The Application IHS of Florida is a wholly-owned subsidiary of Integrated Health Services, Inc. ("IHS") formed for the specific purpose of filing CON applications. IHS operates other home health agencies under other subsidiary names. Pernille Ostberg is a senior vice president of the Eastern Home Care Division of Symphony Home Care Services, Integrated Health Services. In that capacity she oversees nearly 195 operations in six states, including Florida. Her operations include home health agencies, durable and medical equipment distributions, and infusion therapy offered by pharmacists. Under Ms. Ostberg's guidance, IHS has grown to its current roster of 195 agencies in only three years, from a beginning of only five agencies. IHS first acquired Central Park Lodges, primarily a nursing home company which also owned five home health agencies. Once these agencies became Medicare certified, IHS made a corporate decision to acquire additional Medicare certified home health agencies. Beginning approximately three years ago, IHS undertook a series of acquisitions which included Central Health Services, Care Team, ProCare/ProMed, and Partners Home Health. More recently, IHS has acquired the Signature Home Health and Century Home Health Companies. And, immediately prior to the final hearing in this matter, IHS acquired First American Home Health Care, making IHS the fourth largest provider of home health services in America. Of all the home health agencies overseen by IHS, 95% are Medicare certified, and 62-63 are located in Florida. IHS now has a presence in all districts except District 1 and 2. IHS personnel also have extensive experience in starting up new home health agencies. IHS personnel have opened over 40 locations across the United States. IHS employees have extensive experience bringing new home health agencies through successful surveys by the Joint Commission on the Accreditation of Hospital Organizations ("JCAHO") recommendations. Of 18 branches personally taken through initial survey by IHS's Pernille Ostberg, none were recommended to change their operations and none were cited for a deficiency. IHS has recently opened, licensed, and certified new home health agencies in AHCA Service District 5, 6, and 10. They have also received licensure in District 7, 8, and 11. Based on the extensive expensive of IHS personnel, a start up home health agency typically experiences 8,000 - 15,000 visits per first year. Opening a new program requires two months for licensure. It will require a registered nurse for three months to make certain all manuals are in place and that quality personnel are recruited. After achieving licensure, one must wait for a certification survey, which may take as long as six months. The three IHS home health agencies that became certified recently have experienced 200 visits in the first month, a good sign of growth. IHS' umbrella organization for home health organizations is Symphony. Most of their home health companies retained their original names. Other IHS home health companies include ProCare, Central Health Services, Partners Home Health, Nurse Registry, and First American. IHS of Florida has applied for applications in other districts. This applicant filed applications in District 7, 8 and 10 and each were approved. IHS of Florida's CON application number 8382 was prepared by Patti Greenberg with the significant input of IHS and IHS of Florida's operational experts. Ms. Greenberg has prepared 75-100 CON applications, 20-25 of which sought approval for Medicare Certified Home Health Agencies. Each of these prior applications had been approved or otherwise reached settlement before litigation. The Proposed Project Once the needs analysis was complete, IHS examined geographic issues within the 14 county district. IHS examined where the populations required home health agencies and what niche of the market IHS could expect to achieve. Projected visits were determined by examining month by month, how this agency would grow. This projected utilization was subdivided among sub-visit types. Existing IHS home health agencies visit mix (skilled nursing as opposed to home health aide or therapy visits) was used to estimate skill type of the projected total volume. The projected utilization was also subdivided by payor class. This payor class projection was derived specifically for District 2, its poverty levels and its managed care penetration. In the aggregate, IHS projects 7,650 visits in year one and 17,100 visits in year two. This projection is reasonable and achievable. Witnesses for the Agency agreed that IHS of Florida's projected number of visits was "definitely attainable". Past and Proposed Service to Medicaid Patients and for Medically Indigent The payor class analysis allowed IHS to conclude it should condition its approval of its application under the performance of 5% Medicaid and 1% charity care. The balance of the population served by an IHS Medicare Certified Home Health agency would be covered by Medicare. The condition is important as it is a requirement which, if not achieved, will subject IHS of Florida to fines and penalties by the agency. Improved Accessibility The applicant will improve the efficacy, appropriateness, accessibility, effectiveness and efficiency of home health services in District 2 if approved. IHS of Florida will provide good quality of care, should its application be granted. Quality of Care Through competitive forces, the applicant's approval will also improve the quality of care offered by home health agencies in District 2. The approval of IHS of Florida's application will also comply with the need evidenced by the extent of utilization of like and existing services in District 2. Economies from Joint Operations Certain economies derived from the operation of joint projects are achieved by IHS of Florida's proposal. IHS has a home office and corporate umbrella which oversees all of its operations for home health services. This master office offers economies of sale by sharing resources across a wide array of home health agencies in Florida and other states. Thus, the incremental expense for corporate overhead is reduced as compared to a free-standing home health agency. Additionally, this national oversight provides better economies to provide the most recent policies and procedures, billing systems, and other systems of business operation. Financial Feasibility IHS of Florida has the resources to accomplish the proposed project. As demonstrated on schedule 1, and schedule 3 of IHS exhibit 1, the budget for the project is only $144,000. This budget includes all appropriate equipment for both the initial and satellite offices. Budgeted amounts include all required lease expenses, equipment costs and even start-up costs such as salaries for the recruitment of training and staff prior to opening. In total, $52,000 of pre-opening expenses are projected, which is reasonable. IHS of Florida filed applications for other home health agency start-ups in three different districts. The applicant had more than $180,000 in cash on hand and an additional $226,000 assured from a commitment letter from IHS which was also contained in the application. A letter of commitment from Mark Levine, a director and executive vice president of IHS, indicated IHS will provide $250,000 in capital for this specific project. Additionally, IHS will provide up to $1 million in working capital loan to assure no cash flow problems ever arise. A similar letter of commitment appears in each of the CON applications which IHS of Florida has filed. IHS has committed to fund each of the CON applications applied for by IHS of Florida. Each of these letters of commitment for the various CON applications sought by this applicant are on file with the AHCA. In total, the applicant projects $600,000 in capital commitments assured. IHS' balance sheet, reveals access to $60 million in cash and cash equivalent. The record clearly demonstrates an ability of IHS to fund all capital contributions required by the applicant. The current assets of IHS approximate $240 million. In addition to having cash in the bank, IHS is a growing concern and is, in fact, a Fortune 500 company that is publicly traded on the New York Stock Exchange. IHS generates revenues which exceed its annual expenses. In the last year, IHS derived $30 million more than it experienced in expenses. The application is financially feasible in the short- term. IHS' application is also feasible in the long-term. IHS of Florida's utilization projections are reasonable. Budgeted staffing and salaries are reasonable. The cost limit calculation and reimbursement calculation by payor source, which is provided in great detail in Schedule 5 of IHS of Florida's application, is reasonable. Projected expenses associated with this project were reasonably calculated based on the actual experience of other IHS Home Health operations. The reasonableness of these costs are also demonstrated when compared with the cost per visit by existing agencies in District 2. In fact, IHS of Florida predicted it would be a lower cost provider than the expected cost of existing agencies at the time IHS of Florida's operations would begin. IHS of Florida's proposal will have a healthy, competitive effect on the cost of providing services by other providers. Putnam The Proposal Putnam proposes to establish a Medicare-certified home health agency with its primary office located in Bay County. Bay County was selected as the primary office based upon the locations of existing and approved agencies in District 2, the aggregate utilization of each, and the number of individuals aged 65 and over distributed among the existing District 2 counties and agencies. Mr. Alan Anderson is Putnam's sole stockholder, Director, and President. Under the ownership and administration of Alan Anderson, Putnam has provided Medicare-certified home health services in AHCA District 3 continuously since 1986. Mr. Anderson is also the sole owner, director, and president of Anderson Home Health, Inc., a Medicare-certified home health agency serving AHCA District 4 since 1992. Anderson Home Health's CON was obtained by Putnam through the same process undertaken by the prospective applicants in this proceeding. Putnam's District 3 agency has successfully served District 3 residents since 1986 at first through its Palatka office, then growing to its current size of four offices. In District 4, Anderson Home Health, Inc. has also experienced successful operations having grown from its principal office in Duval County to a total of four offices. Putnam's District 3 home health agency began with the original office located in Palatka, followed by offices opened in Gainesville, Ocala and Crystal River. Anderson Home Health, Inc.'s District 4 operation began with the original office located in Jacksonville; the second office was opened in Daytona Beach, followed by the opening of the third office in Orange Park; and the fourth office was opened in Macclenny. Putnam's District 3 agency is JCAHO accredited "with commendation." As part of CON application No. 8383, Putnam has agreed to certain conditions upon award. First, the proposed project will locate its primary office in Bay County. Putnam also conditions its approval with the provision that 0.25% of its admissions will be persons infected with the HIV virus. Four percent of its patients will be Medicaid or indigent patients. Finally, Putnam has conditioned its approval upon the provision of various special programs such as high tech home health services, a volunteer program, and the establishment of a rural health care clinic. History or Commitment to Provide Services to Medicaid and Indigent Patients For Medicare reimbursement purposes, Putnam proposes to maintain a Medicare-only agency and private sister agency which provides services to non-Medicare patients. The private sister agency will provide service to the Medicaid and indigent patients. The costs of providing services to these non-paying or partial paying patients will be absorbed by the agency as a contribution to the community. The establishment of a private sister agency to handle the non-Medicare patients is common in the home health industry. As a condition in the application, Putnam will accept up to 3.0% Medicaid patients. Although it stated in its application that it would accept between .5%-1.0% indigent patients, its conditioning of the application on 4.0% Medicaid and indigent patients would necessitate that it accept at least 1.0% indigent (if not more, should the Medicaid patients fall below 3%) in order to meet the 4.0% Medicaid and indigent care condition. The percentages proposed by Putnam are consistent with the statewide average (approximately 95% Medicare) and the District average (approximately 92.1% Medicare). Bay County's average of Medicare patients is approximately 96.4% Medicare. To meet the 4.0% Medicaid and indigent condition, Putnam's average of Medicare patients might have to be less than the Bay County average but not by much. Certainly, meeting the condition is achievable. The agency's position is that Putnam's Medicaid/indigent commitment is not a ground for denial of the application. Quality of Care Putnam has continuously owned and operated a licensed Medicare-certified home health agency in District 3 since 1986 and has been JCAHO accredited with commendation status since 1994. In an effort to continuously provide quality care, Putnam has developed a comprehensive set of policies and procedures to guide its staff, its physicians, volunteers, patients, as well as patients families. No evidence was presented to suggest that Putnam does not have a history or ability to provide quality care. Availability of Resources, Including Health Manpower, Management Personnel and Funds for Capital and Operating Expenditures Putnam has provided Medicare-certified home health service to the residents of District 3 for ten years. Putnam will be able to share its existing personnel and operations expertise with the proposed District 2 agency. Administrative, Managerial, and Operational Personnel Putnam intends to utilize existing administrative personnel in the start up and overall operation of the proposed agency. These management personnel include the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Data Processing Director, Director of Volunteers, Personnel Director. These experienced personnel will be available to provide valuable management support to the proposed agency. The proposed agency will be operated by an administrator who will report directly to Putnam's CEO, Alan Anderson. The agency's administrator will be actively involved in budget preparation, physician relations, community education, and preparation for regulatory agency surveys. The proposed agency will rely upon the demonstrated experience of key personnel in its initiation. Ms. Nora Rowsey, experienced in the start-up phases of home health agencies, will personally supervise and implement the start up phase of the proposed District 2 agency. Putnam intends to hire individuals to work within the proposed agency who already have experience in the provision of the necessary services. Current employees of Putnam's as well as contract personnel of the District 3 agency have indicated a willingness to provide services in Bay County once the application is approve. Funding and Capital Resources Putnam projects the total costs of initiating the proposed agency to be approximately $70,000. Putnam has simultaneously applied for two other Medicare-certified home health agencies, in Districts 6 and 7. Each of these projects area also projected to cost approximately $70,000. Putnam, therefore, has projected costs associated with all three projects of approximately $210,000. Additionally, there is a $10,000 contingency cost related to the District 3 offices bringing the total expenditure for all capital projects of $220,000. Putnam's application includes two letters from First Union National Bank of Florida which substantiate that there are funds on hand to finance all of Putnam's capital expenditures, including the District 2 proposed agency. As of April 18, 1996, Putnam's bank account had a twelve month average balance of $245,949.02. As of April 18, 1996 the accounts of both Putnam and Anderson Home Care Inc., had a combined twelve month average balance of $676,656.93. The evidence established that these funds exist and are available for all proposed capital projects. In the two years prior to hearing, Putnam showed sound management, significant growth, and a strong financial position. It continues to do so. In an interoffice memorandum dated May 28, 1996, from Roger L. Bell to Richard Kelly, Health Services and Facilities Consultant, Putnams' financial position was described as follows: The current ratio of .62 indicates the current assets are not adequate to cover short term liabilities. The long term debt to equity and equity to assets ratios are very weak. This, along with the negative equity make a weak financial position. The profit margin at .1% is also very weak, and raises some concern with the applicant's ability to cover operating expenses . Putnam Ex. No. 4. This criticism was answered by Putnam. The agency may not have considered certain factors applicable to a predominantly Medicare-reimbursed home health agency. Putnam's current liabilities are payable in a longer term than the receivables are collectible. Furthermore, with provision of 98% Medicare services, which is solely cost reimbursed, there remains only two percent of the operation left to make a profit. A .1% profit from the small amount of insurance and private pay patients indicated financial health. Putnam, moreover, is a viable operation because of its historical success, its knowledge of the industry, its expansion to six locations, its growth in staff, and its growth in patient visits. Putnam has the resources available to provide the necessary administrative, managerial, and operational manpower needed by the proposed home health agency. AHCA's financial criticisms are unfounded; Putnam has on hand the capital necessary for the accomplishment of the proposed project. Putnam has the experience and know-how to make the proposed project work in District 2's rural areas. Financial Feasibility Putnam has the resources to implement this project if approved. Putnam has the same capability that existed when three offices were opened during the period from April 1992 through February 1993, and the same resources when four offices were opened in 1995. In every instance, the new offices were started up with cash on hand from operation. Mr. Anderson, Putnam's President and sole shareholder and director, testified that he spends much time in the financial area of the operations. As of November 29, 1996, after deducting all accounts payable, Putnam has a cash balance of approximately $390,000. Anderson Home Health, Inc. had a balance of approximately $425,000. Mr. Anderson testified that the First Union letters in the application at pages 231 and 232 were correct and that Putnam is in even better shape now than when the letters were written. Putnam is financially feasible in the short term. AHCA contends Putnam's project is not financially feasible in the long term because the projected visits stay the same in the second year and because it does not project a profit in year two of operation. This fails to take into account Putnam's performance over the past ten years which, as the agency conceded at hearing, is an important consideration . Mr. Anderson purchased Putnam in 1986. At that time the agency had a single office in Palatka doing 4,000 visits. Following Mr. Anderson's purchase of the agency it had grown to over 55,000 visits and close to a hundred employees. After the success experienced by Mr. Anderson in Palatka, Putnam filed a CON application for District 4, with a proposed principle site in Jacksonville. The District 4 CON was approved by the agency--without any concerns for financial feasibility nor with any concerns for Putnam's cash flows. Without having any experience or referral sources in Jacksonville, Putnam began doing approximately 7,000 visits. The number of visits jumped to 45,000 in the second fiscal year, 123,000 in the third fiscal year, and as of September 30, 1996 the Jacksonville office performed 158,000 visits. Aside from the extraordinary growth experienced in the Palatka and Jacksonville offices, already discussed, Putnam has opened rural offices also doing very well. The Macclenny office in rural Baker County had over 15,000 visits in the first twelve months and is currently averaging over 1800 visits. The Crystal River office in rural Citrus County made over 12,000 visits in its first year and is currently doing approximately 1400 visits a month. Every new office opened by Putnam or Anderson Home Health since 1991 has been break even or better. Putnam has a proven track record for the successful and profitable operation of new Medicare-certified home health agencies. Putnam's project is financially feasible in the long term. Utilization Projections The application sets forth reasonable utilization projections. Based on Putnam's utilization in the past, there is no reason to believe the projections set forth in the application are or unreasonable or will not be achieved. Impact on Costs Putnam is a high tech provider of home health services and will provide some services not currently available or available only in a limited number of agencies. The impact of approval of Putnam's application on costs in the District will be minimal due to the reimbursement issues associated with Medicare which is cost based. RHA A Not-for-Profit Corporation in District II RHA is not-for-profit corporation whose purpose is to provide a continuum of care to the community. All profits are returned to its nursing homes or agencies as a way of continuing to build the programs. RHA owns two nursing homes in AHCA District II; Riverchase Care Center in Gadsden County and Brynwood Center in Jefferson County. If approved, RHA is proposing to locate its Medicare certified home health agency in existing space within the Riverchase and Brynwood nursing facilities. Both of these facilities are managed and operated by HealthPrime, Inc., a company which operates approximately 40 facilities in 13 states. While RHA is technically the owner and therefore applicant for this CON, HealthPrime would operate the proposed Medicare certified home health agency within the nursing homes. RHA's home health agency would have two offices. The office located in the Riverchase facility would serve Gadsden, Liberty, Franklin, Gulf, Wakulla, Jackson, Calhoun, Washington, Holmes and Bay Counties. The office located in the Brynwood facility would serve Leon, Jefferson, Madison and Taylor Counties. Financial Feasibility The only questions raised by AHCA concerning RHA's financial feasibility went to the ability of RHA to fund this project in conjunction with other CON projects listed on Schedule 2 of its CON application. The largest project on Schedule 2 of RHA's application was a CON application for a 20 bed addition to Riverchase Care Center. At hearing it was determined that since the filing of the instant home health CON application, the 20 bed application had been withdrawn, was no longer viable, and was not being pursued by RHA. Once AHCA's financial expert learned that the 20 bed addition to the Riverchase Care Center had been administratively withdrawn and that its costs should therefore no longer appear on Schedule 2, questions about the financial feasibility of the project were resolved. RHA's project was shown to be financially feasible in the short term based upon the financing commitment of HealthPrime. RHA proved that its assumptions and projections made in its financial analysis are reasonable. These assumptions were based on actual experience in the operation of similar skilled nursing facility based home health agencies, as well as prior experience of other home health agencies in their first two years of operation. RHA's proposed project shows a net income in years one and two and is financially feasible in both the short and long term. Availability and Access of Services To the extent that the number of people needing home health care will increase in the future, there is need for new providers of home health services to provide such availability and access. RHA's willingness to condition its application on service to AIDS, indigent and Medicaid patients can only improve the availability and access to services in the district. In addition, RHA's approval to provide nursing home based home health services is unique to the provision of home health services in District II. Efficiency RHA's proposal, which would place its home health agency within its nursing homes, is unique among the applicants in this proceeding. Such an arrangement provides not only an efficient continuum of care to the patients, it also provides efficiencies and cost savings in the sharing of resources. RHA's proposed project is cost effective because it utilizes existing space and equipment in its nursing homes. Skilled nursing home based Medicare certified home health agencies are specifically recognized by the Federal Medicare program in their cost reports. Home health reports are filed as a part of the nursing home cost report and there is an allocation of the nursing home's cost to the home health agency. This benefits both the provider and the Medicare program through cost savings. RHA's cost per visit to the Medicare program of $48 will be substantially less than the District II average of $66 per visit projected for the time RHA will be operational under the applied- for CON. RHA's proposed project will have no impact on its costs of providing other health care services. Appropriateness and Adequacy RHA proposes to provide the entire range of home health services throughout the district. Given the project need in the planning horizon, RHA's proposal is more than adequate to meet the demand for such services. Quality of Care An applicant's ability to provide quality care is another important factor in statutory and rule criteria. RHA and HealthPrime have shown, through operation of their nursing homes in Florida, all of which have superior ratings, that they have the ability to provide quality health care. In addition, HealthPrime, which will actually operate the home health agency, has experience operating four other nursing home based home health agencies. HealthPrime will utilize its quality assurance programs already in place in its other home health agencies and will seek JCAHO accreditation of this proposed agency. By combining a home health agency with its existing nursing homes, RHA will improve the case management of its patients by providing vertical integration of its services in a continuum of care. Such continuum of care provides a stability in personnel and providers that are working with the patient. Economies and Improvements from Joint or Shared Services As previously discussed, RHA's unique proposal to operate a nursing home based home health agency not only offers a continuum of care for the patient, it also provides fiscal economies to the agency as well as the Medicare program. Resource Availability Based on RHA's experience of hiring personnel for its existing nursing homes in the district, there will be no problem in hiring sufficient personnel for RHA's agency. Fostering Competition The addition of other Medicare certified home health agencies in a district consisting of 10 counties and only 23 providers will promote increased competition and more options for patients. Findings Applicable to All Four Applicants No Fixed Need Pool The agency has no rule methodology to determine the need for Medicare-certified home health agencies. The agency's most recent home health need methodology was invalidated in Principal Nursing vs. Agency for Health Care Administration, DOAH Case No. 93-5711RX, reversed in part, 650 So.2d 1113 (Fla. 1st DCA 1995). There is, therefore, no numeric need determination, or "fixed need pool", established by the agency applicable in this proceeding. District 2 AHCA District 2 is composed of 14 counties. The applicants propose to concentrate their service in various, different parts of the district. Local and State Health Plan Preferences District 2 Health Plan Services to Medicaid and Medically Indigent The first preference under the District 2 Health Plan provides a preference to applicants with a history of providing services to Medicaid or medically indigent patients or commitment to provide such services in the future. Mr. Franklin of Care First has such a history. He is an owner of Wakulla Manor, which had a Medicaid occupancy rate of 88.09% for the period of July-December, and the administrator of Miracle Hill Nursing Home which had a Medicaid occupancy rate of 95.74% for the same period. In the face of such a record, Care First’s commitment of 7% Medicaid and 1% uncompensated/charity patients might seem to pale. But it is a significant commitment, given the nature of the home health agency business, and one upon which Care First agrees its application should be conditioned. IHS conditioned its application on 5% Medicaid and 1% charity care. Putnam conditioned its application on an “Indigent and Medicaid participation equal[ling] 4.0%.” Putnam Ex. No. 1, pg. 51. Putnam, moreover, proposes a Medicare-only agency. Establishment of a private sister agency, a practice common in the home health care industry, will allow Putnam to provide service to the Medicaid and indigent patients separate from its Medicare-only agency. RHA has provided a high percentage of Medicaid/charity days at its Riverchase facility (92.10%) and at its Brynwood facility (90.24%). In addition, RHA is willing to condition its CON on the provision of a minimum of 1% of annual visits to indigent care and 5% to Medicaid. Service to Unserved Counties. Preference 2 states that “[p]reference should be given to any home health services CON applicant seeking to provide home health care services in any county within the District which is not presently served by a home health agency.” There are no counties within District 2 that are not presently served by a home health agency. Service Through a County Public Health Unit Preference 3 states that “[p]reference should be given to a home health services CON applicant seeking to develop home health care services to be provided through a county public health unit in the district in order to more adequately serve the elderly and medically indigent patients who are isolated or unable to travel to permanent health care sites." Of the four applicants, only IHS of Florida’s application is conditioned on working with public health units. IHS has experience working with public health units, working with them currently in Martin County, Manatee County and Broward County. Nonetheless, IHS of Florida will not be providing its services “through” a public health unit. Public Marketing Program Preference 4 states, “[p]reference should be given to a home health services applicant who has a history of providing, or will commit to provide, a public marketing program for services which included pamphlets, public service announcements, and various other community awareness activities. These commitments should be included on the granted CON as a condition of that CON.” Care First currently markets its services to the community and commits to a public marketing program in the future as a condition of its CON. IHS of Florida committed to performing at least one community awareness activity per calendar quarter as a condition of its application. It also indicated, moreover, that it would work to develop public service announcements and marketing programs with the help of public health units or any other appropriate vehicle. The latter indication, however, was not made a condition of the application. Putnam provides educational services to the community, its employees, patients and patients’ families, including the provision of pamphlets, and presenting audio and video tapes as appropriate to the patient and their families. Putnam, however, did not condition its application on a commitment to a public marketing program or commit to such a program in any other way in its application. RHA stated it would accept a condition on its CON to provide a public marketing program for services, including pamphlets, public service announcements and other community awareness activities. It did not reflect such a condition on the “Conditions” page of the application, but, given its statement that it would accept such a condition, there is nothing to prevent the agency from imposing such a condition should it grant RHA’s application. Access Requirements Preference 5 is, “[p]reference should be given to a home health services CON applicant who agrees, as a condition of the CON, to meet the following access requirements for each county in which services are provided: 1) 24 hour local telephone call (or toll-free) contact. 2) 24 hour call/response capability. 3) Maximum on one (1) hour response time following call. Care First currently meets the requirements of Preference 5 in the counties in which it now provides services, and has committed to continue to meet these requirements as a Medicare certified home health agency in all counties in which it will provide services. Care First has made as conditions of its CON, provision for 24-hour accessibility by answering service and installation of a toll-free access line and maintenance of a log of calls during the hours the agency is closed, including documenting of response time to each call. IHS of Florida conditioned grant of its CON on a 30 minute response time, and 24-hour phone availability on a toll-free hot line. Putnam presently provides the services in this preference in its District 3 Medicare certified home health agency and agrees to meet this preference within 90 days of initiating services. It did not, however, make a commitment to meet this preference on the “conditions,” page of its application. There is nothing to prevent the agency from making Putnam’s CON, if granted, conditional upon compliance with this preference. RHA has agreed to have its CON conditioned to meet the access requirements of Preference 5. 2. State Health Plan Service to Patients with AIDS The first preference under the State Health Plan is that “[p]reference shall be given to an applicant proposing to serve AIDS patients.” All four applicants are committed to serving AIDS patients. Full Range of Services. Preference 2 of the State Health Plan is “[p]reference shall be given to an applicant proposing to provide a full range of services, including high technology services, unless these services are sufficiently available and accessible in the same service area." There are currently 11 hospital-based Medicare certified home health agencies in District 2. Several of them provide the high tech services which are sometimes needed by discharged hospital patients. Very few referrals for high tech care have been received by D. G. Anthony or Care First since May, 1995, and there is no indication such services are not available in District 2. Care First has identified, however, an unmet need for the pediatric and pre-hospice home health agency services and has conditioned its application on the provision of those services to the community. IHS of Florida proposes, among other high tech services, infusion therapies, pain management therapies and chemotherapy. There is no evidence, however, that these therapies are not available in District 2. The same is true of Putnam as to the high tech therapies it proposes to provide. There is no evidence that they are not available in District 2. Although RHA indicated in its application that it intended to provide the entire range of services that a home health agency can provide, again, there is not evidence that they are not available in District 2. Disproportionate Share Provider History Preference 3 is “[p]reference shall be given to an applicant with a history of serving a disproportionate share of Medicaid and indigent patients in comparison with other providers within the same AHCA service district and proposing to serve such patients within its market area." Care First, having been formed in March, 1996, did not have a history of providing Medicaid and indigent patients. Care First has committed to 7% of its visits to Medicaid patients, well above the average of existing District 2 agencies of 2-3% Medicaid. Care First has committed to 1% of its visits to charity/uncompensated care. IHS of Florida has committed to 5% Medicaid and 1% charity care. Like Care First, IHS of Florida, as a newly formed corporation, does not have a history of serving a disproportionate share of Medicaid/indigent care patients. Putnam’s commitment is 3% to Medicaid and 1% to charity care. This commitment will be met through its sister home health agency and not the Medicare-certified home health agency for which the CON is sought. RHA has committed to set aside 5% total annual visits to Medicaid patients and 1% of annual visits to indigent care. It has a history of providing a disproportionate share of services to Medicaid patients at its two skilled nursing facilities in District 2, Riverchase Care Center in Quincy and Brynwood Center in Monticello. Underserved Counties Preference 4 is [p]reference shall be given to an applicant proposing to serve counties which are underserved by existing home health agencies. The rural areas of District 2 are traditionally underserved. Putnam will serve Bay County, an underserved county; the three other applicants will serve rural areas of more than one county in District 2. Consumer Survey Data Preference 5 is "[p]reference shall be given to an applicant who makes a commitment to provide the department with consumer survey data measuring patient satisfaction." Care First has committed to providing such data to the agency. IHS of Florida will maintain a data base of results of patient satisfaction surveys and make them available to the agency, just as it already does. Putnam will make available to the agency the results of surveys similar to surveys measuring patient satisfaction Putnam has already developed. Putnam has conditioned its application on providing these surveys to the agencies as well as surveys measuring physician satisfaction. RHA has cited on its “Conditions” page, “. . . (it) will provide the Agency for Health Care Administration with consumer survey data.” Quality Assurance Program and Accreditation The State Health Plan’s Sixth Preference is “[p]reference shall be given to an applicant proposing a comprehensive quality-assurance program and proposing to be accredited by either the National League for Nursing or the Joint Commission on Accreditation of Healthcare Organizations." Care First included in its application a copy of its Quality Assurance Program which has been in use since May, 1995. The program meets the state and federal licensure and certification requirement and the stringent requirements of JCAHO. Moreover, Care First has conditioned its application upon JCAHO accreditation. IHS of Florida submitted documentation regarding its Quality Assurance Program through initiatives such as Total Quality Management and Continuous Quality Improvement. It will seek accreditation from JCAHO within one year of receiving its CON. Putnam, an existing home health agency in District 3 since 1986, has over the years developed and refined a comprehensive quality assurance program which is above the industry standard. The District 3 agency, using its quality assurance program, has attained its JCAHO accreditation “with commendation,” a distinction received by less than 4% of all applicants. Putnam will seek accreditation from JCAHO for its District 2 operation within one year of receiving its CON. RHA is willing to condition its CON on the provision of a comprehensive quality assurance program and accreditation by the JCAHO. Need 1. Numeric Need Since there is no published fixed need pool applicable to this proceeding, the parties, other than the agency, developed their own methodologies for determining numeric need. Each of the methodologies employed by the parties was reasonable. After taking note of the statistics for actual patient visit growth in District 2 from 1991 to 1994, Michael Schwartz began with a conservative number of 60,000 new patient visits per year, a number half of the growth for the lowest growth year of that time period. Multiplying that number times the three horizon years of 1994-97 equals 180,000 new patient visits from 1994 which yields a need for 5.2 agencies. The reasonableness of numeric need in excess of four is supported by other factors. After the filing of the four applications at issue in this proceeding, there are two fewer Medicare-certified home health agencies with certificates of need in District 2. At the same time, home health care visits have been on the increase not only in the district as discussed, above, but in the state as well. Statewide, home health care visits grew from 18 million to 22 million between 1991 and 1994. The utilization of home health care agencies is increasing because of population growth and an increase in the number of visits per patient. The amount of time spent by patients in the hospital is decreasing. The decrease translates into increased need by patients for visits from home health agencies. The need for home health is going to continue to increase because it is a cost-effective alternative to nursing home placement and hospital care. From 1991 to 1994, the number of home health visits more than doubled: from 369,396 to 869,893. This trend continued in 1995. The recent significant growth in the utilization of home health agencies in District 2 is expected to continue. The growth is attributable not only to a population increase in the district but to increase in the use rate for home health agency services as well. The growth in use rates can be explained, in part, by the increase in the senior population (65 and older) and the pressure exerted by managed care for earlier hospital discharges and home health agency services as a viable alternative in some cases to inpatient treatment. The senior population in District 2 is reasonably expected to grow approximately 8% in the five years after 1996, with 15% growth expected reasonably in the 75 to 84 year old population and even higher growth, 25%, in the population over 84 years old. 2. Other Indications of Need Local physicians have experienced difficulty arranging for the existing home health agencies to provide services to patients located in remote areas of District 2. Specialized groups, such as AIDS patients, would, in all likelihood, benefit from additional home health agencies in District 2. Furthermore, a study conducted by IHS of Florida showed that the district has an unusually high rate of diabetes and in four counties has a diabetes death rate 100% greater than the statewide average. Well Springs home health agency is one of the two Medicare-certified home health agencies to cease providing Medicare-certified home health services after the four applicants in this proceeding filed the applications at issue here. Well Springs was licensed in all 14 counties of District 2 and had physical locations in Franklin, Gadsden, Bay, Leon, Liberty, Taylor and Madison Counties. It had a significant share of the District 2 Medicare certified home health agency market with 13.1% of the 1994 visits, the second highest in the District. With Well Springs discontinuing Medicare-certified home health agency services, a void was left for such services in District 2, particularly in those counties in which Well Springs had a physical presence.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Agency for Health Care Administration enter its final order granting CON Nos. 8380, 8381, 8382 and 8384 to RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., and Putnam Home Health Services, Inc., respectively. DONE AND ENTERED this 9th day of June, 1997, in Tallahassee, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1997. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5403 Richard Ellis, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 W. David Watkins, Esquire Watkins, Tomasello & Caleen, P.A. 1315 East Lafayette Street, Suite B Tallahassee, Florida 32301 Mark Emanuel, Esquire Panza, Maurer, Maynard & Neel NationsBank Building, Third Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308 Paul Amundsen, Esquire Amundsen & Moore 502 East Park Avenue Tallahassee, Florida 32301 Theodore E. Mack, Esquire Cobb Cole & Bell 131 North Gadsden Street Tallahassee, Florida 32301
The Issue The issue is whether the application of A Professional Nurse, Inc., (APN) for Certificate of Need No. 4636 to operate a home health agency in HRS District IX should be granted. STIPULATION CONCERNING APPLICABLE STATUTES In the prehearing stipulation, the parties agreed that the issues to be litigated are only those relating to the need for an additional home health agency in the HRS service district. The other criteria found in Section 381.494(6)(c), Florida Statutes, which the Department is required to take into consideration in granting certificates of need, are not in dispute. The only portions of the statute and rules which must be examined here are Section 381.494(6)(c)1., 2. and 12, Florida Statutes, and Rule 10.5.011(1)(b)1., Florida Administrative Code.
Findings Of Fact APN's Applications This case arises from the application by APN for Certificate of Need No. 4636, filed in June, 1986. In 1983, APN had filed another application for a certificate of need when the Department had imposed an administrative moratorium on applications. HRS originally denied the application but during the pendency of formal proceedings, reconsidered and would have granted the application, but other parties intervened. APN failed to respond to certain discovery (it did not have an attorney) and at the final hearing therefore was not allowed to present evidence. As a result, APN's 1983 application was denied. With respect to the current application, based upon its June, 1986, filing, under Rule 10.5.008, Florida Administrative Code, a decision would have been due in October of 1986. On September 16, 1986, an employee of the Department requested an extension of time for the Department's decision until January, 1987, because the Department had no rule methodology for determining need for home health agencies, but hoped to have one by January, 1987. APN agreed to a three-week extension but did not agree to defer a decision until January, 1987. In November, 1986, the Department issued a state agency action report proposing to deny the application. At no time during the application process was APN told how need for an additional home health agency would be determined during departmental review in the absence of any need methodology adopted by departmental rule. There were no other applications in HRS District IX filed in the same batch as this application, and there have been no petitions to intervene in this proceeding. APN And Its Related Companies APN is an existing, licensed home health agency which has operated in District IX for nine years. It has applied for a certificate of need in order to qualify as a Medicare and Medicaid provider. Without the certificate of need, it cannot receive Medicare or Medicaid reimbursement for its services. Due to the recent opening of psychiatric hospitals in District IX and the need for follow-up care after such hospitalization, there is a need in District IX for psychiatric home health services. APN has particular expertise in psychiatric nursing. The requirements APN met for licensure are nearly identical to those for certification. There is no capital expenditure necessary for the Medicare and Medicaid certification. APN also started a related company, Professional Staffing Services, which provides nurses for hospitals, nursing homes and other home health agencies. These clients have called upon Professional Staffing Services when they are short of staff. APN currently receives referrals of persons who need home health services which come from hospitals, social service departments, hospital discharge planners. It also has a plan with hospitals for providing indigent care called "Patient Care Partnership Plan" under which it provides two hours of indigent care for each 40 hours of private duty care obtained through a hospital. There are people who could benefit from home health services who are unaware that they qualify to be reimbursed by Medicare for home health services. There are even some physicians who are not familiar with the availability of home health services. Because of the relatively low level of public awareness of the availability of home health services, patients are sometimes placed in nursing homes rather than deceiving health services at home, which would be less expensive and more cost-effective than nursing home care. Method For Determining Need For Home Health Services in District IX Because there is no rule methodology for determining the need for home health services, the method for determining need used by the Department is subject to de novo review in this proceeding. Section 120.57(1), Florida Statutes (1985). The Department presented no evidence of the number of home health agencies it believes are needed in District IX. In the absence of a rule it has no way of quantifying need. The Department has had difficulty in developing a methodology for determining need for home health agencies. Its first rule promulgated in 1977 was known as the Rule of Three Hundred. That rule is determined to be invalid. See Johnson and Johnson Home Health v. Department of Health and Rehabilitative Services, Final Order, DOAH Case 83-2170R, affirmed 447 So.2d 361 (Fla. 1st DCA 1984). Thereafter, the Department used a nonrule policy requiring an applicant to prove that people were not being served in order to justify a certificate of need for a new home health agency. That policy was applied by the Department at the time of the hearing in Upjohn v. Department of Health and Rehabilitative Services, 496 So.2d 147 (Fla. 1st DCA 1986) and was criticized by the court. The Department's current policy of requiring applicants to show that people are not being served is unreasonable. Existing home health agencies have the ability to expand their staff as demand increases. This would preclude the entry of any new competitor into the market if the rule for determining need for additional agencies is that there must be current potential users who are unserved. The Department's assertion that additional need can be shown by surveys of doctors or hospital discharge planners which indicate an inability to obtain home health services places an unreasonable, unattainable burden on an applicant. The expert retained by the Department to help it develop a rule methodology attempted to survey discharge planners and received only a 25 percent response rate, which is unreliable. The Department's assertion that the applicant could show a waiting list as an indication of need is also unreasonable. Those in need of home health services who cannot obtain them do not wait, they obtain alternate services, by such means as entering a nursing home. Finally, to the extent that patients or even physicians are unaware of the availability of home health services, it is not possible to structure any survey to quantify that pool of unmet need. APN's Need Methodology The testimony of the health planning expert presented by APN, Eugene Nelson, was generally persuasive. He advocated an assessment of need based upon a use rate formula. Nelson found that the patients used home health services at varying rates throughout the state, with greater use in the southeast, less use in the mid-portion of the state, and lower use in north Florida. He therefore suggested the use of different use rates in north, central and south Florida. District IX is in the southern area. The data on the use of home health services by patients is not reported to the Department or to local health councils, and is therefore not readily available. It can be obtained, however, from Medicare financial intermediaries based on reimbursement reports those intermediaries process on behalf of the federal government. Only the Department can obtain this data. Intermediaries will not supply it to CON applicants on request. The most recent data which is complete is 1984 data. When this use rate is applied to the population over age 65, one can derive the expected number of Medicare home health visits for 1987. An HRS service district is the appropriate planning unit. By multiplying the use rate in south Florida times the District IX population over 65 (2.4446 x 268,056) the total expected visits for 1987 are 655,290. Even using the lower, and therefore more conservative, statewide average use rate yields 508,154 visits (1.8957 x 268,056). Nelson then converted the number of visits to a reasonable number of agencies based upon the number of visits each agency ought to be able to perform. There is little economy of scale in home health agencies and it is therefore difficult to determine an optimum agency size. Nelson discussed data showing reasonable agency size ranges from 9,000 to 15,000 visits per year. This range of agency size is accepted as reasonable. Using 15,000 visits as the appropriate agency size (which is conservative), there would be a need for 44 agencies in District IX if the south Florida use rate is applied, and 34 agencies needed if the statewide use rate is applied to the appropriate population. There are currently 25 existing home health agencies which have certificates of need in District IX. This methodology shows a net need for between nine and 19 new home health agencies. APN's use rate formula for determining the number of home health agencies is consistent with the goals and priorities found in the State Health Plan and the Local Health Plan. In this case, one of the significant objectives of the State Health Plan is Objective 1.5 which is To assure that the number of home health agencies in each service area promote the greatest extent of competition consistent with reasonable economies of scale by 1987. RECOMMENDED ACTION: 1.5a: Develop a need methodology based on historic cost data for Florida Home Health Agencies. Because it currently has no rule methodology for determining need for home health agencies, the Department has contracted with Dr. Elton Scott to draft a formula for determining need. The preliminary report of Dr. Scott recommends a methodology based on the historical Medicare use rate and is generally similar to one presented by APN. Until it adopts a new methodology by rule, the current policy of the Department is to request extensions of time for CON review from applicants rather than process the applications. This results in a de facto moratorium. No applications have been approved under the current policy of requiring the applicant to prove unmet need. In the record of this case the Department has failed to present any qualified health care expert to give any opinion about appropriate health care planning for home health agencies or to justify its current policy of requiring applicants to present evidence of need on an anecdotal basis. The policy is unreasonable for reasons stated in Finding of Fact 15.
The Issue The issues presented concern the question of the Petitioner's entitlement to amend its license to expand its geographic service area to include Hillsborough and Manatee Counties with a base of operation being its existing offices in Pinellas County.
Findings Of Fact Petitioner is a home health care provider in Florida. Subsequent to April 30, 1976, it applied for and was granted a statement of need to serve patients in Pinellas County, Florida. Statement of Need No. 450 was issued on July 13, 1976. At that time, Global was not requesting opportunities to offer service for patients in other counties within the district, those outlying counties being Pasco, Hillsborough and Manatee. Consequently, the focus of the review related to Pinellas County, notwithstanding the fact that the reviewing agency, Florida West Coast Health Planning Council, Inc. had as its responsibility consideration of health care needs in the aforementioned four counties. Although the license that was granted to the Petitioner as a result of the Statement of Need did not on its face limit the geographic area of service, the license opportunity only pertained to Pinellas County. The license from the Respondent for the Pinellas service was issued in September 1976, following the grant of the Statement of Need by the local HSA. Petitioner's Exhibits No. 22 and No. 41, admitted into evidence describe this Statement of Need review process and evidence the fact that the review only encompassed Pinellas County. In 1977, Petitioner indicated to the Respondent that it had an interest in serving patients in Pasco County, on the basis of a perceived need for home health care services for those patients. At about this time, Petitioner also expressed an interest in serving patients in Hillsborough and Manatee counties. (The Petitioner did not provide home health services in Manatee and Hillsborough Counties prior to April 30, 1976, nor did it have a Medicare Provider Number issued by the United States Department of Health and Human Services, formerly Health, Education and Welfare, prior to that date). Out of this process litigation occurred and in the course of the conflict, the request to serve patients in Hillsborough and Manatee Counties was dropped. The effect of the Petitioner's dismissal of its request to operate in Manatee and Hillsborough Counties did not foreclose future efforts to expand its service to Hillsborough and Manatee patients based upon the outcome of the 1977-78 proceeding nor did that proceeding establish the right of the Petitioner to serve the Hillsborough and Manatee patients. The outcome of the litigation was an expansion of the Petitioner's license opportunity to include patients in Pasco County, without the necessity to obtain a Certificate of Need to operate in Pasco County. The expansion of services into Pasco County was not in keeping with the Statement of Need which had been issued for Pinellas County. The reason for granting the license in Pasco County was premised upon the Petitioner's reliance on specific permission which had been given by the Respondent to the Petitioner to operate in Pasco County, which permission was later disclaimed and finally reinstated by a formal Section 120.57(1), Florida Statutes, hearing. In essence, the license was afforded Petitioner upon the theory of equitable estoppel. Intervenor's composite Exhibit No. 2, admitted into evidence contains the Recommended Order and Final Order related to the Pasco County expansion of services. Subsequent to the expansion referred to in the previous paragraph, Global requested recognition of two subunits to be placed in Pasco County. One was to be located in the New Port Richey/Port Richey area and the other was to be located in the Zephyrhills/Dade City area. The application may be found as Respondent's exhibit No. 2, admitted into evidence. This expansion was the subject of Certificate of Need review both at the local level by the Florida Gulf Health Systems Agency and by the Respondent in its office of Community Medical Facilities. The State Agency Action Report related to this application may be found as Respondent's Exhibit No. 4, admitted into evidence and contains review comments for all four counties in the related health service area, namely Pinellas, Pasco, Manatee and Hillsborough; however, the primary emphasis of the project review pertained to Pasco and Pinellas Counties. Following review, proposed agency action in the way of the issuance of a Certificate of Need was to the effect that the two subunits should be granted Certificate of Need No. 2072. A copy of that proposed agency action (certificate) may be found as Respondent's Exhibit No. 5, admitted into evidence. This proposed agency action granting a Certificate of Need for two subunits was challenged by the present Intervenor leading to a joint stipulation for settlement between the present parties to this action related to the Pasco County subunits. A copy of the joint stipulation may be found in Petitioner's Exhibit No. 25. That joint stipulation was accepted by the Secretary of the Department of Health and Rehabilitative Services through the entry of a final order on April 25, 1983, and per the order the Petitioner was left with one subunit, Certificate of Need No. 2072 for a Zephyrhills office in Pasco County. The subunit Certificate of Need did not contemplate service expansion into Manatee and and Hillsborough Counties from the remaining office. Independent of Petitioner's efforts to seek the subunit recognition, it determined to expand its service area into Hillsborough and Manatee Counties. In particular, these plans began to take shape in late 1982. The intended expansion does not entail the establishment of any offices or other plant, separate and apart from those in Pinellas and Pasco Counties as recognized with the issuance of the initial Statement of Need 450 and the Certificate of Need 2072, respectively. It is intended that Global provide the services in Hillsborough and Manatee Counties from its existing offices in Pinellas County. In the present hearing, the Petitioner has not indicated an intention to use the Pasco/Zephyrhills offices as the base of its operations in Hillsborough and Manatee Counties. Petitioner holds the opinion that the expansion into Hillsborough and Manatee Counties from its Pinellas County parent home health agency offices would not require Certificate of Need review. Consequently, it believes that it would be entitled to make that expansion simply by complying with other license requirements related to such expansion. In the alternative, Global urges that should a Certificate of Need be necessary before the expansion of service into the new counties, review has been performed upon the occasion of the issuance of the Statement of Need 450 and/or the issuance of the Certificate of Need No. 2072 for the subunit in Pasco County. Global also believes it is entitled to an amendment of its license allowing the expansion based upon its impression that similar permission has been granted other home health providers. After requesting provision of appropriate forms to accomplish the amendment to its license to allow expansion of services into Hillsborough and Manatee, there followed a series of letters between the parties, to include preliminary comments by the Respondent's staff members, some favorable to Petitioner's position, leading to an April 29, 1983, letter from Jay Kassack, Director, Office of Licensure and Certification, found as Petitioner's Exhibit No. 26, which advised the Petitioner that it was denied its expansion of service based upon failure to show evidence of compliance with Certificate of Need requirements set forth in Chapter 381, Florida Statutes, and Rule 10-5, Florida Administrative Code, and a subsequent letter of May 6, 1983, from Thomas J. Konrad, Administrator, Community Medical Facilities, Office of Health Planning and Development, found as Petitioner's Exhibit No. 29, which also denied the request for expansion based upon the inability to utilize the Statement of Need as a basis for expansion into Hillsborough and Manatee Counties, in that criteria of need had not been applied to Hillsborough and Manatee Counties by the Health Systems Agency when it reviewed and issued the 1976 Statement of Need. In the face of the denial of its request for licensure, the Petitioner sought and was provided this formal hearing. Based upon the belief that the necessary permission would be given to expand its service area into Hillsborough and Manatee Counties but prior to final decision by the agency on that request, Petitioner hired six additional nurses and began the development of training aids and other related matters dealing with the expansion of its service area at a cost of approximately $60,000. Those nurses could not be used to attend other patients already being served by the Petitioner. The agency had not promised that the license request would be granted and Global's understanding of the opportunities afforded by its existing license and Statement of Need and Certificate of Need recognition, together with the history of other applicants making similar requests for expansion did not entitle the Petitioner to undertake this development of services and expect to be granted permission to expand upon a theory of estoppel. In pursuing its hiring practices prior to the opportunity for the agency to speak finally to the request for expansion, Global did so at its own risk and did so not based upon sufficiently specific facts from the Department related to this application request to cause a change in its position after relying on those representations. The impetus for changing its position was provided by the applicant premised upon its presumptions related to the agency's response to the request for expansion, without allowing the agency the opportunity to review and announce its decision in this case. This circumstance is as contrasted with the 1977-78 case in which Global was allowed to expand its operations into Pasco County based upon the agency's initial action of condoning operations in Pasco County and then attempting to retract that permission. On this occasion, the agency has never countenanced the expansion of services into Manatee and Hillsborough Counties. From Respondent's point of view, the license denial is premised upon the use of an item referred to as "home health agency review matrix," a copy of which is found as Petitioner's Exhibit No. 1, admitted into evidence. In particular, reference is made to that portion related to expansion of a service area based upon the use of a Statement of Need. The language of that section says, "HSA Statement of Need remains valid. May expand HHA only in those counties in which criteria of need were applied by HSA." In essence, as indicated in the May 6, 1983, correspondence from Konrad, Petitioner's Exhibit No. 29, the Department was of the opinion that the criteria of need and the recognition of Petitioner by issuance of a Statement of Need No. 450, pertained only to Pinellas County. That perception is correct. A review of the record submitted to include the exhibits and testimony leads to the conclusion the criteria of need were not applied to examine counties other than Pinellas County when the Statement of Need was issued to the Petitioner. Therefore, according to the Department, Petitioner may not expand into Hillsborough and Manatee Counties without further Certificate of Need review related to Hillsborough and Manatee Counties. The Department began to use the matrix in March 1983 in its efforts to create an overview of its responsibilities in considering Certificates of Need and licensure related to home health care agencies. At the time of the final hearing in the instant case, the matrix served as a guide for considering requests to establish new home health agencies, to expand service areas and to establish subunits, depending upon the prior history of the home health agency as being "grandfathered" as a holder of a Medicare Provider Number from HEW prior to April 30, 1976; the holder of Statement of Need issued between 1975 and July 1977 or the holder of a Certificate of Need. The matrix assumes that the expansion of service area is an event requiring Certificate of Need review unless in the Statement of Need situation, as described, review criteria of need have been applied in the area where the home health agency intends its expansion. By contrast, in the instance of the grant of an original Certificate of Need for a new home health agency, there is a presumption that review has been made in all counties prior to the issuance of the Certificate of Need, therefore expansion may be made from that original facility into counties within that service area without the necessity of seeking a further Certificate of Need before offering services in outlying counties within the service area which were not being served before. The matrix makes no specific provision for the expansion of services from a subunit such as the Pasco County subunit held by the Petitioner. That question is not at issue in that the Petitioner does not seek expansion from its Pasco County subunit, so it is not necessary to address whether such expansion is allowed in keeping with the recognition of the subunit. The four county review involved in that recognition and grant of Certificate of Need and amended license, may not serve the secondary purpose of substituting for the criteria of need review contemplated in the Statement of Need process wherein criteria of need had to be examined in the subject counties in order to allow an expansion without the benefit of a Certificate of Need. Recognition of a subunit by the grant of a Certificate of Need is acceptance of a home health agency's base of operation through a semiautonomous entity and each successive subunit, according to the matrix, must undergo Certificate of Need review. Having refused to allow the recognition by issuance of a Certificate of Need for one subunit to form the basis for recognizing an additional subunit in the same county, notwithstanding the area wide review of criteria of need involved with the initial subunit, as expressed in the matrix, it follows that the subunit recognition of the Petitioner's Pasco County Operation not only may not form the basis of expansion, even if offered for that purpose, but may not serve to establish substituted data related to criteria of need in Hillsborough and Manatee Counties that was not forthcoming in the original review for the facility in Pinellas County at the time of the issuance of the Statement of Need. Assuming that the expansion of service from the original home health agency facility in Pinellas County as recognized through the Statement of Need process, without the establishment of a new home health agency, or subunit or fixed plant, by providing home health services in the residence of the patients in Hillsborough and Manatee Counties as delivered by employees of the petitioner is an activity which must undergo Certificate of Need review, the Department's utilization of the matrix to insure that a project undergo examination through the use of criteria of need is reasonable. Recognition of this treatment of the issue of review takes into account the distinction between the presumptions related to the review process in the Certificate of Need analysis by the Department in which full service area review for all counties is contemplated as contrasted with the possibility that the Statement of Need process by the local Health Planning Agency may have been accomplished on less than a full service area review, as was the situation with Global. Given this distinction, the matrix is not found to be at odds with the Legal Opinion 82-2, authored by Staff Attorney, James M. Barclay, dated March 9, 1982, in which significance is placed upon the fact that in the Certificate of Need review process health service area wide review is made and therefore expansion within the service area from the original facility is acceptable given the area wide review related to the proposed home health agency. The memorandum and matrix pertaining to Certificates of Need are consistent. A copy of the memorandum is found as Petitioner's Exhibit No. 3, admitted into evidence. The memorandum does not, from a review of its language and statement of applicable statutes and rules, address the Statement of Need circumstance. Petitioner has alluded to the agency's alleged inconsistent treatment of its request for expansion and amendment to its license allowing services to be offered in Manatee and Hillsborough Counties from its Pinellas County facility, compared to other home health agencies. Materials related to those other requests may be found in Petitioner's Exhibit Nos. 34-39, 41 and 42, admitted into evidence. All of those requests by home health agencies are consistent with the present denial, with the exception of Roberts Nursing. This consistency pertains to the fact that certain expansions were allowed due to special circumstances such as the need to provide service to patients in DeSoto County based upon the abandonment of patients by an ongoing health care provider, special circumstances related to certain counties in North Florida that were being served by Georgia health care providers and the fact that expansion in some instances was based upon the existence of a Certificate of Need as opposed to Statement of Need. The Roberts' situation is either the product of a mistake or is contrary to the present process of analysis of requests for expansions on the basis of Statements of Need. Petitioner has not shown that the expansion without Certificate of Need made by Roberts was pursuant to a contrary policy choice that was applied to Petitioner. On the other hand, there is some testimony that the Roberts' situation was possibly allowed based upon the belief that Roberts was expanded on the basis of a Certificate of Need as opposed to a Statement of Need, when in fact Roberts, like Global, held only a Statement of Need. Whatever the explanation, the treatment of the Roberts' request does not cause the grant of a license to Petitioner. One of the other home health care providers who sought expansion opportunities as found in Petitioner's Exhibit No. 38, admitted into evidence, was Independent Home Health Services, Inc., which was denied its opportunity based upon the agency's assertion that the Statement of Need originally granted that provider only looked at need for Pinellas County and expansion into Pasco County would require a Certificate of Need. Finally, Global has not asserted its entitlement to licensure based upon proof that it has satisfactorily addressed the criteria of need dealing with home health care offered in Hillsborough and Manatee Counties as such, related to a presentation separate and apart from the review process that may have been pursued prior to the present controversy. If it is the intention of the Petitioner to seek a license based upon satisfactorily addressing criteria of need, in substance, related to the offering of services in Hillsborough and Manatee Counties, that showing has not been successfully made on this occasion.
Conclusions Having reviewed the Notice of Intent to Deny the renewal license application for a home health agency, attached hereto and incorporated herein (Ex. 1), and other matters of records, the Agency for Health Care Administration ("Agency") finds and concludes as follows: By Order dated August 26, 2008, the Administrative Law Judge closed its files in the above-styled case. Petitioner filed a status report withdrawing the application for renewal oflicense on August 20, 2009, attached hereto and incorporated herein (Ex. 2). The denial of the renewal application for Petitioner home health agency is upheld and the application for license renewal has been withdrawn. Upon consideration of the foregoing, it is ORDERED that the Agency's file is hereby closed. DONE and ORDERED at Tallahassee, Leon County, Florida this ffj day of ,2009. 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 PROCEEDING SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN THIRTY (30) DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Monica L. Rodriguez Attorney for Petitioner Dresnick & Rodriguez, P.A. One Datran Center 91 South Dadeland Blvd, Suite 1610 Miami, Florida 33156 (U.S. Mail) Nelson E. Rodney Assistant General Counsel Agency for Health Care Administration 8350 NW 52nd Terrace, Suite #103 Miami, Florida 33166 (Interoffice Mail) Home Care Unit Agency for Health Care Administration' 2727 Mahan Drive, MS #34 Tallahassee, Florida 32308 (Interoffice Mail) Stuart M. Lerner Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (U.S. Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 2 (Interoffice Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true copy of the foregoing was sent to the above-named addressees by U.S. Mail, or the method designated, on thisLday of s5xpf 009. Richard Shoop. Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308-5403 (850) 922-5873 3 CHARLIE CRIST GOVERNOR June 23, 2008 Kelly Marie Damas, Admin istrator- 1 / / ·.:;, '. TEHC LLC '- -...· , .. ' ' 3317NW10thTerrSte404 i' r:;_'.'./fl Fort Lauderdale, Fl 33309 J:.:·:>r 1.< \ ii{;;_ License Number: 204390961 Case#: 2008007748 NefltE't)iKIN1'ENT:·q,oDENY It is the decision of this Agency that the application for renewal licensure as a home health agency, for TEHC, LLC., located at 3317 NW 10th Terrace, Suite 404, Fort Lauderdale, Fl 33309, is DENIED. The basis for this action is pursuant to authority of Section 120.60 Florida Statutes (F.S.) and Section 408.815 (1), (c) and (d), F.S. which states as follows: (1) In addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license ... include any of the following actions by a controlling interest: A violation of this part, authorizing statutes, or applicable rules. A demonstrated pattern of deficient performance. The home health agency did not demonstrate compliance with Chapter 400, Part III, F.S. and the state home health agency rules, Chapter 59A-8, Florida Administrative Code (F.A.C.) at the home health agency licensure survey conducted Mr..y 5 through May 8, 2008. The plan of correction due June 7, 2008 as submitted to the Agency's Field Office was not acceptable. Non compliance was found in the following areas: The home health agency failed to ensure the Director of Nursing established and conducted an on-going quality assurance _program that evaluated the effectiveness of all the provided service for consistency with professional standards and anticipated outcomes. (H 224) The pertinent statutes and rules that apply include the following: 59A-8.0095(2) (c), F.A.C. "Director of Nursing: (c) The director of nursing shall establish and conduct an ongoing quality assurance program which assures: 2727 Mahan Drive,MS#34 Tallahassee, Florida 32308 EXHIBIT j Visit AHCA Online at http://ahca.myflo rida.com 'Tehc LLC Page 2 · ·-:June 23;·2008· Case assignment and management is appropriate, adequate, and consistent with the plan of care, medical regimen and patient needs; Nursing and other services provided to the patient are coordinated, appropriate, adequate, and consistent with plans of care; All services and outcomes are completely and legibly documented, dated and signed in the clinical service record; Confidentiality of patient data is maintained; and Findings of the quality assurance program are used to improve services." The home health agency failed to ensure that the Registered Nurse (RN)provide case management for 5 of 17 nursing and therapy patients. This was evidenced by: failure to provide an assessment prior to documenting a start of care comprehensive assessment for one patient; failure to provide supervision for the Licensed Practical Nurse (LPN) in the performance of duties for two patients and failure to assure progress reports were made to the physician for patients receiving nursing services when the patient's condition changed for two patients. The pertinent statutes and rules that apply include the following: 59A-8.0095 (3) (a), F.A.C. "Registered Nurse. A registered nurse shall be currently licensed in the state, pursuant to Chapter 464, F.S., and: Be the case manager in all cases involving nursing or both nursing and therapy care. Be responsible for the clinical record for each patient receiving nursing care; and Assure that progress reports are made to the physician for patients receiving nursing services when the patient's condition changes or there are deviations from the plan of care." The home health agency failed to ensure that the RN retained full responsibility for the care given and making supervisory visits to the patient's home for 3 of 17 sampled patients as evidenced by failure to provide supervision for the LPN in the performance of duties for two patients; failure to provide supervision for the Home Health Aide (Aide) and failed to prepare a written Aide assignment/instructions for services to be provided to the patient for 3 patients. (H 231) The pertinent statutes and rules that apply include the following: 59A-8.0095 (3) (b), F.A.C., "Registered Nurse. A registered nurse may assign selected portions of patient care to licensed practical nurses and home health aides but always retains the full responsibility for the care given and for making supervisory visits to the patient's home." The home health agency failed to provide supervision for the LPN in the perfonnance of duties for 2 of 17 patients. (H 235) Tebc LLC Page 3 --+---- ----:June-23--;-2008·--------- ·-- --------- --- The pertinent statutes and rules that apply include the following: 59A-8.0095 (4) (a), F.A.C., "Licensed Practical Nurse. A licensed practical nurse shall be currently licensed in the state, pursuant to Chapter 464, F.S., and provide nursing care assigned by and under the direction of a registered nurse who provides on-site supervision as needed, based upon the severity of patients medical condition and the nurse's training and experience. Supervisory visits will be documented in patient files. Provision shall be made in agency policies and procedures for annual evaluation of the LPN's performance of duties by the registered nurse." The home health agency failed to ensure the LPN reported any changes in the patient's condition to the RN and document the changes in the patient's clinical record for 1 of 17 sampled patients. (H 236) The pertinent statutes and rules that apply include the following: 59A-8.0095 (4) (b), F.A.C., "Licensed Practical Nurse A licensed practical nurse shall: Prepare and record clinical notes for the clinical record; Report any changes in the patient's condition to the registered nurse with the reports documented in the clinical record; Provide care to the patient including the administration of treatments and medications; -------and --- , ---------------- , -------------, ------------------ -------------·· Other duties assigned by the registered nurse, pursuant to Chapter 464, F.S." The home health agency failed to ensure that the care provided followed the plan of treatment for 11 of 17 sampled patients. The home health agency also failed to ensure a verbal order obtained by a home health agency nurse was put into writing and signed by the attending physician for 1 of 17 sampled patients. (H 302) The pertinent statutes and rules that apply include the following: Section 400.487 (2) F.S., "When required by the provisions of chapter 464; part I, part III, or part V of chapter 468; or chapter 486, the attending physician, physician assistant, or advanced registered nurse practitioner, acting within his or her respective scope of practice, shall establish treatment orders for a patient who is to receive skilled care. The treatment orders must be signed by the physician, physician assistant, or advanced registered nurse practitioner before a claim for payment for the skilled services is submitted by the home health agency. If the claim is submitted to a managed care organization, the treatment orders must be signed within the time allowed under the provider agreement. The treatment orders shall be reviewed, as frequently as the patient's illness requires, by the physician, physician assistant, or advanced registered nurse practitioner in consultation with the home health agency." 'Tehc LLC Page 4 _June 2},-200&------- ----- Chapter 59A-8.0215(2), F.A.C., "Home health agency staff must follow the physician, physician assistant, or advanced registered nurse practitioner's treatment orders that are contained in the plan of care. If the orders cannot be followed and must be altered in some way, the patient's physician, physician assistant, or advanced registered nurse practitioner must be notified and must approve of the change. Any verbal changes are put in writing and signed and dated with the date of receipt by the nurse or therapist who talked with the physician, physician assistant, or advanced registered nurse practitioner's office." The home health agency failed to ensure 9 of 17 patients were advised of the payment for home health agency services before care was started and were clear about the payor source and any charges required from the patient. (H 304) The pertinent statutes and rules that apply include the following: Section 400.487 (1), F.S., "Services provided by a home health agency must be covered by an agreement between the home health agency and the patient or the patient's legal representative specifying the home health services to be provided, the rates or charges for services paid with private funds, and the sources of payment, which may include Medicare, Medicaid, private insurance, personal funds, or a combination thereof. A home health agency providing skilled care must make an assessment of the patient's needs within 48 hours after the start of services." Chapter 59A-8.020 (2), F.A.C., "At the start of services a home health agency must establish a written agreement between the agency and the patient or client or the patient's or client's legal representative, including the information described in Section 400.487(1), F.S. This written agreement must be signed and dated by a representative of the home health agency and the patient or client or the patient's or client's legal representative. A copy of the agreement must be given to the patient or client and the original must be placed in the patient's or client's file." Chapter 59A-8.020 (3), F.A.C., "The written agreement, as specified in subsection (2) above, shall serve as the home health agency's service provision plan, pursuant to Section 400.491(2), F.S., for clients who receive homemaker and companion services or home health aide services which do not require a physician, physician assistant, or advanced registered nurse practitioner's treatment order. The written agreement for these clients shall be maintained for one year after termination of services." The home health agency failed to demonstrate effective communication between interdisciplinary team members to coordinate services as outlined in the plan of care for 3 of 17 'patients and failed to ensure that 8 of 17 sampled patients received the skilled nursing services in accordance with the physician's VvTitten plan of care. (H 306) The pertinent statutes and rules that apply include the following: 'Tehc LLC Page 5 --·-- June 23, 20-08 ··· - ----- Section 400.487 (6), F.S., "Tl1e skilled care services provided by a home health agency, directly or under contract, must be supervised and coordinated in accordance with the plan of care." The home health agency failed to ensure the registered nurse completed the initial evaluation visit for 1 of 17 patients. The Director of Nursing who signed the initial evaluation visit never made a home visit to the patient. (H 307) The pertinent statutes and rules that apply include the following: 59A-8.008 (1), F.A.C.., "In cases of patients requiring only nursing, or in cases requiring nursing and physical, respiratory, occupational or speech therapy services, or nursing and dietetic and nutrition services, the agency shall provide case management by a licensed registered nurse directly employed by the agency.'' The home health agency failed to provide written notice for tenninating home health services to 1 of 3 sampled patients. There was no written notification regarding the date of termination; reason for termination or a referral to another agency with a plan for continued services prior to the termination. (H 316) The pertinent statutes and rules that apply include the following: Chapter 59A-8.020 (4), F.A.C., "When the agency terminates services for a patient or client needing continuing home health care, as determined by the patient's physician, physician assistant, or advanced registered nurse practitioner, for patients receiving care under a physician, physician assistant, or advanced registered nurse practitioner's treatment order, or as determined by the client or caregiver, for clients receiving care without a physician, physician assistant, or advanced registered nurse practitioner's treatment order, a plan must be developed and a referral made by home health agency staff to another home health agency or service provider prior to termination. The patient or client must be notified in writing of the date of termination, the reason for termination, pursuant to Section 400.491, F.S., and the plan for continued services by the agency or service provider to which the patient or client has been referred, pursuant to Section 400.497(6), F.S. This requirement does not apply to patients paying through personal funds or private insurance who default on their contract through non-payment. The home health agency should provide social work assistance to patients to help them determine their eligibility for assistance from government funded programs if their private funds have been depleted or will be depleted." The home health agency failed to develop a plan of care for 6 of 17 sampled patients that included all of the required items needed to appropriately serve patients including goals to support the physician's treatment orders, level of staff to provide the services to reach the goals, and the frequency of visits to conduct the services by appropriate home health agency staff. (H 320) Tehc LLC Page 6 -June 23, 2008 The pertinent statutes and rules that apply include the following: Section 400.487 (2). f.S., "When required by the provisions of chapter 464; part I, part III, or part V of chapter 468; or chapter 486, the attending physician, physician assistant, or advanced regis1ered nurse practitioner, acting within his or her respective scope of practice, shalJ establish treatment orders for a patient who is to receive skilled care " Chapter 59A-8.0215 (1), F.A.C., "A plan of care shall be established in consultation with the physician, physician assistant, or advanced registered nurse practitioner, pursuant to Section 400.487, F.S., and the home health agency staff who are involved in providing the care and services required to carry out the physician, physician assistant, or advanced registered nurse practitioner's treatment orders. The plan must be jncluded in the clinical record and available for review by all staff involved in providing care to the patient. The plan of care shall contain a list of individualized specific goals for each skilled discipline that provides patient care, with implementation plans addressing the level of staff who will provide care, the frequency of home visits to provide direct care and case management." The home health agency failed to demonstrate evidence that patients were informed in advance about any changes to the plan of care prior to implementation of the changes for 1 of 17 patients. (H 321) The pertinent statutes and rules that apply include the following: Chapter 59A-8.0215 (3), F.A.C., "The patient, caregiver or guardian must be informed by the home health agency personnel that: He has the right to be informed of the plan of care; He has the right to participate in the development of the plan of care; and He may have a copy of the plan if requested." The home health agency failed to maintain a clinical record in accordance with accepted professional standards for 12 of 17 patients. (H 350) The pertinent statutes and rules that apply include the following: Section 400.491 (1), F.S,, "The home health agency must maintain for each patient who receives skilled care a clinical record that includes pertinent past and current medical, nursing, social and other therapeutic information, the treatment orders, and other such information as is necessary for the safe and adequate care of the patient. When home health services are terminated, the record must show the date and reason for termination " 'Tehc LLC Page 7 June 23,-2008 The home health agency failed to include all of the required items in the discharged patient clinicai records for 3 of 3 patients. There were no tem1ination summaries as required. (H 356) The pertinent statutes and rules that apply include the following: Chapter 59A-8.022(5), F.A.C., "Clinical records must contain the following: Source ofreferral; Physician, physician assistant, or advanced registered nurse practitioner's verbal orders initiated by the physician, physician assistant, or advanced registered nurse practitioner prior to start of care and signed by the physician, physician assistant, or advanced registered nurse practitioner as required in Section 400.487(2), F.S. Assessment of the patient's needs; Statement of patient or caregiver problems; Statement of patient's and caregiver's ability to provide interim services; Identification sheet for the patient with name, address, telephone number, date of birth, sex, agency case number, caregiver, next of kin or guardian; Plan of care or service provision plan and all subsequent updates and changes; Clinical and service notes, signed and dated by the staff member providing the service which shall include: Initial assessments and progress notes with changes in the person's condition; Services rendered; Observations; Instructions to the patient and caregiver or guardian, including administration of and adverse reactions to medications; (i) Home visits to patients for supervision of staff providing services; G) Reports of case conferences; (k) Reports to physicians, physician assistants, or advanced registered nurse practitioners; (1) Termination summary including the date of first and last visit, the reason for termination of service, an evaluation of established goals at time of tennination, the condition of the patient on discharge and the disposition of the patient." The home health agency failed to submit their comprehensive emergency management plan to the local county health department for review and approval. (H 376) The pertinent statutes and rules that apply include the following: Section 400.497(8) (c), F.S. "Preparation of a comprehensive emergency management plan pursuant to s. 400.492. (c) The plan is subject to review and approval by the county health department. During its review, the county health department shall contact state and local health and medical stakeholders when necessary. The county health department shall complete its review to . Tehc LLC Page 8 - --June 23.1008 ensure that the plan is in accordance with the criteria in the Agency for Health Care Administration rules within 90 days after receipt of the plan and shall approve the plan or advise the home health agency of necessary revisions. If the home health agency fails to submit a plan or fails to submit the requested information or revisions to the county health department within 30 days after vvTitten notification from the county health department, the county health department shall notify the Agency for Health Care Administration. The agency shall notify the home health agency that its failure constitutes a deficiency, subject to a fine of $5,000 per occurrence. If the plan is not submitted, information is not provided, or revisions are not made as requested, the agency may impose the fine." Chapter 59A-8.027 (2), F.A.C., "The plan, once completed, will be forwarded electronically for approval to the contact designated by the Department of Health." Section 400.492, F.S., "Each home health agency shall prepare and maintain a comprehensive emergency management plan that is consistent with the standards adopted by national or state accreditation organizations and consistent with the local special needs plan. The plan shall be updated annually ... " Chapter 59A-8.027(3) and (4), F.S., "The agency shall review its emergency management plan on an annual basis and make any substantive changes. (4) Changes in the telephone numbers of those staff who are coordinating the agency's emergency response must be reported to the agency's county office of Emergency Management and to the local County Health Department. For agencies with multiple counties on their license, the changes must be reported to each County Health Department ap.d each county Emergency Management office. The telephone numbers must include numbers where the coordinating staff can be contacted outside of the agency's regular office hours. All home health agencies must report these changes, whether their plan has been previously reviewed or not, as defined in subsection (2) above." · The home health agency failed to renew the application for a Certificate of Exemption that authorizes the performance of waived laboratory tests. (H 390) The pertinent statutes and rules that apply include the following: Section 483.091,F.S. "Clinical laboratory license.--A person may not conduct, maintain, or operate a clinical laboratory in this state, except a laboratory that is exempt under s. 483.031, unless the clinical laboratory has obtained a license from the agency A license is valid only for the person or persons to whom it is issued and may not be sold, assigned, or transferred, voluntarily or involuntarily, and is not valid for any premises other than those for which the license is issued. 483.031 Application of part; exemptions.--This part applies to all clinical laboratories within this state, except: (1) A clinical laboratory operated by the United States Government. (2) A clinical laboratory . Tehc LLC Page 9 · - · June 23;-2008 that performs only waived tests and has received a certificate of exemption from the agency under s. 483.106. (3) A clinical laboratory operated and maintained exclusively for research and teaching purposes that do not involve patient or public health service. 483. l 06 Application for a certificate of exemption.--An application for a cenificate of exemption must be made under oath by the owner or director of a clinical laboratory that performs only waived tests as defined ins. 483.041. A certificate of exemption authorizes a clinical laboratory to perform waived tests. Laboratories maintained on separate premises and operated under the same management may apply for a single certificate of exemption or multiple certificates of exemption ... EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Anne Menard, Manager Home Care Unit cc: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 Arlene Mayo-David, AHCA Delray Beach Field Office Manager Track & Confirm Search Resuhs Label/Receipt Number: 7160 3901 9845 4743 6663 Status: Delivered Your item was delivered at 11:36 AM on June 26, 2008 in FORT LAUDERDALE, FL 33309. Track.& Confirm FAQs Enter Label/Receipt Number. Options Track & Confirm by email Get current event information or updates for your item sent to you or others by email. ( /,h,>) fgnns Oov'I Services .Jobs Priv11.c;y Policy Tenns_ofUse • Nation;il_&.Premier Accounts Copyright© 1999-2007 USPS. All Rights Reserved. No FEAR Act EEO Data FOIA http://trkcnfrm l .smi.usps.com/PTSintemetWeb/Inter Labellnquiry .do 7/21/2008 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION Agency ,i' ., :, In RE: Licensure Renewal Application of Care Admi :i: : TEHC,LLC AHCA No. 2008007748 License No. 204390961 I REQUEST FOR FORMAL HEARING The law firm of Dresnick & Rodriguez, P.A., notices its appearance as counsel for TEHC, LLC, in conjunction with the above-referenced matter. All pleadings, documents, and other communications should be provided to TEHC's counsel at the address below. TEHC disputes the allegations of fact contained in the Notice oflntent to Deny and requests that this pleading be considered a demand for a formal hearing, pursuant to Sections 120.569 and 120.57(1), Florida Statutes, and pursuant to Rule 28-106.2015,. Florida Administrative Code, before an Administrative Law Judge appointed by the Division of Administrative Hearings. In support of this Petition, TEHC states the following: The Petitioner is TEHC, TLC, 3317 NW 10th Terrace. Suite 404. Fort Lauderdale, FL 33309. TEHC's telephone number is 954-351-1895, and the facsimile number is 954-351-1820. TEHC's counsel should be contacted at the address and fax number below. TEHC disputes allegations of fact including, but not limited to, those in paragraphs 1, 6, 7, 8, 9, 11, 12, 15 and 16 of the Notice oflntent to Deny, and requests an Administrative Hearing regarding these allegations. In addition, TEHC disputes that they DRESNICK & RODRIGUEZ, P.A., ONEDATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, F'L 33156-7817 • (305) 670-9800 AHCA No. 2008007748 License No. 204390961 have demonstrated a pattern of deficient performance, and that the plan of correction submitted in June, 2008 was not acceptable. TEHC received the Notice oflntent to Deny on June 26, 2008. The Agency's file number in this case is 2008007748. Respectfully submitted, DRESNICK & RODRIGUEZ, P.A. Attorneys for TEHC, LLC One Datran Center 9100 South Dadeland Blvd, Suite 1610 Miami, FL 33156 Off: (305) 670-9800 Fax: (305) 670-9933 '£' Monica L. Rodriguez) Florida Bar No. 986283 2 DRESNICK & RODRIGUEZ, P.A., ONE DATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, FL 33156-7817 • (305) 670-9800 AHCA No. 2008007748 License No. 204390961 CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing has been furnished by telefax and U.S. Mail on July 16, 2008 to: Nelson Rodney, Assistant General Counsel, Agency for Health Care Administration, 8350 N.W. 52nd Terrace, Suite 103, Miami, FL 33166, with a copy via telefax and U.S. Mail to Richard Shoop, Agency Clerk, 2727 Mahan Drive, Mail Stop # 3, Tallahassee, Florida 32308. '-<:;.., )...f?. .c..,...:_ Monica L. Rodriguez O ') 3 DRESNICK & RODRIGUEZ. P.A., ONEDATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, FL 33156-7817 • (305) 670-9800 08/20/2009 15 51 FAX 305 870 9933 ?RESN ICK & RODRIGUEZ, PA 002/003 STATE OF FLORJDA
