The Issue [Case No. 79-2407] Whether the Department is entitled to reimbursement of certain Medicaid funds previously paid to a nursing home owner in the amount of $118,061.00, based upon a recommendation by the Department and subsequent determination by the U.S. Department of Health, Education and Welfare, under Section 1122, Social Security Act, that Federal reimbursement of expenses attributable to the purchase of the nursing home should be withheld due to the Owner's lack of timely notice of intent to acquire the nursing home; [Case No. 80-467] Whether, based on the Section 1122 determination, the Department wrongfully disallowed and withheld payment to the nursing home owner, certain medicaid reimbursement funds in the amount of $101,348.00. Conclusions and Recommendation: Conclusions: Here, each party has the burden of presenting a preponderance of evidence in support of its affirmative claim. Each claim rests on the propriety or impropriety of imposition of Section 1122 penalties against the nursing home. Since the Department failed to present sufficient evidence justifying the imposition of Section 1122 penalties and the nursing home failed to establish the Section 1122 penalties were erroneously imposed, neither party sustained its burden of establishing entitlement to the relief requested. Recommendation: That the Department's Medicaid overpayment claim against the nursing home owner, in the amount of $118,061.00 be DENIED, and the nursing home owner's claim against the Department for $101.348.00 in Medicaid underpayments be DENIED. Background: On April 26, 1979, and May 2, 1979, Petitioner/Respondent, Department of Health and Rehabilitative Services ("Department") notified Respondent/Petitioners, Lakeview Nursing Home, Robert Becht and R. B. Care, Inc., d/b/a Lakeview Manor and d/b/a Intercoastal Nursing Manor ("Owner") that a desk review of the annual cost report for the Lakeview Nursing Home (a/k/a Lakeview Manor) indicated that the nursing home had been overpaid $18,900.00 by the Department's Medicaid Program during the eight months, ending June 30, 1978, and that such overpayment should be returned to the Department. On October 8, 1979, the Department notified the nursing home Owner that, pursuant to a "Notice of Determination Under Section 1122" issued by the U.S. Department of Health, Education and Welfare ("HEW") the Department had recalculated the nursing home's historic per diem rates and determined that the Owner had been overpaid $61,155.00 in Medicaid funds during the period ending June 30, 1978. On November 19, 1979, the nursing home Owner requested a formal hearing, under Section 120.57(1), Florida Statutes, to challenge the validity of the Department's overpayment claim. On November 30, 1979, the Department forwarded the Owner's request for a hearing to the Division of Administrative Hearings. [DOAH Case No. 79-2407] On January 10, 1980, the Department notified the nursing home Owner that an additional $56,906.00 should be repaid to the State of Florida--based upon alleged overpayment to the nursing home during the period ending June 30, 1979. On February 14, 1980, the nursing home Owner filed a Petition with the Department alleging numerous wrongful and negligent Department actions resulting in the withholding and underpayment of Medicaid funds to which the nursing home was entitled, demanding full payment, and requesting a formal Section 120.57 hearing. On March 12, 1980, the Department forwarded the nursing home Owner's Petition to the Division of Administrative Hearings for assignment of a Hearing Officer. [DOAH Case No. 80-467] By Notice of Hearing, dated April 11, 1980, Case No. 80-467 was set for final hearing on May 29, 1980. By agreement of the parties, the two cases were subsequently consolidated for final hearing. At final hearing, the Department called John T. Donaldson, and offered Respondent's Exhibit Nos. 1 through 9, into evidence, each of which was received. The nursing home Owner called as its witnesses, William McCaulley, Leonard Cordes, and Linda Zarecki, and offered Petitioner's Exhibit Nos. 5, (Composite) and 6, each of which was received. At the request of the nursing home, and without objection by the Department, official recognition was taken of Rule 10C-7.48(6)(c), Florida Administrative Code. The nursing home further stipulated that the only allegations which it would pursue in the administrative hearing concerned whether the Department wrongfully withheld from the nursing home certain Medicaid funds to which its was entitled. Neither party submitted post-hearing proposed Findings of Fact or Conclusions of Law.
Findings Of Fact Pursuant to an agreement with HEW, the Department administers the Medicaid Program within Florida which includes allocation and payment of Medicaid funds to nursing homes which provide health care to patients qualifying for Medicaid benefits. (Testimony of Donaldson, Petitioners Exhibit 5; Respondent's Exhibit 9) On November 1, 1977, Robert Becht, on behalf of R. B. Care, Inc. ("Owner") purchased a nursing care facility located at 208 Lakeview Avenue, West Palm Beach, Florida, known as Intercoastal Nursing Manor. No evidence was presented to establish the purchase price paid for the facility. Subsequent to its purchase, the name of the nursing home was changed to Lakeview Manor, although Department correspondence frequently refers to it as Lakeview Nursing Home. (Testimony of Donaldson, McCaulley, Respondent's Exhibits 1, 2, 5, 9 [Composite]) On January 9, 1978, a representative of the Regional Health Care Planning Agency--Health Planning Council, Inc.--advised the Department's Bureau of Community Medical Facilities of an apparent change in ownership of the Intercoastal Nursing Home, noted that the new owner had not "sought, applied for, or received the necessary Certificate of Need for this change of ownership transaction," and asked for Department assistance in determining the present status of the nursing facility. (Testimony of Donaldson, Respondent's Exhibit 1) In response to the Health Planning Council's letter, the Department's Office of Medical Facilities sent a letter to the Nursing Home Owner, dated January 26, 1978. That letter enclosed Department rules which provided that, when certain expenditures have been incurred by a health care facility without prior notice of such expenditure being given to the designated planning agency (Office of Medical Facilities), that agency should notify the health care facility that such obligation was subject to review, that timely notice of the proposed expenditure was not given, and that the Agency proposed to recommend to the Secretary of HEW that the expenditure be disapproved. The nursing home was given 30 days to reply, or file the necessary application for approval of the expenditure (acquisition of the nursing home). The letter closed with the following: "You should understand that we must report the purchase of Intercoastal Nursing Manor to the Department of Health, Education and Welfare on a no timely notice and that it may affect depreciation, interest, and fair returns on the project and reimbursement on the project." (Respondent's Exhibit 2) By letter dated March 22, 1978 (with copy to the nursing home Owner), the Department's Office of Community Medical Facilities subsequently informed the regional office of HEW that notice had been given the nursing home Owner concerning the need to file an application for review of the November 1, 1977, acquisition of and change in ownership of the nursing home, but that it had failed to respond. The recommendation of the Office of Community Medical Facilities was attached to the transmittal letter; however, that recommendation was not offered into evidence by the Department. The letter of transmittal concluded that, because no application for approval was submitted by the nursing home Owner, there was "no indication on the HRA-45 of the amount of capital expended for the acquisition." (Respondent's Exhibit 3) During April, 1978, the Regional Health Administrator of HEW issued a "Notice of Determination under Section 1122--Reimbursement to be Excluded." The Notice was addressed to the nursing home Owner and concluded that reimbursement for expenses related to the capital expenditure (acquisition of the nursing home facility) would be excluded from payment for services provided under the Social Security Act based upon the finding that (1) the expenditure was subject to Section 1122, and (2) Notice of Intent to make the expenditure had not timely been given. By way of explanation, the regional administrator added that reimbursement would be "withheld for an indefinite period" because the State had been unable to make a finding that the expenditure conformed to applicable plans, standards, and criteria due to the failure to submit an application. (Respondent's Exhibit 4) By separate agreements entered into by the Department and the nursing home Owner on November 2, 1977, October 30, 1978, and September 5, 1979 (which enabled the nursing home to participate in Florida's Medicaid Program) the nursing home Owner expressly agreed to comply with state and federal laws and rules applicable to the Medicaid Program. The Owner also agreed that Medicaid cost reporting would be governed by the procedures and methods contained in the Medicare Provider Reimbursement Manual (HIM-15). The agreements relieve the nursing home from responsibility in "those instances of overpayment due to Agency [Department] errors in eligibility investigation and determination. . ." (Respondent's Exhibit 9 [Composite]) Section 2422 of HIM-15 describes the requirements concerning approval of capital expenditures imposed by Section 1122 of the Social Security Act. The Manual cautions providers desiring to make or having made expenditures subject to Section 1122 to familiarize themselves with the regulations and direct questions concerning its implementation to the designated planning agency. (Respondent's Exhibit 8) Notwithstanding having been sent repeated notices by the Department and HEW concerning the requirements of Section 1122, the nursing home Owner has not filed an application for approval of the capital expenditure associated with acquisition of the nursing home; neither has it contended that such capital expenditure does not fall within the ambit of Section 1122 and implementing HEW and Department rules. (Testimony of McCaulley, Donaldson) Despite the Department's withholding and disallowal of payment to the nursing home of expenses relating to the acquisition of the facility (due to the federal Section 1122 determination), the nursing home continued to qualify for and participate in the Medicaid Program. The nursing home provided efficient and satisfactory medical care to Medicaid patients during 1978, and 1979, and the Department does not assert otherwise. The three Medicaid participation agreements entered into during 1977, 1978, and 1979, do not directly address or purport to relieve health care facilities from compliance with Department rules and Section 1122. (Testimony of Donaldson, McCaulley, Respondent's Exhibit 9 [Composite]) It is probable that the nursing home received actual notice of the requirement that certain capital expenditures by health care facilities must receive Section 1122 approval. Although the nursing home Owner's secretary since June, 1978, does not recall receiving the HEW Section 1122 Notice, she was not employed by the nursing home during the time the notice was issued, and she admitted that she could not testify that the owner had not received the HEW Notice. Moreover, her testimony did not address the earlier Department correspondence to the Owner concerning the need to obtain State and Federal Section 1122 approval, including the Department's Section 1122 recommendation to HEW. (Testimony of Zarecki, Donaldson, Respondent's Exhibits 2, 3, 4, 5, 6) Between 1977 and 1979, the Department overpaid the nursing home $118,061.00 (which includes the $18,900.00 claimed by the Department in its May 2, 1979, letter) in per diem patient reimbursements which the nursing home was not entitled to under the Section 1122 Notice and Penalty. This overpayment was caused by the Department's failure to exclude that portion of per diem patient reimbursements attributable to the Owner's acquisition of the nursing home property. (Testimony of Donaldson, Respondent's Exhibits 5 and 7) If the Section 1122 penalty was incorrectly recommended by the Department, and imposed by the HEW, the Department has withheld between November 1, 1977, and December 31, 1979, $101,348.00 which is now due and owing to the nursing home Owner. (Testimony of McCaulley, Petitioner's Exhibit 6) Since January 2, 1979, the Owner has no longer owned or operated the nursing home in question. (Testimony of McCaulley, Cordes)
Findings Of Fact Manor Care properly and timely filed with HRS its certificate of need application in July 1985. Hearing Officer's Ex. 2, T. 163. On July 15, 1986, Health Care and Retirement Corporation of America timely filed a petition to intervene alleging that its substantial interests would be affected by this case because it was an earlier batched applicant for the same health services in the same service district. On July 21, 1986, counsel for HRS wrote to counsel for Health Care and Retirement Corporation of America confirming that it is the position of HRS that "non-final CON approval of a subsequent application does not count against a prior application when that prior application proceeds to administrative hearing." Hearing Officer's Ex. 1. No ruling has been made on the petition to intervene due to this letter, and there has been no further request by Health Care and Retirement Corporation of America to have its petition to intervene ruled upon. The petition to intervene therefore remains pending. The only criterion at issue in this case is need. T. 145-6. Criteria 3, 4, 5, 6, 7, 10, 11, 12 and 13 of section 381.494(6)(c)m, Fla. Stat., are not in dispute in this case. Financial feasibility is not in dispute except for the dispute as to need. Criterion 8 is in dispute only with respect to "the availability of alternative uses of such resources for the provision of other health services, and the extent to which the proposed services will be accessible to all residents of the service district." Criterion 9 is in dispute only with respect to whether Manor Care can achieve its projected utilization and Medicare projected utilization. Hearing Officer Ex. 2. Manor Care has sufficient and available health manpower resources, management personnel resources, and capital and operating expenditures for project accomplishment and operation. Hearing Officer Ex. 2. The costs and methods of the Manor Care proposed construction are reasonable, and there are no alternative, less costly, or more effective methods of construction available. Hearing Officer Ex. 2. Manor Care proposes to develop 60 community nursing home beds as a skilled nursing facility. T. 17. Some of the skilled nursing services that it would offer include intravenous therapy, hyperalimentation therapy, nasogastric feeding, gastroscopy feeding, tracheostomy care, and bowel and bladder training. Id. Additionally, the proposed 60 beds would be supported by intermediate nursing services, rehabilitation services, physical therapy, occupational speech therapy, respiratory therapy, recreational therapy, and community programs. Id., Manor Care Ex. 1, p. 2. Manor Care also proposes to offer respite nursing care, which is short-term inpatient nursing care. T. 18. In addition to the 60 community nursing home beds which are the subject of these proceedings, Manor Care proposes to provide an attached 60 bed adult congregate living facility (ACLF). T. 18. An ACLF may be operated without a certificate of need. The ACLF will be in an attached wing of the building. Id. The ACLF wing is intended to provide services for persons not needing skilled nursing care. The 60 community nursing home beds would be used for acutely ill persons in need of skilled nursing care. T. 23. The ACLF would provide assistance in daily activities and one hour a day of personal care, but would not involve nursing care. T. 18, 23. Having the ACLF attached to a nursing home will allow for easier transitions for patients from one level of care to another (ACLF to nursing, and return) and will give ACLF residents access to therapies in the nursing wing. T. 24. An ACLF may also be useful to allow a spouse to be closer to a patient in the nursing wing where the at-home spouse needs assistance with daily activities. T. 80. Manor Care proposes to locate the facility in west Tampa, Florida. T. 26. Manor Care projects a payor mix of 60 percent private pay, 30 percent Medicaid, and 10 percent Medicare. T. 26. The Medicare average in Hillsborough County is 4 percent. T. 27. About one-third of the nursing homes in Hillsborough County do not participate in Medicare, T. 28, and these would not be able to take Medicare patients needing skilled nursing services. Id. District VI has about 58 percent Medicaid beds. Manor Care Ex. 4. Manor Care projects an occupancy of 60 percent on the average in the first year, and 90 percent average in the second year. T. 28. The two nursing facilities that opened in Hillsborough County in 1985 achieved 90 percent occupancy in less than a year. T. 22. Given the findings of need and occupancy levels elsewhere in this recommended order, it is reasonable to believe that the projections of occupancy are reasonable and will occur. The projected opening date for the proposed facility is December 1988. T. 29. Petitioner's proposed facility will be consistent with the following criteria contained in the local health plan applicable to Hillsborough County: The local plan ranks Hillsborough County, northwest, as priority 1 among 6 regional priorities. This proposal is consistent with this criterion. T. 30, Manor Care Ex. 1. The local plan provides that applicants should at a minimum serve Medicaid patients in proportion to the representation of elderly poor in the subdistrict. T. 30. The subdistrict of Hillsborough County, northwest, has 18.6 percent persons age 65+ in poverty. Manor Care Ex. 1. The proposed facility is consistent with this criterion. The local plan provides preference to applicants who historically complete projects on time. Manor Care's record on this point is consistent with this criterion. T. 31. See also paragraph 3 above. The local plan requires that existing nursing homes must have been at an average rate of 90 percent occupancy or greater for the six months prior to new beds being approved. Manor Care Ex. 1. The occupancy rate has been over 95 percent since October 1985, T. 31, so this criterion is satisfied. The local plan requires that available alternatives be considered. Manor Care Ex. 1. There are no available alternatives. The local plan requires as a goal that the nursing home be within 30 minutes travel time of 90 percent of the urban residents and 45 minutes travel time of 90 percent of the rural residents. Manor Care Ex. 1. There is unrebutted evidence that this proposal will be consistent with that criterion. T. 32. The local plan requires evaluation of the proposal against the achievement of the applicant of superior quality of care. Manor Care Ex. 1. Quality of care has not been questioned by HRS in this case. See finding of fact 5. Moreover, Manor Care has presented sufficient evidence that it will provide care of good quality. T. 45-9, 59-82. The proposal is consistent with the state health plan since there is a need for the project, and the state health plan goals of consistency with state methodology and accessibility of services, are primarily related to need. T. The services will be accessible to those with need. T. 33. The Department of Health and Rehabilitative Services relies upon rule 10-5.11(21), Florida Administrative Code, to calculate bed need in this case. Hearing Officer Ex. 2, p. 2. All parties have calculated need using Hillsborough County as the proper subdistrict in District IV. Manor Care Ex. 14 accurately summarizes the mathematical method of the rule. Manor Care Ex. 6. The method of calculation relied upon by HRS in this case depends upon application of incipient policy which seeks to implement the decision in the Gulf Court case. T. 154-5. That policy is initially contained in HRS Ex. 2, which is a memorandum from Steven W. Huss, General Counsel, dated March 6, 1986, and adopted as policy by the Administrator of Community Medical Facilities, Office of Health Planning and Development. The memorandum states that the "planning horizon" applicable to all applications for certificates of need shall be projected from the filing deadline of the application, but that "applications shall be evaluated using current or available data for projecting need for the applicable horizon. . . ." HRS Ex. 2. Included in the definition of "current health planning information" is "population." Id. The policies are not rules. T. 159. The Department of Health and Rehabilitative Services put on no evidence to demonstrate the reasonableness of these policies as applied to the Petitioner in this case. T. 160. In the case at bar, HRS proposes to implement the foregoing policy by establishing a "planning horizon" three years from the date that Petitioner's application was date-stamped in, but using "current data," meaning data as of the date of the formal administrative hearing. T. 154. The application was received in July 1985, and thus HRS proposes to establish July 1988 as the planning horizon. T. 163. It also proposes to use population estimates, the number of licensed and approved beds in the subdistrict, and the occupancy levels, from the most recent semiannual community nursing home report as of the date of the formal administrative hearing. T. 163-4. Thus, for "current populations," HRS proposes to use 1986 estimates of 1986 populations. T. 165. Following rule 10-5.11(21) and applying the foregoing incipient policy, the Department calculates a need for 51 community nursing home beds in subdistrict Hillsborough County in the horizon year, July 1988. HRS Ex. 1, T. 154. This calculation is identical to Manor Care Ex. 16. T. 154. The Department proposes to deny Petitioner's application because this calculation does not show at least 60 beds needed. T. 145. 20. Following essentially the same mathematical formula contained in the rule, but with a single critical difference, the Petitioner calculates net bed need in Hillsborough County in July 1988 as 184 beds. T. 105, Manor Care Ex. The critical difference is that Manor Care Ex. 15 uses a July 1, 1986 estimate of 1985 population in calculating "bed rate" within the mathematical formula of the rule. As stated above, HRS proposes to use the 1986 estimate of the 1986 population. Compare Manor Care Ex. 23 with Manor Care Ex. 15 and HRS Ex. 1. It should be noted that this distinction is not at all clear from an examination of Manor Care Ex. 15, which erroneously refers to the ages 65-74 population of 129,366 as "July 1, 1986," population, and the ages 75+ population of 89,297 as population of "July 1, 1986," also. These populations, however, are actually 1986 estimates of 1985 populations. See Manor Care Ex. 23. Manor Care's expert witness did not clearly make this distinction either, calling these "July 1, 1986," population projections, and referring to a "base period of July 1, 1985," without defining what he meant by "base period." T. 103-4. The difference of 133 beds (184 compared to 51) in the two calculations proposed by the parties is caused by the fact that the so-called "bed rate" in the rule is inversely proportional to the population which is assumed to need the nursing home beds. Rule 10-5.11(21)(b) employs a "bed rate" defined as the number of licensed beds divided by the population ages 65 and older, presumably the primary users of nursing home beds. This so-called "bed rate" is then multiplied against the future population of expected users to obtain a bed need figure. (In effect the rule projects the status quo into the future.) If licensed beds, the numerator of the fraction, remains constant (as it does in the two methods discussed above), but the denominator increases (as it does when HRS uses 1986 populations instead of 1985), then the so-called "bed rate" decreases. This result can be traced mathematically for the two methods. Rule 10-5.11(21)(b) calculates a "bed rate" for the population ages 65-74 (called BA) and 75+ (called BB). The number of licensed beds in the district, 5,617, remains constant in both methods. But in Manor Care Ex. 15, the 1986 estimates of 1985 population are 129,366 for the population ages 65-74, and 80,297 for the population ages 75+. In HRS Ex. 1 (and Manor Care Ex. 16) the 1986 estimate of 1986 population ages 65-74 is 133,730 and population ages 75+ is 93,666. The bed rate using the lower population figures (Manor Care Ex. 15) is 104.596 percent of the bed rate using 1986 estimates of 1986 population. In step 4 of the formula as presented in Manor Care Exs. 15 and 16, the preliminary subdistrict bed allocation (SA) is a result of multiplying the bed rate times the licensed beds. Consequently, the result using 1985 populations is a preliminary subdistrict bed allocation of 3,031. Using 1986 populations, the preliminary subdistrict bed allocation is 2,898. The expected difference is 104.596 percent of 2,898, or 133 beds. Manor Care's expert witness presented an alternative calculation of bed need which used 1986 estimates of 1986 population to derive the bed rates BA and BB, but used 1989 as the planning horizon. T. 110. In this manner, the three-year period specified in the rule commences from the date of the formal administrative hearing. Everything else was the same as HRS Ex. 1. This method results in a subdistrict bed need in Hillsborough County of 162. T. 110, Manor Care Ex. 17. The difference of 111 net beds between the method in HRS Ex. 1 and Manor Care Ex. 17 is the result of the increase of population in the two age groups projected between 1988 and 1989. Although the bed rates in HRS Ex. 1 and Manor Care Ex. 17 are lower than the bed rates in Manor Care Ex. 15, these bed rates are multiplied directly against the projected populations in the horizon year. Rule 10-5.11(27)(b)1, Florida Administrative Code. The increase in projected population in 1989, compared to 1988, results in a need for 111 more beds despite the fact that both methods (HRS Ex. 1 and Manor Care Ex. 17) use the same bed rate. In summary, comparing Manor Care Exs. 15 and 17 and HRS Ex. 1, it must be concluded that the effect in HRS Ex. 1 of using population data as of the time of the formal administrative hearing, but projecting need for a three-year period commencing before the formal administrative hearing, causes a diminution of projected need in all cases where the relevant population is increasing. On the one hand, the increase in populations used to compute bed rate results in a lower rate. On the other hand, the use of a horizon year that is less than the full three years from the date that the bed rate is calculated results in a lower horizon year population, and thus ultimately a lower net bed need. In effect, if the term "planning horizon" means a future date to which need is to be projected, beginning from a base date and using a need rate current as of the base date, then the method in HRS Ex. 1, which uses a 1986 bed rate projected to a 1988 population, is actually using only a two year "planning horizon." As will be discussed in the conclusions of law, the method used by HRS to calculated bed need is not legally correct because it does not use data current as of the date of the application. The method proposed by the Petitioner using a 1989 planning horizon is not legally correct because the Petitioner cannot apply for beds in that horizon without amending its application and changing to a later batching cycle. The method proposed by the Petitioner in Manor Care Ex. 15 is essentially correct in method. However, it uses the wrong data because it fails to use data for licensed beds and occupancy rates preceding the batching cycle as required by the rule. The correct calculation of need is the calculation found in Manor Care Ex. 15, but substituting the following data in the formula as indicated: LB 5,270 LBD 2,392 AB 824 ABD 488 (approved beds in the subdistrict) OR 0.962 POPA 141,736 POPB 102,242 POPC 129,366 POPD 89,297 LB and LBD are supposed to be as of June 1, 1985, according to the rule. At the conclusion of the hearing and after receipt of post hearing proposed findings it was discovered that the record did not contain these figures. Thus, an order was entered reopening the record for the limited purpose of having the parties submit this data as of June 1, 1985. The parties did so, but the only data in existence was as of May 1, 1985. There is no reason in this record to believe that the figures LB and LBD changed in the 30 days to June 1, 1985, and thus the figures provided are accepted as June 1, 1985, totals for LB and LBD. Further, if LB and LBD are to be derived from the figures from Hearing Officer's Ex. 4, which are May 1, 1986, figures, the number of approved beds for the district (AB) and subdistrict (to be termed ABD in this order) should also be from the exhibit. AB and ABD above thus are from Hearing Officer's Ex. 4. The occupancy rate, however, has been derived from Manor Care Ex. 22 for the reasons stated in finding of fact 32. LB, LBD, AB, ABD, and OR are new figures, and differ from Manor Care Ex. 15. All else in the computation which follows is the same as Manor Care Ex. 15. In this regard, POPA and POPB are 1986 estimates of 1985 populations, and POPC and POPD are 1986 estimates of 1988 populations. Strictly speaking, the rule seems to require 1985 estimates, but, as discussed in the conclusions of law, there seems to be little reason not to use the most recent estimates of these populations, which presumably would be more accurate. Substituting the above figures in the formula found in Manor Care Ex. 15, the following is the proper calculation of net bed need in this case: Step 1: A = (POPA x BA) + (POPB x BB) A = (141,736 x BA) + (102,242 x BB) A = (141, 736 x 0.007923) + (102,242 x 0.047538) Step 2: A BA = = 1123 + 4860 5983 LB (FOPC + (6 x POPD) BA = 5,270 5,270 BA = (129,366 + (6 x 89,297) 0.007923 665,148 Step 3: BB = 6 x BA BB = 6 x 0.007923 BB = 0.047538 Step 4: SA SA SA = = = A x LBD x OR LB 0.90 5983 x 2,392 x 0.962 5,270 0.90 5983 x 0.4538899 x 1.0688889 SA 2903 Step 5: If LB + AB is less than 27 POPE 1,000 and PDB is greater than PBS, than PA 27 x POPE 1,000 If 5,270 + 824 = 0.0278694 is greater than 0.027, 218,663 then the poverty adjustment does not apply. Step 6: Not applicable because 0.0278694 is greater than 0.027 Step 7: LB 5,270 as of June 1, 1985 LBD 2,392 as of June 1, 1985 Step 8: Projections based on 3-year period from July 1, 1985 to July 1, 1988. Step 9: NH = need SA - LB - (0.90 x ABD) NH = need 2903 - 2392 - (0.90 x 488) NH = need 2903 - 2392 - 439 NET NEED 72 beds In January 1983, nursing homes in Hillsborough County were experiencing an occupancy rate of 91 percent on the average. Manor Care Ex. 22. In about July 1983, hospitals began to be affected by the new federal prospective payment system and diagnostic related groups (DRO's). T. 125-6. The federal DRG system of Medicare reimbursement results in flat rate payments for specified numbers of days of hospital care. T. 50. Since the purpose of the system is to lower cost by decreasing the length of hospital stays, the result has been to produce a greater need for skilled nursing centers to care for sicker patients needing higher levels of care. Id., T. 88, 50. This increases the demand for short term skilled nursing placements. T. 88. As a result, there was greater utilization of existing nursing home beds in Hillsborough County, and by August 1983, the occupancy rate went to 96 percent on the average. Manor Care Ex. 22. By November 1983, it was at 97 percent. Id. In 1984, nursing homes in Hillsborough County averaged 97 percent occupancy. Manor Care Ex. 22. In the first two months of 1985, existing nursing homes in Hillsborough County continued to experience a 97 percent occupancy. Manor Care Ex. 22. In March 1985, 120 new nursing home beds in Hillsborough County were opened, and the occupancy rate average dropped to 92 percent, but by July 1985 the average had climbed again to 95 percent. Id. In October 1985, another 120 beds were opened, and the rate again dropped to 91 percent, but by December 1985, it had increased to 94 percent. Id. The rate has been steady at 94 percent to March 1986, the last month for which there is data in the record. Id. See also Manor Care Ex. 21. It should also be noted that the facility that opened in October 1985 had achieved an occupancy level of 95 percent in six months. T. 129. The occupancy rate for subdistrict Hillsborough County for the period October 1984 through March 1985 was 96.2 percent. This is derived from Manor Care Ex. 22. The exhibit shows that the occupancy rate for the months of October 1984 through February 1985 was 97 percent. In March 1985, the rate dropped to 92 percent. The average of these six figures is 96.2 percent. It should be noted that this occupancy rate was used in findings of fact 26 and 27 instead of the lower occupancy rate found in Hearing Officer Ex. 4. The occupancy rate of 96.2 percent is more credible for several reasons. First, it was presented by a witness who was subject to cross-examination. If there had been a problem with the rate as depicted in Manor Care Ex. 22, the problem might have been exposed in cross examination. Second, it is based on a more detailed (month by month) set of data. Finally, it is consistent with the trend shown by Manor Care Ex. 22. The lower rate contained in Hearing Officer Ex. 4 is out-of- line from this trend, and therefore apparently in error. Persons who most need nursing home services are 65 years or older, and these groups are projected to increase faster than the population ages 0-64 in Hillsborough County to the year 1990. Manor Care Ex. 23. From 1986 to 1990, the total population of Hillsborough County is estimated to grow each year at between 1.7 percent and 2.2 percent compared to the previous year. Manor Care Ex. 23. In the same four years, it is projected that the Hillsborough County age group 75+ will grow on the average at 4.6 percent each year, and the age group 65-74 will grow on the average at 2.7 percent each year. Id. As discussed above, the change in the federal method of reimbursing hospital costs has resulted in sicker patients needing nursing care outside the hospital. Florida sets a higher staffing requirement for skilled nursing care than other nursing facilities. T. 51. Skilled nursing care usually requires more staff, better trained staff capable of coping with multiple health problems, closer monitoring of patients, closer communication with physicians and hospitals, and more supplies. T. 61-2. Skilled nursing is more expensive. Id. A nursing home may elect not to provide skilled nursing because its current staff lacks sufficient training, because of exposure to greater liability, and because skilled nursing care is more difficult. T. 51. Nursing homes that can achieve high occupancy levels without skilled nursing care have less incentive to provide such care. T. 34. Hillsborough County appears to have such high occupancy levels that there may be less incentive for existing nursing homes to provide skilled nursing care. Id. Ten of the nursing homes in Hillsborough County each provide less then 1 percent of their services to Medicare patients. T. 130. Of these, six provide no Medicare services. Id. Thus, about one-half of the nursing homes in Hillsborough County provide no Medicare skilled nursing. Id. The three largest hospitals in Tampa currently have waiting lists for placement of patients needing skilled nursing care. T. 22. These hospitals have trouble placing patients after hospitalization, and demand for nursing home services exceeds availability. Manor Care Ex. 24, p. 7, T. 84. This often results in such patients having to stay longer in the hospital. T. 85. The following skilled nursing services are not adequately available in Hillsborough County: intravenous therapy, hyperalimentation therapy, and tracheostomy care. T. 24-5, 84-6, 89-90. Intravenous therapy involves the injection of fluids directly into a vein. T. 66. This therapy requires close monitoring by trained staff. T. 68. Manor Care proposes to provide intravenous therapy for up to four patients a day. T. 70. A tracheostomy is an opening at the base of the neck into which a tube is inserted to create an open airway. T. 70-1. Patients needing this type of care include neurological traumas, stroke patients, and head trauma victims. T. These patients are usually unstable and the tracheostomy requires close attention, sterility, and suction. T. 71-2. Manor Care proposes to provide tracheostomy care. Manor Care Ex. 1, section III, paragraph 5. Hyperalimentation therapy is either tube feeding through the gastro- intestinal tract, or through a vein. T. 73-4. Until about two years ago, this therapy was not typically provided in a nursing home. T. 74. Patients requiring this therapy are those with problems with excessive vomiting, diarrhea, bowel obstructions or cancer, and massive gastro-intestinal surgery. Id. Hypralimentation therapy may be short-term or long-term. Id. The procedure requires great care, caution, and specially trained staff. T. 75. There is a need in Hillsborough County for additional respite care. T. 87. The same admission paperwork is needed for a patient coming for only two days for respite care as for a patient that is to be a long-term patient, T. 54, and this acts as a disincentive to providing such care. There are two adult congregate living facilities in the Tampa community now. T. 89. One is associated with sheltered nursing home beds, and the other is associated with nursing home beds that are partially available to persons not residing in the ACLF. T. 91. Manor HealthCare Corporation has nine nursing centers in Florida. T. All are certified for Medicare. T. 49-50. Medicare has high criteria for skill level, and thus a nursing home that is certified for Medicare is capable of treating patients needing higher nursing skills. T. 50. Manor HealthCare has contracted with three health maintenance organizations to provide skilled nursing care, and is negotiating with four others for the same services. T. 44. These contracts enable the health maintenance organizations to move patients from acute care in a hospital to a lower cost skilled nursing care. T. 45. District VI, which includes Hillsborough County, has a higher poverty level for persons 65 years of age and over than Florida as a whole. T. 117. However, the poverty adjustment does not apply in this case. See finding of fact 28, steps 5 and 6. Subparagraph (b)5 of the rule provides a "poverty adjustment" to allocate at least 27 beds per 1,000 residents 65 years of age or older "in the current year." T. 112. Thus, the adjustment does not project a number of beds into the future. Id. Manor Care demonstrated that it would make a significant difference if this adjustment were based upon the number of residents 65 years of age and older in the horizon year. Applying the rule as currently written, HRS Ex. 1 and Manor Care Ex. 16, which are identical, show net need of 51. Using this same method if the population age 65+ in the horizon year (1988) is used, the net need is 99. T. 111-9, Manor Care Ex. 19. On August 22, 1986, the Department of Health and Rehabilitative Services published notice of intent to amend subparagraph (b)5 of rule 10- 5.11(27) to provide that the poverty adjustment would allocate no less than 27 nursing home beds per 1,000 population 65 years of age or over projected three years into the future. Vol. 12, No. 34, p. 3060, Florida Administrative Weekly. The proposed rule was withdrawn on September 12, 1986. Vol. 12, No. 37, p. 3384, Florida Administrative Weekly, Hearing Officer Ex. 4. HRS has previously approved certificate of need applications for nursing home beds despite lack of numerical need. T. 141-2. Apparently HRS construes rule 10-5.11(21)(b)10 as not constituting an exclusive list of exceptions justifying grant of a certificate of need despite lack of numerical need. T. 142. There is a need for the 60 bed skilled nursing facility as proposed in this formal administrative hearing by the Petitioner. Existing facilities do not fulfill this need, and there are no adequate alternatives.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, the stipulations of the parties and the entire record complied herein, I hereby make the following findings of fact: THE STIPULATIONS OF THE PARTIES The parties stipulated to the following facts: Forum timely filed its letter of intent and application with DHRS and the District IX Local Health Council for the July 1986 batching cycle. DHRS ultimately deemed the application complete and, following review, published its notice of intent to deny the application. Forum timely filed a petition requesting a formal administrative hearing pursuant to Section 120.57(1), Florida Statutes. The sole issue is whether there is a need for Forum's proposed services; additionally, it is DHRS's position that a lack of need for the project results in the project not being financially feasible in the short or long term. All other statutory and rule criteria were satisfied, at least minimally, except proof of need pursuant to Rule 10-5.011(1)(k) [formerly 10-5.11(21)(b)], Florida Administrative Code, and financial feasibility as it relates to need. FORUM'S PROPOSAL Forum is a publicly held health services company which owns, develops and operates retirement living centers and nursing homes on a national basis. Forum proposes to develop a retirement living center in Palm Beach County that would consist of 120 to 150 apartment units for independent living, a separate personal care unit (known in Florida as an adult congregate living facility), and a 60-bed nursing home component certified for skilled and intermediate care. Palm Beach County is in HRS Service District IX, Subdistrict 4. All three components of Forum's retirement living center would be physically connected and share some operational functions, such as dietary facilities and the heating plant. Such a design provides for an efficient operation as well as an economic distribution of costs facility wide. No specific site has been selected , although Forum has narrowed its focus to the eastern half of Palm Beach County. It is not economically feasible to acquire property or pay for an option on property until after receiving CON approval. The projected total cost of Forum's proposed 60-bed nursing home is $2,329,800. Forum has the necessary resources for project accomplishment and operation. Forum proposes to seek Medicare certification and will provide up to 25 of its beds for Medicaid patients. FINANCIAL FEASIBILITY Forum is a national company, with substantial experience in developing and operating nursing homes and retirement living centers. If need for the facility is shown, Forum would be able to capture a sufficient share of the nursing home market to render its proposed nursing home financially feasible while at the same time having no material negative impact on existing providers in the district. NUMERIC NEED Need for new or additional community nursing home beds in Florida is determined, preliminarily, by use of the methodology found in Rule 10- 5.011(1)(k), Florida Administrative Code. Additional beds normally are not approved if there is no need for beds as calculated under the rule. Pursuant to the rule, need for a defined nursing home subdivision is projected to a three- year planning horizon, in this case July 1989. The need methodology prescribed in the rule is as follows: A (POPA x BA) + (POPB x BB) or: The District's age-adjusted number of community nursing home beds for the review cycle for which a projection is being made [A] (The population age 65-74 years in the relevant departmental districts projected three years into the future [POPA] x the estimated current bed rate for the population age 65-74 years in the relevant district [BA]) + (The population age 75 years and older in the relevant departmental district projected three years into the future [POPB] x the estimated current bed rate for the population age 75 years and over in the relevant district [BB].) BA LB/(POPC) + (6 x POPD) or: The estimated current bed rate for the population age 65-74 years in the relevant district [BA] (The number of licensed community nursing home beds in the relevant district [LB]/the current population age 65-74 years [POPC] + (6 x the current population age 75 years and over [POPD]) BB 6 x BA or: The estimated current bed rate for the population age 75 years and over in the relevant district [BB] 6 x the estimated current bed rate for the population age 65-74 years in the relevant district [BA]. SA A x (LBD/LB) x (OR/.90) or: The preliminary subdivision allocation of community nursing home beds [SA] The district's age-adjusted number of community nursing home bids for the review cycle for which a projection is being made [A] x (The number of licensed community nursing home beds in the relevant subdistrict [LBD]/the number of licensed community nursing home beds in the relevant district [LB]) x (The average occupancy rate for all licensed community nursing homes within the subdistrict of the relevant district [OR]/.90) Rule 10-5.011(1)(k)(2)(i), Florida Administrative Code, provides that: The new bed allocation for a subdistrict, which is the number of beds available for CON approval, is determined by subtracting the total number of licensed and 90 percent of the approved beds within the relevant departmental subdistrict from the bed allocation determined under subparagraphs a. through i., unless the subdistrict's average estimated occupancy rate for the most recent six months is less than 80 percent, in which case the net bed allocation is zero. The appropriate planning horizon for the instant case is July 1989, corresponding to the review cycle which began July 15, 1986, and the subdistrict is Palm Beach County. THE NUMBER OF LICENSED COMMUNITY NURSING HOME BEDS IN THE RELEVANT DISTRICT (LB)/THE NUMBER OF LICENSED COMMUNITY NURSING HOME BEDS IN THE RELEVANT SUBDISTRICT (LBD) Rule 10-5.011(1)(k) requires that "review of applications submitted for the July batching cycle shall be based upon the number of licensed beds (LB and LBD) as of June 1 preceding this cycle..." On June 1, 1986, there were 5,459 licensed community nursing home beds in District XI (LB) and 4,084 licensed community nursing home beds in subdistrict 4 (Palm Beach County LBD). These figures include 220 licensed beds that were previously categorized as sheltered. In the instant case, the appropriate figure for LB is 5,459, and the appropriate figure for LBD is 4,084. APPROVED BEDS WITHIN THE RELEVANT DEPARTMENTAL SUBDISTRICT DHRS's interpretation of the rule is to include in the count of approved beds, those approved up to the date of the supervisor's signature on the State Agency Action Report (SAAR). In this case, there were 640 approved beds in Palm Beach County at that time. As of June 1, 1986, the same date as the licensed bed cutoff, there were 640 approved beds in the subdistrict. In Dr. Warner's opinion, approved beds should be determined as of the same time period as licensed beds in order to have consistency and avoid anomalies in the formula. This opinion is reasonable and appropriate. In the instant case, the figure to be applied in the formula for approved beds in the subdistrict is 640 approved beds. THE POPULATION AGE 65-79 YEARS IN THE RELEVANT DEPARTMENTAL DISTRICT PROJECTED THREE YEARS INTO THE FUTURE (POPA). THE POPULATION AGE 75 YEARS AND OVER IN THE RELEVANT DEPARTMENTAL DISTRICT PROJECTED THREE YEARS INTO THE FUTURE (POPB). The rule provides that the three year projections of population shall be based upon the official estimates and projections adopted by the Office of the Governor. For the purposes of calculating need, DHRS utilizes at the final hearing the figures for estimated population obtained from data available at the time of initial application and review. The set of population projections which were available when Petitioner's application was filed and reviewed were those published on July 1, 1986. Based on this data, which is reasonable to use, POPA 170,639; and, POPB 122,577. THE CURRENT POPULATION AGE 65-74 YEARS (POPC)/THE CURRENT POPULATION AGE 75 YEARS AND OVER (POPD). In calculating POPC and POPD, DHRS also utilizes at final hearing the most current data available at the time of initial application and review, in this case the July 1, 1986, release. Based on that data, POPC 153,005 and POPD 112,894. In the opinion of Dr. Warner, Forum's expert, the base for POPC and POPD should correspond to the period for which the average occupancy rate (OR) is calculated. For the July batching cycle, OR is based upon the occupancy rates of licensed facilities for the months of October through March preceding that cycle. According to Warner, January 1, 1986, as the midpoint of this time period, is the appropriate date to derive POPC and POPD in this case. The formula mandated by the rule methodology for calculating the estimated current bed rate requires that the "current population" for the two age groups be utilized. It is reasonable and appropriate for the base for POPC and POPD to correspond to the period for which the average occupancy rate is calculated. Supportive of Dr. Warner's opinion are the past practices of DHRS. Between December 1984 and December 1986, DHRS routinely used a three and one half year spread between the base population period and the horizon date in determining "current population" in its semiannual nursing home census report and bed need allocation. In the January 1987 batching cycle, which cycle immediately followed the cycle at issue in this case, DHRS utilized a three and one half year spread between the base population period and the horizon data for "current population" when it awarded beds. DHRS offered In this case, it proposed to use a three year spread between the base population period and the horizon dated for "current population" in calculating POPC and POPD. Using the July 1986 population release, POPC for January 1986 is 149,821 and POPD for January 1986 is 98,933. THE AVERAGE OCCUPANCY RATE FOR ALL LICENSED COMMUNITY NURSING HOMES WITHIN THE SUBDIVISION OF THE RELEVANT DISTRICT (OR). The rule requires the use of occupancy data from the HRS Office of Health Planning and Development for the months of the previous October through March when calculating a July batch of nursing home applicants. However, the rule is not instructive as to how one calculates this number. In this case, DHRS computed average occupancy rates based on the existing occupancy rates at applicable facilities on the first day of each month. Based on this occupancy data, which includes the data for the 220 previously sheltered beds in the subdistrict, occupancy rates for the July 1986 batch of Palm Beach County nursing home applicants is 83.75 percent. Forum's witness, Dr. Warner, determined that the correct occupancy rate was 85.46 percent for Palm Beach County for the period October 1985 to March 1986. Dr. Warner arrived at this figure by including paid reservation days. A paid reservation day is a day which is paid for by the patient or the patient's intermediary during which the patient is not physically in the bed. Typically, the patient will either be in the hospital, visiting relatives or otherwise away from the facility and will continue to pay for the nursing home bed, so that they will be able to return and not have someone occupy the bed. One of the goals and objectives of the District IX Local Health Plan is that paid reservation days be considered when bed need calculations are made. Calculating prepaid reservation days is consistent with the Rule because such beds are no longer available to the public and are therefore in use. Dr. Warner determined that during the applicable period, 1.25 percent of the licensed beds in the subdistrict were paid reservation days. Although taking paid reservation days into account would not be inconsistent with the rule, Forum failed to demonstrate that the 1.25 percent figure arrived at is valid for the applicable period, i.e., October 1985 to March 1986. Dr. Warner merely calculated a two-year average number of paid reservation days, broke this figure down to a six-month average and applied this average to the six-month period specified in the Rule. Gene Nelson, an expert called on behalf of Forum, calculated the occupancy rate as 88.72 percent in Palm Beach County for the appropriate period called for in the Rule. Nelson used the average monthly occupancy data obtained from medicaid cost reports for some facilities rather than first-day of the month data as used by DHRS. In addition, Nelson did not factor in the occupancy date of licensed beds in the extreme western portion of the County based on his belief that the District IX Local Health Plan mandates that the western area not be considered in any way with the eastern coast section of Palm Beach County for purposes of determining competitiveness. While the use of average full-month occupancy data is generally more reliable than using first-day of the month data, it is best, from a health planning prospective, to be able to use either all full-month data or all first- day of the month data. In making his calculations, Mr. Nelson mixed the two types of data, using full-month data when available and in other cases using first-day of the month data when full-month data was not available. It is inappropriate to fail to consider licensed beds in the extreme western portion of the County based solely on the local health plan. Among other reasons, the rule does not provide for exclusions for any of the subdistricts licensed facilities from the methodology. The appropriate and most reasonable occupancy rate (OR) in the instant case for the applicable time period is 83.75 percent. NET NEED Applying the above-referenced variables to the Rule formula produces the following results. July, 1986. District Allocation BA LB (POPC + (6 x POPD) - 5459 [149,821 + (6 x 98,833)] - .007349 BB - 6 x BA .044094 (.007349) July, 1989 Allocation (POPA x BA) + (POPB x BB) - (170,639 x .007349) + (122,577 x .044094) - 6659 Subdivision Allocation and Need SA A x (LBD / LB) x (OR 1.9) - 6659 x (4084 / 5459) x (.8375/.9) - 6659 x .74812236673 x .93055555555 4636 Subdistrict Allocation for Palm Beach County 4084 (Licensed Beds) 576 (90 percent of 640 Approved Beds) -24 (Bed Surplus)
Recommendation Based on the foregoing Findings of Fact, and Conclusions of Law, it is, RECOMMENDED that the application for certificate of need filed by Forum be Denied. DONE AND ORDERED, this 4th day of April, 1988, in Tallahassee, Florida. W. MATTHEW STEVENSON 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 4th day of April, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0704 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in substance in Finding of Fact 2. Adopted in substance in Finding of Fact 3. Adopted in substance in Finding of Fact 4. Adopted in substance in Finding of Fact 5. Adopted in substance in Finding of Fact 5. Adopted in substance in Finding of Fact 6. Adopted in substance in Finding of Fact 6. Adopted in substance in Finding of Fact 7. Adopted in substance in Finding of Fact 9. Sentence 1 is rejected as contrary to the weight of the evidence. Rejected as subordinate and/or unnecessary. 11. Adopted in substance in Finding of Fact 9. 12. Adopted in substance in Finding of Fact 9. 13. Adopted in substance in Finding of Fact 10. 14. Adopted in substance in Finding of Fact 12. 15. Adopted in substance in Finding of Fact 1. 16. Adopted in substance in Finding of Fact 14. 17. Adopted in substance in Finding of Fact 21. 18. Adopted in substance in Finding of Fact 20. 19. Adopted in substance in Finding of Fact 22. 20. Adopted in substance in Finding of Fact 22. 21. Adopted in substance in Finding of Fact 18. Adopted in substance in Finding of Fact 15. Adopted in substance in Finding of Fact 17. Adopted in substance in Finding of Fact 17. Adopted in substance in Finding of Fact 23. Rejected as a recitation of testimony and/or unnecessary. Rejected as subordinate and/or unnecessary. Adopted in substance in Finding of Fact 24. Rejected as a recitation of testimony and/or unnecessary. Adopted in substance in Finding of Fact 25. Rejected as a recitation of testimony and/or subordinate. Adopted in substance in Finding of Fact 25. Adopted in substance in Finding of Fact 21. Rejected as contrary to the weight of the evidence. Rejected as not supported by the weight of the evidence and/or unnecessary. Rejected as subordinate and/or unnecessary. Rejected as subordinate and/or unnecessary. Adopted in substance in Finding of Fact 27. Adopted in substance in Finding of Fact 28. Adopted in substance in Finding of Fact 27. Adopted in substance in Finding of Fact 28. Rejected as a recitation of testimony and/or subordinate. Rejected as misleading and/or subordinate. Rejected as subordinate and/or unnecessary. Rejected as contrary to the weight of the evidence. Rejected as contrary to the weight of the evidence. Rulings on Proposed Findings of Fact Submitted by the Respondent Adopted in substance in Finding of Fact 1. Adopted in substance in Finding of Fact 1. Adopted in substance in Finding of Fact 9. Adopted in substance in Finding of Fact 3. Rejected as contrary to the weight of evidence. Adopted in substance in Finding of Fact 13. Adopted in substance in Finding of Fact 18 and 19. Adopted in substance in Finding of Fact 16. Adopted in substance in Finding of Fact 23. Addressed in Conclusions of Law. Addressed in Conclusions of Law. Rejected as subordinate and/or unnecessary. COPIES FURNISHED: Thomas W. Stahl, Esquire 102 South Monroe Street Tallahassee, Florida 32301 R. Terry Rigsby, Esquire 325 John Knox Road Building C, Suite 135 Tallahassee, Florida 32303 Richard Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Tallahassee, Florida 32308 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 John Miller, Esquire Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power HRS Clerk Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 =================================================================
The Issue Whether Respondent's license as a nursing home administrator in the State of Florida should be suspended, revoked, or otherwise disciplined for the alleged violation of Chapter 468, Florida Statutes, as set forth in the Administrative Complaint filed October 10, 1988. The Administrative Complaint charges Respondent with violating Section 468.1755(1)(g), Florida Statutes, because of alleged negligence, incompetence or misconduct in the practice of nursing home administration, and Section 468.1755(1)(m), Florida Statutes, as a result of willfully or repeatedly violating any of the provisions of the law, code or rules of the licensing or supervising authority or agency of the state having jurisdiction of the operation and licensing of nursing homes. The charges are based on the allegation that Respondent was the Administrator in charge of a nursing home in Miami, Florida while also acting in the capacity of Administrator at another facility without having a qualified Assistant Administrator to act in his absence. This case was originally scheduled for hearing on March 26, 1989. That hearing was continued while the parties attempted to finalize a settlement agreement. On April 25, 1989, the Petitioner, Department of Professional Regulation, Board of Nursing Home Administrators entered a Final Order imposing a reprimand on Respondent. Respondent objected to the Final Order and contended that it was not in accordance with the settlement negotiations that took place. A Notice of Appeal was filed in connection with the Final Order. Subsequently, the parties agreed that the appeal should be dismissed and the case was remanded to the Division of Administrative Hearings to conduct a formal administrative hearing. At the hearing, Petitioner called two witnesses: James W. Bavetta, an inspector with the Department of Health and Rehabilitative Services, Office of Licensure and Certification and William Carl Wheatley, Jr., a licensed Nursing Home Administrator in the State of Florida, who was accepted as an expert in the field of nursing home administration. The Petitioner offered three exhibits into evidence all of which were accepted. The Respondent testified on his own behalf and had fourteen exhibits marked, all of which were accepted into evidence except Respondent's Exhibit 2 which was not offered. At the conclusion of the hearing, the parties requested and were granted an opportunity to brief certain legal issues raised during the hearing in order to obtain a ruling on those issues prior to submitting proposed recommended orders. However, the parties subsequently withdrew this request and by Agreed Order dated December 29, 1989, the parties were granted until January 29, 1990 to file their proposed recommended orders. The parties were also granted fifteen days after submission of proposed recommended orders to file a reply memoranda to the legal issues raised in the proposals. Both parties filed proposed recommended orders. In addition, Respondent filed a Memorandum Brief regarding certain legal issues raised. The Petitioner did not file a separate brief on the legal issues. The Petitioner's proposed recommended order was filed on January 30, 1990. By notice filed on February 5, 1990, the Respondent waived any objection to the late filing of Petitioner's Recommended Order. All submittals have been reviewed and considered in the preparation of this Recommended Order. A ruling on each of the parties' proposed findings of fact is included in the Appendix to this Recommended Order. Prior to the hearing, Respondent had filed a Motion to Compel Complete Response to Respondent's Request for Production of Documents. That Motion was related to the purported failure by the Department of Health and Rehabilitative Services to produce documents requested pursuant to subpoena Duces Tecum issued August 16, 1989. The Department of Health and Rehabilitative Services ("HRS") is not a party to this action, but it filed a Response to Motion to Compel indicating that HRS's records were not kept in a manner which would allow the agency to isolate the documents requested without going through every licensure file kept by the agency. HRS offered the Respondent an opportunity to undertake such an investigation. At the commencement of the hearing, the Respondent advised that he was prepared to go forward with the hearing without a ruling on the Motion to Compel. However, counsel for Respondent requested the opportunity to revisit this issue, if necessary, at the conclusion of the hearing. During the hearing, an investigator from HRS testified and produced certain documents relating to Respondent's Florida facility. In addition, the HRS investigator testified regarding certain HRS policies and procedures. Based upon the evidence adduced at the hearing, the Motion to Compel appears moot and Respondent has not addressed this issue in his proposed recommended order. Therefore, the Motion to Compel is denied. At Petitioner's request, official recognition has been taken of Rule 10D- 29.104(6)(c).
Findings Of Fact Based upon the testimony of the witnesses and documentary evidence received at the hearing and the entire record herein, I make the following findings of fact: The Respondent, is a licensed Nursing Home Administrator in the State of Florida, license number NH 0001018. He has been duly licensed in Florida since 1974-1975. At all times material hereto, the Respondent has been the nursing home administrator in charge at Riverside Care Center ("Riverside",) a nursing home located at 899 N.W. 4th Street, Miami Florida. Respondent has never been the designated nursing home administrator for any other facility licensed by or located in Florida. At all times material hereto, Riverside held and continues to hold a superior rating issued by Florida HRS pursuant to Section 400.23, Florida Statutes. At all times material hereto, Respondent has been a licensed nursing home administrator in the State of Kentucky, having been issued license number 420. Respondent has also been a licensed nursing home administrator in the State of Ohio since 1973. Other than the charges in this case, Respondent has never been the subject of disciplinary action or faced administrative charges in any of the states in which he is licensed. At all times material hereto, Respondent has been the licensed nursing home administrator in charge of Garrard Convalescent Home, (`1Garrard") located at 425 Garrard Street, Covington, Kentucky 41011. In December, 1985, as a part of the re-licensure process, Riverside filed DHRS Form 109 with MRS. The information contained on that form disclosed that Respondent served as an Administrator for Garrard which is a superior rated nursing home located in and licensed by the Commonwealth of Kentucky. Prior to July 11, 1986, Riverside designated in writing, Richard Stacey and Riverside's Director of Nursing, as the persons in charge and responsible for the facility in the absence of Respondent from the facility. On July 11, 1986, Richard Stacey, Respondent's brother, was a nursing home administrator licensed by Kentucky. Thus, he had passed the national examination. He had applied for an administrator's license by endorsement in Florida. Such license was issued to Mr. Stacey in 1986, but not until after July 11, 1986. On July 11, 1986, Respondent was in Cincinnati, Ohio, at Riverside's central business office, working on payroll for the facility. Richard Stacey was physically present and in charge of Riverside on that date. However, he was not a licensed administrator in Florida at that time. Betty Ward, a licensed administrator, was physically present and in charge at Garrard. On July 11, 1986, as the result of comments received from the HRS Medicaid Office, Audit Division, in Tallahassee, an MRS representative went to Riverside and determined that Respondent was not present at the facility. During the inspection, Mr. Bavetta, the MRS representative, did not look for nor did he find any evidence that the residents were not being cared for or that their rights were not being protected. As a result of the inspection, the HRS investigator issued a Recommendation for Sanctions against the facility for a purported violation of Florida Administrative Code Rule 10D-29.104(6)(c) and/or 10D-29.104(6)(d). A violation of either of those sections would generally constitute a Class III deficiency pursuant to Section 400.238(4), Florida Statutes. Class III deficiencies do not present a direct or immediate threat to the safety or welfare of the residents. The existence of a Class III deficiency or deficiencies does not automatically establish negligence, incompetence or misconduct on the part of the Administrator of the facility. As a matter of general policy, HRS does not seek administrative sanctions if a Class III deficiency is corrected within the prescribed time. In this case, no time to correct the deficiency was prescribed and HRS sought administrative sanctions against the facility. Within six (6) days of receipt of the notice by Riverside of the alleged violations of Florida Administrative Code Rule 10D-29.104(6), a licensed assistant administrator was hired by Riverside. The decision not to hire a licensed assistant administrator at Riverside prior to July 11, 1986 was based upon the advice of Respondent's attorney that such was not a requirement under Florida law. For the period January 1, 1985 through September 21, 1989, Petitioner has not filed charges against any other licensed nursing home administrator in the State of Florida except Respondent for an alleged violation of Florida Administrative Code Rule 10D-29.104(6)(c) or 10D-29.104(6)(d). Respondent's conduct of nursing home administration at Riverside was in conformity with the standard of practice utilized by a normal, prudent, responsible nursing home administrator in Florida.
Recommendation Based upon the foregoing facts and conclusions of law, it is RECOMMENDED that the Florida Board of Nursing Home Administrators enter a Final Order finding Ralph L. Stacey, Jr., not guilty of violating Section 468.1755(1)(g) and Section 468.1755(1)(m) Florida Statutes, and dismissing all the charges in the Administrative Complaint. DONE and ORDERED this 4th day of April 1990, in Tallahassee, Florida. J. STEVEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12 day of April 1990. APPENDIX TO RECOMMENDED ORDER CASE NO. 88-6233 Both the Petitioner and the Respondent submitted Proposed Recommended Orders which include proposed findings of fact and conclusions of law. The following rulings are directed towards the findings of fact contained in those proposals. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order were Accepted or Reason for Rejection. 1 Adopted in substance in Findings of Fact Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 4. Adopted in substance in Findings of Fact 5. Adopted in substance in Findings of Fact 9. Adopted in substance in Findings of Fact 14. Adopted in substance in Findings of Fact 8. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in the Findings of Fact of Fact Number in the Recommended Order were Accepted or Reason for Rejection. 1 Adopted in substance in Findings of Fact 2. Adopted in substance in Findings of Fact 4. 3. Adopted in substance in Findings of Fact 2. 4. Adopted in substance in Findings of Fact 3. 5. Adopted in substance in Findings of Fact 6. 6. Adopted in substance in Findings of Fact 7. 7. Adopted in substance in Findings of Fact 8. 8. Adopted in substance in Findings of Fact 9. Rejected as constituting a conclusion of law rather than a finding of fact. Adopted in substance in Findings of Fact 11. Adopted in substance in Findings of Fact 12. Adopted in substance in Findings of Fact 13. 13. Adopted in substance in Findings of Fact 15. 14. Adopted in substance in Findings of Fact 16. 15. Adopted in substance in Findings of Fact 17. 16. Subordinate to Findings of Fact 14. 17. Subordinate to Findings of Fact 13. 18. Rejected as constituting a conclusion of law rather than a finding of fact. 19. Adopted in substance in Findings of Fact 18. COPIES FURNISHED: Charles F. Tunnicliff Chief Attorney Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 Kenneth S. Handmaker, Esquire Middleton & Reutlinger 2500 Brown & Williamson Tower Louisville, Kentucky 40202 Judie Ritter Executive Director 504 Daniel Building 111 East Coastline Drive Jacksonville, Florida 32202 Kenneth E. Easely, Esquire Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact Suburban Nursing and Mobile Homes, Inc., of Ohio, at all material times, wholly owned the stock of G & J, an owner of land, buildings and equipment of two nursing homes, Krestview Nursing Home and Towne House Convalescent Center located in Miami, Florida. Suburban was a holding company which owned the stock of numerous subsidiary corporations engaged in the nursing home or mobile home park business. Among its subsidiaries was B & K Investments, Inc. (hereafter "B & K") a Florida corporation. All of the stock of Suburban was controlled by Gerald D. Keller. On May 5, 1977, at the request of the Department, B & K became the licensed provider for Krestview and Towne House and G & J became the landlord. Both landlord and tenant were wholly owned by the same parent corporation. Since Medicaid rules and regulations prohibited the payment of rent by a provider to a related-party landlord, Keller arranged in May of 1977, for the sale of the stock of B & K to unrelated parties in an arm's-length transaction. Petitioner's assignor, B & K, entered into written provider agreements with the Department for the operation of the two nursing homes. That provider agreement states, in pertinent part, that: In instances of non-payment or underpayment conditions due to error(s) not attributable to provider who has furnished nursing home services and care to persons properly certified and eligible, the single state agency (HRS) shall make payment to the provider upon receipt of properly completed claims documents. (Petitioner's Exhibit 13, 13a.) (Emphasis added.) During 1978 and 1979, the Department set reimbursement rates for B & K inconsistently. During this period of time, B & K experienced at least eight different retroactive increases or decreases in a period of less than twelve months. Additionally, the relationship between the parties was increasingly strained during 1978, as evidenced by Petitioners Exhibit 18, in which a medicaid audit evaluation and review analyst, in considering cost factors at Krestview, speculated that the "Ohio group would get out of the business in Florida." In August, 1979, the independently owned B & K d/b/a Krestview Nursing Home and Towne House Convalescent Center, filed a petition in bankruptcy. Among its creditors were G & J, the landlord, which filed a secured claim in excess of $300,000 for unpaid rents. At that time B & K had not yet filed cost reports for its fiscal year ending May 31, 1979, and had filed no cost reports for the period May 31 through August 31, 1979. The trustee made a determination to file those cost reports on behalf of the bankrupt if the cost reports could be prepared. The trustee requested B & K's former accountant to prepare the cost reports. When it became apparent that the accountant was unwilling to prepare the reports without a substantial advance payment and that no funds were available to pay for such services, the trustee looked elsewhere. Keller's holding company, Suburban, owned the stock of Nursing Home Consultants, Inc., an Ohio corporation engaged in the business of providing accounting services to health care organizations. Keller had an obvious interest in offering the services of his corporation on a contingent basis since he had a $300,000 secured claim against the bankrupt whose only visible asset was the monies it asserted were due from the Department as a result of reimbursable expenses. The proposal advanced by Keller was accepted by the trustee in bankruptcy, Jennette E. Tavormina, and Judge, Thomas C. Brutton, bankruptcy judge. The court entered an order appointing Nursing Home Consultants to prepare the cost reports. Nursing Home Consultants attempted to obtain the accountant's work papers to begin preparing the cost reports, however, it was not until December, 1980, when faced with possible action from the court, that the accountant made his papers available and the time-consuming tasks of matching checks to invoices, verifying patient records and documenting expenses began. In July of 1981, Nursing Home Consultants completed the first of the cost reports and forwarded it to the trustee. The trustee in turn filed the cost report with the Department. It was returned to Nursing Home Consultants because the person who had certified the reports was not a certified public accountant in Ohio. Nursing Home Consultants had the returned cost report recertified by an independent firm of certified public accountants in Ohio. Considerable time elapsed and as of July, 1982, the cost reports for the second facility had not been completed. Both the trustee and the bankruptcy judge desired to close the estate and ascertain what, if any, assets were present. G & J made a written offer to the trustee to purchase the trustee's right, title and interest and claims, if any, in and to the Medicare/Medicaid cost reports of the bankrupt. In consideration, G & J offered the sum of $5,000 together with the waiver of its claim for rents due and owing from B & K and any and all claims against the estate for the costs and expenses incurred in the preparation of the cost reports. A hearing was held on September 23, 1982, after notice to all creditors, concerning whether G & J's offer should be accepted. The Department appeared at the hearing and opposed the sale. The offer was accepted by the trustee and ratified and approved by the court on September 24, 1982. The objection entered by the Department to the sale was specifically denied. No appeal of the court's order was taken by the Department. On February 7, 1983, G & J, as assignee, under the bankruptcy court's order, filed the cost reports with the Department for review and audit. The Department returned the cost reports outlining its reasons by letter dated March 25, 1983, and set forth above. The cost reports for the period May 5, 1977 through May 31, 1978, were initially submitted by B & K and accepted by the Department on November 1, 1978. The final audit of those reports was not completed until December 26, 1979, for Krestview, and February 15, 1980, for Towne House, after B & K had filed for bankruptcy. While the audit was being conducted, B & K was granted extensions of time for the filing of the 1978-1979 cost reports. After the trustee in bankruptcy was appointed and began the process of attempting to prepare the cost reports, the Department conducted a final audit of the 1977-1978 cost reports. The Department failed to provide either B & K or the trustee with a copy of any proposed audit adjustments. No evidence was presented that B & K or the trustee was given an exit conference where the audit findings were discussed and explained. Instead, the Department distributed the final audit but failed at that time to advise B & K, the trustee or the Bankruptcy Court of any right to challenge the audit pursuant to Section 120.57, Florida Statutes.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department enter a Final Order accepting for audit the cost reports submitted by the Petitioner G & J Investments Corporation, Inc., for B & K Investments, Inc., for the periods May, 1977 through August 1979. DONE and ENTERED this 6th day of February, 1984, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6 day of February, 1984. COPIES FURNISHED: Patricia A. Peoples, Esquire R. Stuart Huff, Esquire 330 Alhambra Circle Coral Gables, Florida 33134 Joseph L. Shields, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Alicia Jacobs, Esquire General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue Whether petitioner has two years' practical experience in nursing home administration within the meaning of Section 468.1695(2)(c)3., Florida Statutes (1987) and Rule 21Z-11.008, Florida Administrative Code?
Findings Of Fact Westminster Oaks, a "retirement village" or "continuing care facility" in Tallahassee, has a clinic, a 60-bed nursing home, an adult congregate living facility and 150 "independent living" units for older people, who are guaranteed nursing home beds, if needed, as their independence ebbs. Before Donald Long began as Westminster Oaks' administrator on December 1, 1986, the position had gone unfilled for two years. By the time he arrived, petitioner Sandra Kelly, formerly director of nursing at Westminster Oaks, had become director of health care services, for the express purpose of gaining the experience necessary to sit for the nursing home administrator licensure examination. She was following in the footsteps of Sue Reeder and five other trainees, of whom three -- all who have finished the program -- have been permitted to sit for the exam from which respondent proposes to bar her. On August 1, 1986, Ms. Kelly assumed supervisory responsibility for the Health Center, which included the nursing home. As director of health care services, she was responsible not only for the nursing home, but also for the clinic and the adult congregate living facility with its 34 places. (All but six were filled at the time of hearing.) The clinic at Westminster Oaks monitors independent residents' blood pressures, and administers B-12 injections, but does not provide home health services. After Sue Reeder left in January of 1988, she was also called upon as needed to manage the resident services department, along with operations of the business office, and the dietary and housekeeping department that related to residents of the independent living units. Even her work in marketing related to the nursing home. Even when called upon to help in other areas, she was not relieved of responsibility for the nursing home, which she had effective charge of at least 95 percent and perhaps 100 per cent of the time. (Testimony of Long) Besides having overall charge, she rotated through each department in the nursing home, managing it; or, as in the case of the housekeeping department which served not only the nursing home but also other facilities in the complex, managing operations as they related to the nursing home. In addition to her nursing home duties, she spent 15 to 20 minutes a day at the adult congregate living facility, more on days when new residents were admitted. She made rounds at the adult congregate living facility quarterly, and accompanied inspectors from the Department of Health and Rehabilitative Services when they inspected. She also met with the clinic nurse three times weekly for fifteen minutes a visit. As director of health care services, she has devoted the overwhelming majority of her time to the nursing home. She has had complete and uninterrupted charge of the nursing home's social services and activities departments, and personally hired the activities director. She also hired a medical records consultant, and oversaw putting the medical records in order for inspection by the Department of Health and Rehabilitative Services. Although she did not hire or fire otherwise, leaving that to department heads, she had the right to do so. At the time of the hearing, she had spent more than 27 months as director of health care services. Although she also devoted some of her time to the adult congregate living facility, and to the clinic, she spent more than two "working years" on nursing home administration, aside from time devoted to the adult congregate living facility and the clinic. As de facto administrator of Westminster Oaks' nursing home, under Mr. Long's supervision, she planned for and helped organize, direct and control all nursing home departments, including social services, and, insofar as they pertained to the nursing home, the nursing, dietary, housekeeping, administration and maintenance departments.
Findings Of Fact The Petitioner owns property in Dade County, Florida, located at 47 Northwest 32nd Place, Miami, Florida. Improvements have been erected on the property. The Petitioner leases the property and improvements to Flordean Nursing Home, Inc., a Florida corporation. The corporation operates a skilled nursing home on the premises, and pays a monthly rent of five hundred dollars to the Petitioner for the exclusive occupation of the property and improvements. The Petitioner is the president and majority stockholder of the corporation, and the administrator of the nursing home. The nursing home is licensed by the Florida Department of Health and Rehabilitative Services. The corporation provides extended care treatment and skilled nursing home services to its clients or patients. The clients pay a single charge for the services which include a room, nursing care, laundry, meals, activities, and medical attentions. Activities include movies, religious services, birthday and other holiday celebrations, and similar functions. The corporation does not and has never simply rented a room to any client. The nursing home is a commercial venture for profit, and it in fact makes a profit. The average age of the nursing home guests is 84. Typically they are admitted through physicians. They become permanent residents. They receive their mail at the home and typically do not leave until they die. The average stay is three years, five months. At the time of hearing the nursing home housed 52 guests in 19 rooms. The rooms are private, semiprivate and three in a room. The petitioner applied for a certificate of registration from the Florida Department of Revenue in June, 1968. The certificate was issued under sales tax number 23-08-102316-82. The Petitioner has paid sales taxes on the monthly rental payments that she has received from the corporation. She is seeking a refund of these taxes for the period from March 1, 1972 through and including May 30, 1978. The corporation does not collect sales taxes from the nursing home guests.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the Respondent enter a final order denying the petitioner's refund application. DONE and ORDERED this 9th day of January, 1979, in Tallahassee, Florida. G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph C. Mellichamp, III, Assistant Attorney General The Capitol, Rm. LL04 Tallahassee, Florida 32304 Jack R. Rice, Jr., Esquire P. O. Box 350838 2424 N. W. First Street Miami, Florida 33135
Findings Of Fact The Petitioner is an elderly lady who is the recipient of benefits pursuant to the "Home Care for the Elderly" program administered by the Respondent pursuant to Section 410.035, Florida Statutes. The subject program is designed to be an alternative to institutionalized care in a nursing home for such elderly, physically disabled citizens as the petitioner, Mrs. Sapp. The program's purpose is to enable such persons to remain in a physically and emotionally wholesome family environment, if at all possible, rather than being forced to reside in a nursing home institution when they are no longer able to care for themselves. In the Petitioner's case, a family member, Mrs. Taylor, is able to provide round-the-clock care for the Petitioner in return for which the Respondent (Department) pays the Petitioner a home care subsidy based upon a flat rate schedule in some way related to the recipient's income (See Exhibit No. 1). The State benefits by such a program since a recipient such as the Petitioner, who qualifies fully for subsidized care in a nursing home, with its substantially greater expense, can be maintained much less expensively at home. On or about July 1, 1980, the petitioner received notice from the Federal social Security Administration that her Supplemental Security Income benefits would be increased due to an increase in the cost of living during the past year. Because of this and because the petitioner had no other "countable income" for the purposes of the Social Security Act benefits, her Supplemental Security Income (551) was raised to $238.00 per month. Upon learning of the increase in the Petitioner's 551 benefits, the Respondent, apparently following the subsidy schedule contained in Exhibit No. 1, reduced the benefits paid to the Petitioner from $96.00 per month to $72.00 per month. The subsidy schedule contained in Exhibit No. 1 makes no allowance for increase in the cost of living, but rather, is apparently based on the "institutional care policy" or based (pursuant to Section 410.035, Florida Statutes) on the minimum payment the recipient would be entitled to for full institutional nursing home care. The State subsidy amounts depicted on Exhibit No. 1 may be within the range of less then 45 percent and more than ten percent of the minimum institutional nursing home care payment pursuant to Section 409.266, Florida Statutes, but there is no showing of the amount of such institutional care benefits. The Respondent described the income received from the federal program and other sources as a dollar-for-dollar "set off" against the income she receives from the home care subsidy program. That contention is not accurate, however, inasmuch as the State subsidy benefit reduction involved herein was not a reduction in the same sum as the subject increase in the federal 551 payment, and additionally, once the State benefits were reduced to the disputed amount of $72.00 per month, then they would remain at $72.00 per month oven if the federal benefits ultimately increased by several hundred dollars. Thus, it is obvious that the federal benefits do not operate as a dollar-per-dollar "set off" against the State benefits normally due. The Respondent's position that the federal benefits are fully countable income in calculating the amount of benefits due in order to provide such a recipient as the Petitioner with her fully allowable income under this Home Nursing Care program, is not an accurate description of the State policy nor the means by which the State benefits are calculated. It is undeterminable how the benefits are calculated or why and in what manner the federal benefits under the SSI program are considered in large part to be "countable income" in determining the Petitioner's financial status and entitlement under the State program. The Respondent apparently arrived at the $24.00 per month reduction in benefits under the Section 410.035 program by applying the Petitioner's new increased income under the federal program to the corresponding chart of State benefits contained in Exhibit No. 1, the origin or derivation of which was not shown. There was no definitive showing of the amount of relevant nursing home care payments which the Petitioner would be entitled to if she were confined in a nursing home, and thus no means to calculate the fractional portion thereof due the Petitioner as a subsidy for home nursing care pursuant to the program under discussion.
Recommendation Having considered the competent, substantial evidence of record, the foregoing Findings of Fact and the Conclusions of Law, it is concluded that competent, substantial evidence has not been presented which will sustain the Respondent's burden of proving adequate justification for its reduction of the Petitioner's Home Care for the Elderly benefits. It is, therefore, RECOMMENDED that the Petitioner continue to receive the benefits in the amount of $96.00 per month which she was receiving prior to the agency action herein involved and that Home Care for the Elderly benefits withheld from her pursuant to the agency's action be restored. DONE and ENTERED this 6th day of November, 1980, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1980. COPIES FURNISHED: Mrs. Ada Sapp Route 3, Box 137 Cottondale, Florida 32431 John L. Pearce, Esquire District II Legal Counsel Department of Health and Rehabilitative Services 2639 North Monroe Street Suite 200-A Tallahassee, Florida 32303
The Issue The issue to be resolved in this proceeding concerns whether the Petitioners may recover certain costs expended for hiring additional staff, related to patient care and operating changes allegedly made to comply with existing state or federal statutes or rules, by means of the requested interim rate increases.
Findings Of Fact The Respondent, Agency for Health Care Administration (AHCA), as successor-in-interest to the Department of Health and Rehabilitative Services, is the state agency responsible for administering the Florida medicaid program. The nursing home section of the medicaid cost reimbursement division is responsible for setting the rates for Florida nursing homes. That section is also responsible for granting or denying interim rate requests. The office of licensure and certification (OLC), a division of the Agency for Health Care Administration, provides overall regulation for the nursing home industry in the State of Florida. The Petitioners were licensed by the State of Florida as nursing homes and certified for participation in the Florida medicaid program at all pertinent times. The Petitioner, Crestview Nursing and Convalescent Center (Crestview), is a 180- bed nursing home certified to and participating in the Florida medicaid program. It is located in Crestview, Florida. The Petitioner, The Bluffs, Inc., d/b/a The Bluffs Nursing Home (The Bluffs), is a 120-bed nursing home certified to and participating in the Florida medicaid program. It is located in Pensacola, Florida. The Florida medicaid Title XIX nursing home plan (reimbursement plan) is a prospective plan. Costs incurred in a cost-reporting period are submitted on a cost report. Medicaid reimbursement rates based upon such cost reports are then limited by a "target rate" which is facility specific. The target rate is based upon the previous semester's rate times 1.50 of the inflationary factor for that time period in the medicaid program- mandated formula. The nursing home then receives the lower of the costs actually incurred plus the true inflation factor or the nursing home target rate. It happens on occasion that a nursing home may incur additional costs for patient care or operating changes in a particular reporting period, as a result of complying with existing state or federal laws or regulations. In order for the nursing home not to suffer financially due to these additional costs, the reimbursement plan has an allowance for an interim rate increase request. If the interim rate provision were not in the reimbursement plan, the nursing home would never be able to fully recover the increased costs because of the prospective nature of the reimbursement plan and the restrictions of the target rate calculation. Thus, if Crestview and the Bluffs were not permitted an interim rate increase, they would lose the cost coverage from the medicaid program for subsequent years because the reimbursement rates are based upon the previous years' costs and are limited by the target rate calculation. The parties have stipulated that Crestview and The Bluffs have met the threshold requirements set out for an interim rate increase since the costs for which reimbursement is requested are at least $5,000.00 of increase and because the requested rate change would be 1 percent or more of the provider's total per diem rates. Crestview was cited by AHCA's OLC for repeat deficiencies in the areas of nutritional care and related weight loss by residents, decubitus care, and restraints utilization, in surveys conducted by that agency in July of 1991, November of 1991, and two surveys in February of 1992. These citations were for quality of care conditions recognized by the inspectors, as well as Lois Petty, director of nursing services for Crestview, as constituting violations of state and federal laws, rules and standards. Crestview maintains that it attempted to correct the cited violations by utilizing its existing staff, but was unsuccessful, and contends that it would not have been possible to come into compliance with the state and federal laws involved concerning quality of care without the costs of the additional staff that it hired and for which it seeks the interim rate increase. Scant evidence was presented to establish what the efforts to come into compliance using existing staff consisted of, however. There is no question that there were significant violations of relevant regulations in the areas found during the AHCA surveys concerning quality of patient care, referenced above. It is significant to note, however, that in the years immediately prior to the year of the beginning of the relevant surveys (1991) or, in essence, from 1987 through 1990, the Crestview facility enjoyed a superior or standard rating with the same numerical staff complement. This indicates that a great deal of inadequacies in quality of patient care resulted from personnel management and operational management problems at the facility, rather than merely that the staff in the relevant nursing positions was numerically inadequate. Corollarily, it is equally noteworthy that no inadequacies in numbers of staff and the required staff positions was noted by the surveyors. Crestview, both before the surveys were made and during the surveys, was staffed with more than the minimal staffing requirements and staff positions provided for in Title 10D, Florida Administrative Code. It thus cannot be found that all of the staff members hired by Crestview in response to the surveys and deficiencies noted by AHCA were necessary to come into compliance with the state and federal laws involved. Some additional staffing was necessary for this purpose however, because of the recent increase in resident population. After the November, 1991 survey by AHCA, Crestview added two licensed practical nurse (LPN) positions in response to the deficiencies cited by AHCA and based upon Ms. Petty's observations. The primary functions of one of the LPNs was to monitor and evaluate restraint use, and the other LPN position was created to address the nutritional status of the residents, including monitoring the dining room, meal intakes, and assuring that dietary supplements were given. These two positions were approved by the agency, as set forth in Mr. Hughes' letter of September 9, 1992. Mr. Hughes is the agency official charged with approving interim rate requests. These two positions were approved September 9, 1992. Crestview added a third nurse position to address the problem of decubitus or "pressure sores" experienced by many residents in the nursing home. This nurse was to monitor the new pressure sore prevention program instituted by Crestview, doing skin observation "rounds" and skin reports. The nursing home had been cited by AHCA for its high decubitus rate and lack of proper treatment of the pressure sores. Ms. Petty opined that the nurse position was needed in order to attend to the significant decubitus rate and to bring the facility into compliance with state and federal laws. Crestview also hired seven certified nursing assistants (CNA). The Department, in granting interim rates, allowed for the equivalent of three of those positions at the cost that Crestview attributed to those positions, as set forth in Mr. Hughes' letter of September 9, 1992. That cost represents the cost for hiring such personnel at the contract nursing pool rate obtainable through the nursing home operation consulting firm which Crestview retained and paid and for which expense it also sought interim rate reimbursement increases. In fact, the amount allowed for three such positions and the two nurse positions by the agency, in its free-form decision by Mr. Hughes, would actually pay for all of the positions sought for rate approval by Crestview if they were paid at what Mr. Hughes established to be a reasonable cost level, meaning what a "prudent and cost- conscious buyer" seeking to hire such personnel in the nursing home industry would typically pay for such a given service. The seven CNA positions were created by Crestview to provide the resident care services and functions depicted in paragraphs 13-16 of the Petitioners' proposed findings of fact and shown by Ms. Petty's testimony. Crestview maintains that these positions were created so as to bring the facility into compliance with the state and federal laws addressing the various quality of care deficiencies for which the facility was cited by AHCA. It was not proven, however, for the reasons found above, that, indeed, all of those positions were necessary in order to bring the facility into such compliance. It has not been demonstrated by a preponderance of the evidence that the five equivalent positions approved by the Department for Crestview would not have been sufficient to bring the facility into compliance with existing state or federal laws, rules or standards. In fact, sufficient evidence was not adduced to establish that proper performance by the director of nursing, in supervising personnel and operations of the facility, by the facility's administrator, and the entity owning and managing the facility, could not have brought the facility into compliance with pertinent laws and standards with little or no additional staff. The facility had enjoyed superior or standard ratings without the additional staff in the years immediately prior to the year in which the problems were found. In any event, Mr. Hughes's testimony, and to some extent, that of Ms. Gonzales, as well as the testimony of the Petitioner's witnesses upon cross- examination, establish that the five position equivalencies approved by the Department would be sufficient to bring Crestview into compliance with pertinent laws and rules, especially in view of the testimony of Mr. Hughes, which is accepted, that the amount approved for the positions would, in reality, fund all ten positions requested if the nursing home hired them at ordinary, reasonable and accepted rates in the industry, rates commonly approved by the medicaid system and plan. Crestview contends that because of the isolated and small labor market for such nursing personnel in the Crestview vicinity, it had to resort to the nursing home consulting firm and "nursing pool" in order to obtain, at the contract costs proposed, the nursing personnel in question. The Petitioners' evidence does not establish that it made significant efforts to hire the personnel itself, at the rates which the Department showed are ordinary and reasonable, without resort to the greater cost attributable to obtaining personnel through the consulting firm and contract nursing labor pool. Consequently, a preponderance of the evidence establishes that the interim rate request approval level determined by the Department in the free-form stage of this dispute is, indeed, an appropriate level under the circumstances established by the evidence of record. This is particularly appropriate because of the finding by the agency, established in this record, that an across-the- board wage increase of over $100,000.00 had been granted its employees by Crestview in the summer of 1992, shortly before the interim rate increase request was submitted. The interim rate increase request was not submitted until Crestview also became liable for significantly-increased costs for contract pool labor, which began to increase in June and July of 1992. In fact, all of the personnel contended by Crestview to be necessary had been hired and on the job since March of 1992 and yet the interim rate increase was not applied for until after the contract labor costs and the wage increases occurred. The agency thus granted an interim rate increase of some $223,000.00 out of approximately $500,000.00 requested, which was shown to cover the cost of ten regularly-compensated personnel of this type, based upon the reasonable cost basis for that kind of labor, as shown by the testimony of Mr. Hughes. The medicaid reimbursement plan only pays "allowable costs", which are those costs shown by Mr. Hughes, which should not exceed what a prudent and cost-conscious buyer would pay for a given service. The Bluffs was cited by the OLC to be deficient under licensure regulations for failing to properly document injuries to various residents and for failing to document decubitus ulcers (pressure sores) and nutritional problems among the nursing home residents. The deficiencies cited did not include any determination by the surveyors that additional staff was needed. Although the deficiencies involved record-keeping errors, whereby The Bluffs was failing to document and track residents with decubitus ulcers and residents with weight-loss problems, if a nursing home is not adequately tracking and recording such problems, then it tends to overlook and fail to adequately treat them. The lack of proper records concerning decubitus ulcers and nutritional deficiency makes it difficult to institute and consistently follow a treatment regimen for the decubitus ulcers and the weight loss problems and a consistently-effective prevention program, involving "skin rounds" and regular "turning" of patients who are unable to turn over in bed. The Bluffs was not cited for failing to treat pressure sores but, rather, for failure to document their presence, which can make it difficult to consistently monitor and treat them. Both before and after the citations, The Bluffs employed a director of nursing who is responsible for ascertaining that residents' injuries, weight loss, or decubitus ulcer problems are documented and that treatment therefor is obtained. Although The Bluffs was not directly cited for failing to maintain good nutritional status or because residents had pressure sores, the testimony of Ms. Petty establishes that the facility was not in compliance with existing state or federal laws, rules or standards in the area of maintaining good nutritional status and insuring that residents were receiving necessary treatment to promote healing and prevention of pressure sores. In the belief that it was unable to correct the deficiencies with its existing staff, The Bluffs hired a registered nurse (RN), an LPN, and a CNA. The CNA position was created to obtain weights and to assist with the feeding, including supplements, to offer alternatives for nourishment to residents, as well as to assist with daily skin rounds and to assist with the "positioning program" in order to bring the facility into compliance in the view of The Bluffs, concerning deficiencies in nutritional care and decubitus care. An LPN position was created in order to take care of the nutritional status of the residents, to assess weight variances in residents, to monitor meal and nourishment intake and also to act as a dining room supervisor. This position was created, according to The Bluffs, in order to bring the facility into compliance with good nutritional status for the residents and to address the problem of pressure sores. The Bluffs also created an RN position, responsible for the pressure sore prevention program and treating existing decubitus. This person makes daily skin rounds on all residents and is responsible for identifying those at risk of developing decubitus and assessing and evaluating the process of healing and notification of physicians if treatment alternatives are needed. This person is also responsible for monitoring the positioning program to make sure that the residents are placed in proper positions and that pressure-relieving devices are employed. This RN also does weekly assessments of pressure sores. In response to the deficiencies cited and those observed by Ms. Petty, there was developed at The Bluffs and Crestview a pressure sore positioning program and a meal monitoring program. There is no doubt, as shown by the testimony of Ms. Petty, that there was a serious problem with the provision of patient and nursing care to the residents at each facility. The Petitioners each were given conditional licenses after the initial inspection and notice of deficiencies. After the addition of the above- mentioned personnel and program corrections The Bluffs has brought its rating up to a standard rating. It will likely achieve a superior rating on its license this upcoming year. Crestview has moved from a conditional rating to a superior rating. The Petitioners maintain that the individuals hired at the facilities were hired prior to the request for an interim rate increase, have been maintained during the time of that increase request and are full-time positions. It was not shown, however, that the positions added at The Bluffs actually were required to be hired in order for the facility to maintain compliance with state or federal laws, rules, and relevant standards. While there is no doubt that the addition of these personnel and the hiring of the quality assurance consulting firm, at $6,000.00 per year, helped bring the two facilities into compliance with existing laws and included the imposition of systems devised by the consulting firm designed to provide training for the staffs, it was not actually demonstrated to be required in order to bring the facilities into compliance. The record reveals, as was the case with Crestview, that The Bluffs enjoyed superior or standard ratings in the years immediately prior to the year when the deficiencies were noted in the survey. It was not demonstrated by preponderant evidence that the standards became significantly more stringent in the year when the deficiencies were found. There is evidence from which an inference can be drawn that the director of nursing and the administration of the nursing home at The Bluffs was not managing and operating the facility correctly and efficiently in terms of nutrition and prevention and treatment of decubitous ulcers. All of these duties, which were assigned to the three new personnel in order to remove the "cloud" on The Bluffs' license, were duties that existing staff were required to perform in the first place. The evidence reveals, given the prior superior ratings, with the same original amount of staff, that had The Bluffs' staff been managed and trained properly, the deficiencies would not have occurred. If there was a problem with individual staff members, including the director of nursing, then those people could be removed from the staff complement, moved to other positions or simply trained and admonished in how to perform their job correctly so as to prevent the referenced deficiencies. It was not shown that the additional staff to correct the deficiencies was actually necessary in order to bring the facility into compliance with relevant law. The additional staff no doubt had that effect; but the extra expense to alleviate the deficiencies by that method, including the fee paid to the consulting firm, was not justified. Consequently, the interim rate increase for The Bluffs should be denied.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is RECOMMENDED that a Final Order be entered denying the interim rate request by The Bluffs Nursing Home and granting a rate increase to Crestview Nursing and Convalescent Center in the amount and in the manner found and concluded above. DONE AND ENTERED this 1st day of April, 1994, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 93-0915 AND 93-1542 Petitioners' Proposed Findings of Fact 1-8. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and as not supported by the preponderant evidence of record. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, to the extent that it depicts the duties of the additional nurse and Ms. Petty's view of the necessity but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not to the extent that it is a finding that all seven CNAs were necessary. 13-16. Accepted, to the extent that these findings of fact depict what the duties of the personnel hired were, but not to the extent that it establishes that all were necessary to bring the facility into legal compliance. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and as not being supported by the preponderant evidence of record. Accepted. Rejected, as not being supported by the preponderant evidence of record. 20-24. Accepted, but not to the extent that it is found that the positions were actually necessary in order to bring the facility into legal compliance. Rejected, as contrary to the preponderant weight of the evidence and the Hearing Officer's findings of fact on this subject matter. Rejected, as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not itself dispositive of any material issues. 28-30. Accepted. 31. Rejected, as not being in accordance with the preponderant weight of the evidence. 32-33. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and not entirely supported by the preponderant evidence of record. Accepted, as to the motivation of the nursing home administration in terms of why the hiring was done but not to the extent that it is agreed by the Hearing Officer that the hiring was necessary. Accepted. Rejected, as contrary to the preponderant weight of the evidence and the Hearing Officer's findings of fact on this subject matter. Rejected, as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter. 39-40. Accepted. 40-48. Accepted, but not necessarily as to the material import advanced by the Petitioners. 49. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Respondent's Proposed Findings of Fact 1-22. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. 23-33. Accepted. COPIES FURNISHED: Jonathan S. Grout, Esquire GOLDSMITH & GROUT, P.A. 307 West Park Avenue Post Office Box 1017 Tallahassee, Florida 32302-1017 Gordon B. Scott, Esquire Agency for Health Care Administration 1317 Winewood Boulevard Building Six, Room 271 Tallahassee, Florida 32399-0700 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Harold D. Lewis, Esquire General Counsel Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303
The Issue The issue in this case is whether Respondent committed the allegations in the notice of intent to assign a conditional license and, if so, whether Petitioner should have changed the rating of Respondent's license from standard to conditional for the period June 14 through August 10, 2001.
Findings Of Fact Petitioner is the state agency responsible for licensing and regulating nursing homes inside the state. Respondent operates a licensed nursing home at 1120 West Donegan Avenue, Kissimmee, Florida (the "facility"). Petitioner conducted an annual survey of the facility from May 7, through May 10, 2001 (the "May survey"). Petitioner conducted a follow-up survey of the facility on June 14, 2001 (the "June survey"). The May survey cites one Class III violation. The June survey cites a repeat deficiency of a Class III violation. Subsection 400.23(8)(b) and (c), Florida Statutes (2000), refers to deficiency classifications as Class I-III deficiencies. All statutory references are to Florida Statutes (2000) unless otherwise stated. Section 400.23(8)(c) defines Class III deficiencies as those deficiencies . . . which the agency determines to have an indirect or potential relationship to the health, safety, or security of the nursing home facility residents, other than class I or class II deficiencies. The statutory definitions of Class I and II deficiencies are not relevant to this case because this case involves only a Class III deficiency. Florida Administrative Code Rule Rule 59A-4.1288 requires nursing home facilities licensed by the State of Florida to adhere to federal regulations in Section 483 of the Code of Federal Regulations ("CFR"). All references to rules are to rules promulgated in the Florida Administrative Code on the date of this Recommended Order. In relevant part, Rule 59A- 4.1288 provides: Nursing homes that participate in Title XVIII or XIX must follow certification rules and regulations found in 42 CFR 483, Requirements for Long Term Care Facilities, September 26, 1991, which is incorporated by reference. Applicable federal regulations require Petitioner to assign a scope and severity rating to the deficiencies alleged by Petitioner. Petitioner assigned a "D" rating to the deficiencies alleged in the May and June surveys. A “D” rating means that there is no actual harm with potential for more than minimal harm that is not actual jeopardy. When Petitioner alleges that the Class III deficiency from the May survey was not corrected within the time established by the agency, the agency may change the rating of the facility license from standard to conditional. Petitioner determined in the June survey that the facility had not corrected the deficiency alleged in the May survey. Effective June 14, 2001, Petitioner changed the rating of the facility's license from standard to conditional. Petitioner noted the results of the May and June surveys on a Health Care Federal Administration form entitled "Statement of Deficiencies and Plan of Correction." The parties refer to the form as the HCFA 2567-L or the "2567". The 2567 is the document used to charge nursing homes with deficiencies that violate applicable law. The 2567 identifies each alleged deficiency by reference to a tag number (the "Tag"). Each tag on the 2567 includes a narrative description of the allegations against Respondent and cites a provision of relevant state rules violated by the alleged deficiency. There is only one tag at issue in the May and June surveys. It is Tag F282. In order to protect the privacy of nursing home residents, Tag F282, the 2567, and this Recommended Order refer to each resident by a number rather than by the name of the resident. Tag F282 alleges in the May and June survey that the facility failed to satisfy the requirements of 42 CFR Section 483.20(k)(ii). In relevant part, the federal regulation provides: Comprehensive Care Plans. (3). The services provided or arranged by the facility must— (ii) Be provided by qualified persons in accordance with each resident’s written "plan of care." This standard is made applicable to nursing homes in Florida pursuant to Rule 59A-4.1288. Tag F282 does not allege that the facility provided care to residents by unqualified persons. Rather, Tag F282 alleges that Respondent failed to follow the plan of care for two residents. Tag F282 alleges in the May survey that the facility failed to provide care and services in accordance with the plan of care for Residents 3 and 1. Tag F282 alleges in the June survey that Respondent failed to follow the plan of care for Resident 1. The resident identified as Resident 1 is not the same resident in the May and June surveys. Before proceeding to the merits of the allegations in Tag F282, two policy issues must be resolved in order to make findings of fact in a manner that is consistent with Petitioner's officially stated agency policy. One issue is procedural and the other involves the definition of terms. Petitioner promulgates an officially stated policy in written guidelines entitled the State Operations Manual (the "Manual"). The Manual states agency policy regarding the interpretation and application of the regulatory standards surveyors must enforce. The Manual authorizes surveyors to determine whether a facility has complied with Tag F282 only after surveyors have identified violations of standards relating to: quality of care, defined in 42 CFR Section 483.25(a)–(m); quality of life, defined 42 CFR Section 483.15(a)–(h); or residents rights, defined 42 CFR Section 483.10(a)–(o). The state agency's written policy set forth in the Manual requires its surveyors to identify an issue of quality of care, quality of life, or residents’ rights before proceeding to a determination of whether the facility has violated Tag F282. The second issue involves the interpretation of the terms "inadequate", "incorrect", and "consistent." The Manual indicates that violations occur if surveyors can demonstrate inadequate or incorrect implementation of the care plan. The Manual does not define the term “inadequate.” The common meaning of the term suggests that something less than perfect implementation satisfies the requirements of the regulatory standard. That construction is consistent with other provisions in the Manual. The Manual further provides that violations of standards occur only if a facility fails to “consistently” implement the plan of care for a resident. Petitioner's surveyors acknowledged in their testimony that the goal for the quality of care regulations is to achieve positive resident outcomes and is identical to the goal of Tag F282. Petitioner offered no credible reason, within the meaning of Section 120.68(7)(e)3, why the standard for implementation of a resident’s care plan under Tag F282 should be stricter than that required by the quality of care regulations. Resident 3 had many compromising conditions and was near death at the time of the May survey. Resident 3 had 10 to 12 care plans to address his various medical problems and conditions. Each care plan contained an average of 15 separate interventions. One of the care plans for Resident 3 addressed the risk of developing pressure sores and contained 20 separate interventions for staff to implement. One intervention required staff to turn and reposition the resident every two hours. On May 7, 2001, a surveyor stationed herself outside of Resident 3’s room from 1:00 p.m. to 4:00 p.m. in the afternoon to observe who entered the resident’s room and what care was given to the resident. During that time, the surveyor observed that no staff member entered the room to turn and reposition the resident. The care plan required staff to turn the resident once during the three-hour period. The allegations in Tag F282 pertaining to the failure to reposition Resident 3 during a three-hour period on May 7, 2001, deviate from Petitioner's written agency policy in two respects. First, Petitioner did not cite the facility for any violation relating to quality of care, quality of life, or resident rights. Second, a single isolated failure to implement one intervention prescribed in one of 12 care plans for Resident 3, during a three-hour period, on one of four days of a survey, does not demonstrate inadequate care by failing to consistently implement a care plan. Petitioner failed to explain by a preponderance of the evidence why it deviated from its official written policy in its determination that Respondent violated the standard prescribed in Tag F282. The surveyor provided no credible explanation to justify a deviation from agency policy with respect to Resident 3. Nor did Petitioner present any evidence that Resident 3 developed any pressure sores or had any pressure sores worsen as a result of the failure to turn and reposition the resident on May 7, 2001. The evidence shows that the failure to turn and reposition Resident 3 presented nothing more than a minimal chance of negative impact. Tag F282 alleged in the May survey that the facility failed to provide care for Resident 1 in accordance with the care plan. Resident 1 suffered from a condition that caused his chin to droop toward his chest. The condition caused positioning problems for the resident while he was in his wheelchair. The physical therapist for the facility examined Resident 1 and recommended periodic placement of a Futuro cervical collar while the resident was in his wheelchair in order to elevate the resident's chin. The recommendation required staff to place the collar on the resident when he was in his wheelchair for two hours and then to remove it for two hours. Staff was not to place the collar on the resident during meals or while the resident was in bed. The resident would sometimes remove the collar after it was placed on him. On May 8, 2001, Petitioner’s surveyor made five observations of the resident between 10:45 a.m. and 1:50 p.m. The surveyor did not see the resident wearing the collar during any of the observations. The observations of the surveyor were intermittent. The surveyor did not observe Resident 1 continuously from 10:45 a.m. until 1:50 p.m. The surveyor did not know if or when the collar should have been placed on the resident during the observations on May 8, 2001. It is uncontroverted that the resident would have eaten lunch for one hour during the time that the surveyor observed the resident and that the care plan did not require staff to place the collar on the resident during meals. Petitioner offered no evidence that the failure to put the collar on the resident during the observed instances presented potential for any harm to the resident. Petitioner failed to show by a preponderance of the evidence that the facility failed to implement Resident 1’s care plan. Even if it were determined that the facility failed to consistently implement the care plan or inadequately implemented the care plan, Tag F282 deviates from Petitioner's officially stated agency policy because the tag does not charge the facility with any violation of quality of care, quality of life, or resident rights. Petitioner failed to explain why it deviated from its policy. Finally, the observed circumstances presented no more than a minimal chance of minor negative impact to Resident 1. On May 9, 2001, Petitioner's surveyor observed Resident 1 on three different occasions between 10:00 a.m. and 11:05 a.m. without the collar. The surveyor did not know if or when the collar should have been placed on the resident during that time-period. The observations of the surveyor were intermittent. The surveyor did not observe Resident 1 continuously from 10:00 a.m. until 11:05 a.m. The preponderance of the evidence failed to sustain the charge that the facility did not implement Resident 1’s care plan on May 9, 2001. The observations are insufficient to demonstrate a consistent failure to implement the care plan. Petitioner provided no credible explanation for deviating from its officially stated agency policy. Finally, the circumstances presented no chance of any harm other than minimal negative impact to the resident. Tag F282 alleges in the June survey that the facility failed to follow doctor’s orders for Resident 1 that required multi-podus boots to be applied every shift. Resident 1 in the June survey is not the same resident identified as Resident 1 in the May survey. Resident 1 in the June survey had pressure sores on his feet, and one of the interventions prescribed in the care plan required Resident 1 to wear multi-podus boots. On June 13, 2001, at 2:45 p.m., Petitioner's surveyor observed Resident 1 lying in bed without the required multi- podus boots. Resident 1 was lying on a pressure-relieving mattress so that his heels were receiving pressure relief without the need for multi-podus boots. On June 14, 2001, Petitioner's surveyor observed Resident 1 in his wheelchair in the activities room with black, hard-soled shoes on his feet instead of the multi-podus boots. The resident had dressings on his heels that protected them and was sitting so that his heels bore no weight. The facility maintained medical records that described the size and appearance of the pressure sores on Resident 1's heels. The records indicated that the pressure sores healed progressively after Respondent admitted Resident 1 to the facility. The area on the right heel was completely healed by June, 2001, and the area on the left heel was closed by July 2001. Petitioner deviated from its officially stated policy in two respects. First, Petitioner did not charge the facility with any violation of a quality of care, quality of life, or residents rights. Second, the instances observed by the surveyor do not demonstrate a failure to consistently implement the plan of care or a failure to provide adequate care. Petitioner offered no credible explanation for deviating from its policy. The events observed by Petitioner's surveyor, at most, presented the potential for causing no more than a minor negative impact on the resident.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration should enter a final order revising the May 10 and June 13, 2001, survey reports to delete the deficiency described under Tag F282, and replace the previously issued Conditional rating with a Standard rating. DONE AND ENTERED this 5th day of March, 2002, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 5th day of March, 2002. COPIES FURNISHED: Dennis L. Godfrey, Esquire Agency for Health Care Administration 525 Mirror Lake Drive North, Room 310L St. Petersburg, Florida 33701 R. Davis Thomas, Jr. Broad & Cassel 215 South Monroe Street, Suite 400 Post Office Box 11300 Tallahassee, Florida 32302-1300 Diane Grubbs, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
