Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings. Petitioner, Stacey Health Care Centers, Inc., is licensed to operate Riverside Care Center, located at 899 Northwest Fourth Street, Miami, Florida, as a nursing home in compliance with Chapter 400, Part I, Florida Statutes, and Chapter 10D-29, Florida Administrative Code. On July 9, 1986, James A. Bavetta, assistant area supervisor, Office of Licensure and Certification, made a visit of Riverside's facility and determined that Ralph Stacey, Jr., the administrator of record, was acting in the capacity of administrator for two facilities, the subject facility and another facility in Kentucky, without having a qualified assistant administrator to act in his absence. (Respondent's Exhibit 1) Ralph L. Stacey Jr., is a licensed nursing home administrator in the States of Ohio, Kentucky and Florida. He has been licensed in Kentucky and Florida since 1974. At the time of Mr. Bavetta's visit and inspection during July, 1986, Ralph Stacey, Jr., was in Cincinnati, Ohio preparing the payroll for Stacey Health Care Centers. During this time period, Ralph Stacey, Jr., served as the administrator for the subject facility, Riverside Care Center, and another facility in Kentucky and did not have a qualified assistant administrator employed to act in his absence. However, once Mr. Bavetta issued his recommendation for sanctions, Petitioner, as part of its plan of correction, has employed a licensed administrator who is presently on staff and serves as Riverside's assistant administrator during the administrator's absence.
Recommendation Based on the foregoing findings of fact and conclusions of lawn it is RECOMMENDED: The Department of Health and Rehabilitative Services enter a Final Order imposing an administrative fine in the amount of One Thousand Dollars ($1,000.00) upon Stacey Health Care Centers- Inc., d/b/a Riverside Care Center, which amount shall be payable to Respondent within thirty (30) days after entry of Respondent's Final Order. RECOMMENDED this 18th day of September, 1987, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 18th day of September, 1987. COPIES FURNISHED: Kenneth S. Handmaker, Esquire MIDDLETON & REUTLINGER 2500 Brown & Williamson Tower Louisville, KY 40202-3410 Leonard T. Helfand, Esquire Office of Licensure and Certification Department of Health and Rehabilitative Services 5190 Northwest 167th Street Miami, Florida 33014 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 R. S. Power, Esquire Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard -Building One, Room 407 Tallahassee, Florida 32399-0700
Findings Of Fact Veazey's Restorium was operated in Tampa for many years as a skilled- care 72-bed nursing home by George Veazey, Jr. and his wife, Fairolene Veazey, as owners. During the years here involved, Respondents contracted with the Social and Economic Services program office to provide services as a skilled nursing home. The Florida Medicaid Program permits payment for services performed based upon a recognized maximum or reasonable costs plus 6 percent, whichever is lower. The charges here disputed are directly related to the computation of patient costs authorized to be paid to Respondent for Medicaid patients. In 1972, Raymond Kernon and his wife, Jacqueline, bought into the business and Mrs. Kernon, a professional registered nurse, took over as Director of Nursing at the facility. A new nursing home was constructed containing 120 beds and the patients were moved to the new facility in August, 1973. In 1976 the Kernons purchased the Veazeys' interest in the nursing home and changed the name to Kernon's Su Casa. The land on which the new facility is built is owned by Ve-Ker, a corporation whose stock is owned by the owners of the nursing home. No specific testimony was submitted regarding the land ownership except that of Mrs. Kernon, who testified she and her husband owned the Ve-Ker corporation. It appears from the corporate name that the Veazeys originally were shareholders of the corporation, but no evidence on this was presented. It was not contested that common ownership of the land and the nursing home existed. During 1972 Raymond Veazey, the brother of George L. Veazey, Jr., was the administrator of the nursing home. In 1973 George Louis Veazey, III, the son of the owners, was administrator. George L. Veazey, Jr. was in charge of the kitchen prior to the hiring of a dietician subsequent to fiscal year 1973. During this period he made up menus and bought groceries, laundry and medical supplies. He ran errands for patients, carried them for doctor's visits, shopping, and acted as general handyman while not occupied in the kitchen. He had no job title in 1972 but in 1973 his title was Kitchen Supervisor. Prior to his departure in 1976, he acted as a general handyman and performed numerous tasks, the principal one being purchasing agent. Upon his departure no one was hired to replace him. No testimony was presented regarding the duties performed by Raymond Veazey or George Louis Veazey, III, while they were assigned as administrator. This is significant only to show that if they performed as full-time administrators and did not have time to perform the duties for which George L. Veazey, Jr. was paid, the latter's work was necessary and beneficial. In 1972 George L. Veazey, Jr. was in charge of the kitchen and purchased supplies for the home, George L. Veazey, III, was assistant administrator and Raymond Veazey was the administrator. By allowing only the salary for one administrator to perform all of these functions in a 72-bed nursing home, Petitioner disallowed $10,954 of the total salary expense for these three people. In addition, Petitioner disallowed $5,300 of the salary paid to Fairolene Veazey. Mrs. Veazey's testimony respecting her duties, which was submitted by affidavit after the hearing concluded, shows that many of the functions she performed were necessary and proper and that the disallowance of more than $3,000 of her total salary was not appropriate. Other items disallowed by Petitioner in the audit included: $1,525 in telephone directory advertisement. No evidence was presented to rebut Petitioner's testimony that the purpose of this advertising was to entice patrons to the nursing home; Cost of officers' life insurance policy where the provider was the beneficiary. No evidence was presented to rebut the testimony that the provider was a direct beneficiary of this policy or policies. Cost of an administrator's license in the amount of $87. No evidence was presented to show a need for more than one administrator at a 72- bed facility. Rent in the amount of $86,640 apparently allocated but never paid to the Ve-Ker corporation. No evidence was submitted that this rent was actually paid, or that the Ve-Ker corporation was not owned by the same shareholders that owned the nursing home. Similarly, with respect to the 1973 audit, the $1,644 for directory advertising and rent expense in the amount of $87,360 were disallowed for the same reasons as these items were disallowed in 1972 and no evidence was presented to show this disallowance to be in error. Salaries in 1973 for owners was again reduced to the maximum salary for one full-time administrator and the maximum salary for a full-time director of nursing. This reduced the salaries to $21,004 in administration from more than $50,000 paid to owners, George Veazey, Jr., George Veazey, III, Jacqueline Kernon, Fairolene Veazey, Ramond Kernon and Ray Estes, son-in-law of Kernon. No evidence was presented indicating that George L. Veazey, III, was fully occupied as administrator and could not have performed some of those services which his father actually performed and for which compensation was disallowed. Similarly no evidence was presented that Kernon or his son-in-law provided services beneficial to the patients. Evidence presented would indicate that no salary was approved for anyone other than the Administrator and Director of Nursing. Fifty percent of the salaries claimed for those other owners should be allowed. Fairolene Veazey obviously performed some beneficial function other than as housekeeper for which compensation could and should be authorized. George Veazey, Jr. was performing an essential function in 1973 for which he is entitled to compensation. Although his position as Kitchen Supervisor was not filled when his services were terminated in 1976, George Veazey, Jr. obviously performed many functions related to patient care. The fact that his specific position was not filled after his departure is not sufficient, standing alone, to say he did not perform essential services related to patient care. Many businesses learn they can do without the services of a particular employee after he leaves, whereas that was not believed true before his departure. The fact this employee was an owner does not change the concept. Fifty percent of Veazey's disallowed salary should be restored. With respect to those items disallowed on the 1976 audit, all of Respondents' evidence was directed at owners' compensation and no evidence was presented by Respondents to rebut Petitioner`s witnesses who stated the following expenses are not allowed because not patient-related: Forgiveness of a note receivable from George Veazey, Jr. in the amount of $28,774 in connection with Provider's purchase of Treasury stock. Professional fees incurred by Provider in connection with buy-out agreement with George L. Veazey, Jr. in the amount of $2,150. Interest paid to Randolph Kernon of $1,475. Offset of undocumented miscellaneous revenue against general and administrative expenses in amount of $1,215. Legal expenses in the amount of $330. Interest expense on loan from former shareholder in the sum of $4,414. Provider. Sales tax totaling $2,747 by Ve-Ker on rents collected by Employee benefits on disallowed salary. This item covers several owners' salaries which were disallowed. No evidence was presented to show any basis for benefits if the salary to which the benefit is pertinent is removed. Mrs. Jacqueline Kernon during the periods in question performed her duties as Director of Nursing, but also exercised additional supervisory duties in her role as owner. These duties consisted of being on call every weekend, remaining at the nursing home late every evening, visiting the nursing home on weekends, paying extra attention to the personal needs of the patients, spending 70 to 80 hours per week at the nursing home, and generally operating the nursing home efficiently and effectively. The work over and above that normally expected of a Director of Nursing should be compensated at 25 percent of the salary allowed her for Director of Nursing. This finding is based partially on the fact that the patient per-day cost at this nursing home is substantially lower than the costs in other comparable nursing homes in Florida.
Findings Of Fact At all material times, the Respondent held license number 282 which was issued by the Department effective September 1, 1981, and expired August 31, 1982. On or about September 1, 1981, the Respondent purchased the nursing home facility from Ramsey Nursing Facilities, Inc., which was owned and operated by Ethel G. Miller. Roberto Villaescusa became administrator of Eden on or about September 1, 1981. He replaced the previous administrator, Ethel G. Miller. On March 15, 1982, the Department mailed an application for license renewal to the facility by certified mail, return receipt requested. The envelope was addressed to "Ms. Ethel G. Miller, Ashley Manor Care Center, 8785 N.W. 32nd Avenue, Miami, Florida 33147." On March 18, 1982, the license renewal was received by Jesse Brooks, office manager of Eden, who forwarded the letter to D.I.S.C. Corporation, the agent and accountant for Ms. Miller. Mr. Brooks did not open the letter since he believed it was personal mail because it was addressed specifically to Ms. Miller. The letter and other mail were subsequently returned by D.I.S.C. to the Respondent together with instructions that the mail be delivered to Manny Garcia, the son of Ms. Miller, who was then deceased. Shortly after the receipt of the letter from D.I.S.C. and before forwarding it to Garcia, Roberto Villaescusa, Eden's administrator, contacted William Garrett, acting director of licensure for the Department, to inquire regarding license renewal procedures. Garrett advised Villaescusa that the official renewal form had been revised and that such form could only be obtained from Jacksonville. The revised license renewal form was shipped from Jacksonville to Miami where it was obtained by Eden. Within two days of receipt, the new, revised form was completed and mailed back to Jacksonville. It was received in Jacksonville on July 26, 1982, fifty-two days past the renewal date. It is the long standing policy of the Departments office of Licensure in Jacksonville to annually send to nursing facilities licensure notices and application forms in sufficient time for them to be completed and returned ninety days prior to the expiration date stated on their licenses. Nursing home operators and administrators have come to rely upon receiving such notification from Jacksonville.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order assessing a late fee of $5,000 against the Petitioner, for failing to timely renew its license to operate a skilled nursing facility. DONE and RECOMMENDED this 3rd day of June, 1983, in Tallahassee, Florida. SHARYN L. SMITH, Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 1983. COPIES FURNISHED: Martha F. Barrera, Esquire 1320 South Dixie Highway Coral Gables, Florida 33146 Charles J. King, Esquire 3037 East Commercial Boulevard Fort Lauderdale, Florida 33308 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Hillhaven Convalescent Center is a 120-bed skilled nursing care facility, and it participates in Florida's medical assistance program (Medicaid) as a provider of skilled nursing home care. The Department reimburses the Petitioner for the Petitioner's cost in providing such services to eligible patients. As a part of the reimbursement system, Petitioner is required to calculate a per diem reimbursement rate for its Medicaid patients. The Petitioner computed this rate by dividing its total of appropriate expenses ($828,628) by its total patient days (39,399). The resulting per diem rate is $21.03. The total expense and total patient day figures were based upon all categories of patients served by the Petitioner, including Medicare, Medicaid, private and Veterans Administration patients. The Department retained a private accounting firm, Coopers & Lybrand, to audit the Petitioner's 1977 fiscal cost report. The accounting firm concluded that the per diem rate calculated by the Petitioner was erroneous. The firm subtracted total expenses and total patient days attributable to Medicare patients from the figure utilized by the Petitioner. The result of this adjustment was to substantially reduce the Center's per diem rate, and the amount of compensation that the Petitioner is entitled to receive for its participation in the Medicaid Program. Medicare patients generally require a more profound degree of care than do Medicaid patients. Including Medicare patients in a determination of per diem rates at nursing homes will almost universally result in an increase in the rate. The Department has not adopted its policy to exclude Medicare expenses and Medicare days in determining Medicaid per diem rates as a rule in accordance with the Administrative Procedure Act. The Department has uniformly enforced the policy with respect to nursing home facilities participating in the Medicaid Program that it has audited. The parties have stipulated and agreed that the decision in this matter will be applicable to a companion case involving a different nursing home owned by the same corporation. The Petitioner has submitted proposed findings of fact and conclusions of law. To the extent that the proposals have not been substantively adopted herein, they have been rejected either as not supported by the evidence, or as not relevant.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby RECOMMENDED: That a final order be entered affirming the audit exceptions respecting the Petitioner's Medicaid reimbursement for the fiscal year ending March 31, 1977, and requiring that the per diem rate of compensation for Medicaid patients be recomputed by deleting expenses and patient days relating to Medicare patients. DONE and ENTERED this 7th day of December, 1979, in Tallahassee, Florida. G. STEVEN PFEIFFER Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of December, 1979.
The Issue The issue presented is whether Section V. B. 7. of the Florida Title XIX Long-Term Care Reimbursement Plan which is incorporated in Florida Administrative Code Rule 59G-6.010 is an invalid exercise of delegated legislative authority.
Findings Of Fact Petitioner, Manor Pines Convalescent Center, LLC, operates a skilled nursing home located in Ft. Lauderdale, Broward County, Florida, known as Manor Pines Convalescent Center. Manor Pines currently participates in the Medicaid program and has been issued provider number 25417700. Respondent, Agency for Health Care Administration, administers the Florida Title XIX Long-Term Care Reimbursement Plan (hereinafter "the Plan") which is incorporated by reference into Florida Administrative Code Rule 59G-6.010 and which establishes the methodology for determining reimbursement to nursing homes for the care provided to Medicaid beneficiaries. In accordance with the Plan, nursing homes participating in the Medicaid program are reimbursed by Medicaid on a per diem basis. The Medicaid per diem rate consists of four cost components: the operating costs component, the indirect patient care component, the direct patient care component, and a property component. Rates are calculated by following the provisions of the Plan and are cost-based in nature. Medicaid rates are normally set twice per year, once in January and again in July. The Plan contains numerous cost-saving mechanisms that are employed to limit a provider's actual costs. Examples of the cost-saving measures are class ceilings, cost ceilings, and targets. Each of those cost-saving measures uses a "lesser of" mechanism to ensure that a provider's Medicaid rate does not exceed the various mechanisms regardless of the actual costs to the provider. The class ceiling limits the amount that any facility in a particular class of providers can be reimbursed in an affected cost component. The class ceilings are based upon the size of the facility and the facility's geographic location. The cost ceiling caps the amount of costs that Medicaid will reimburse in any given component. The target limits check the amount of growth that Medicaid will reimburse a provider in any one component between rate semesters. Additionally, the Plan also contains a provision that is commonly referred to as the "low occupancy adjustment." According to Section V. B. 7. of the Plan, nursing homes are penalized in their reimbursement rates if they do not meet occupancy thresholds. In the version of the Plan in effect on January 1, 2006 (Version XXIX), the low occupancy adjustment provision reduced the reimbursement rate established for nursing homes for each of the reimbursement components (except the property component under the fair rental value system) that make up the nursing homes' Medicaid reimbursement rate. The Agency amended the low occupancy adjustment on July 1, 2006 (Version XXX). The effect of the amendment was that the adjustment no longer affected the direct patient care component and only affected the operating and indirect patient care components of the Medicaid per diem. The low occupancy adjustment is calculated by determining a low occupancy threshold and then reducing the established Medicaid per diem of any provider that does not meet that threshold. The low occupancy adjustment is a statement of general applicability that applies to all nursing homes in Florida that participate in the Medicaid program. In the January 1, 2006, rate-setting semester, Manor Pines' Medicaid per diem was limited by the low occupancy adjustment. Manor Pines was penalized $11.30 per patient day in the operating component, $25.40 per patient day in the direct patient care component, and $15.90 per patient day in the indirect patient care component. In the July 1, 2006, rate-setting semester, Manor Pines' Medicaid per diem was also limited by the low occupancy adjustment. At that time, Manor Pines was penalized $7.61 per patient day in the operating component and $10.23 per patient day in the indirect patient care component. It is illogical to adjust any component of the Medicaid nursing home per diem due to occupancy because the Medicaid per diem is determined based upon an allocation of costs that already factors Medicaid utilization in the methodology. Simply put, Medicaid's share of costs is limited in the per diem rate by a facility's Medicaid utilization. Further limiting those costs based upon occupancy creates a penalty that has no basis in law or fact. At the time of the final hearing in this cause, Manor Pines had been participating in the Medicaid program for four or five years after 35 years as a private-pay facility. Nearly two-thirds of all residents in nursing homes in Florida and in Broward County are Medicaid recipients. However, the low occupancy adjustment creates a disincentive to accept Medicaid residents because a nursing home affected by the adjustment loses reimbursement on each Medicaid resident in its facility. The low occupancy adjustment is illogical because it creates this disincentive to admit Medicaid residents. The adjustment is illogical because a facility attempting to increase its occupancy to escape the adjustment must admit two Medicaid-eligible individuals for every individual that is not Medicaid-eligible. Yet, each Medicaid-eligible patient causes the facility affected by this adjustment to lose more money. The effect, therefore, of this adjustment is that it actually and illogically hampers the facility's ability to increase its occupancy and ultimately escape the penalty. The Legislature has created five different diversion programs that are designed to divert people eligible for nursing home care from nursing homes to home- and community-based services. One of the major diversion projects has helped to reduce nursing home occupancies in Broward County. It has created a reduction in the overall need for nursing home beds in Broward County despite increasing population and, therefore, has created increased competition for nursing home residents among the nursing home community. The low occupancy adjustment forces nursing homes to recruit and retain residents in their facilities, contrary to the legislative intent enumerated in the various diversion statutes. The low occupancy adjustment illogically imposes a penalty based upon occupancy when the Legislature is actively creating programs designed to reduce nursing home occupancies. Nursing homes are required to provide minimum staffing hours to their residents. During the January 1 and the July 1, 2006, rate semesters, Manor Pines complied with those minimum staffing requirements. The costs, as stated in the direct care component of the January 1, 2006, rate sheets, accurately reflect the costs associated with complying with the minimum staffing requirements. The low occupancy adjustment has created a situation at Manor Pines where in order to meet the minimum staffing requirements, Manor Pines has had to reduce staff in other areas, has had to forego completing certain repairs brought on by recent hurricanes, and has cancelled numerous projects at the facility that were intended to improve and enhance the facility in the eyes of prospective nursing home residents, such as replacing crank beds with electric beds. The addition of new nursing home beds in Florida has been under a moratorium for years and will be for, minimally, four more years unless modified by law. Despite increasing population, there has been no corollary increase in nursing home residents. The statistics demonstrate the success of the legislative programs to divert residents from nursing homes, and they render the Agency's low occupancy adjustment a penalty, unsupported by reason.
Findings Of Fact The facts here involved are not in dispute. Prior to May 1977 Krestview Nursing Home was operated by the Wilson management group (Wilson) and provided nursing home care to Medicaid patient's. The property comprising Krestview Nursing Home is owned by G & J Investments Corp. (G & J), a wholly owned subsidiary of Suburban Nursing Home Consultants (Suburban). Suburban also owns all of the stock of B & K Investments, Inc. Gerald D. Keller at all times here relevant was President of Suburban and G & J Investments. He and his family apparently own most, if not all, of the stock of Suburban. Prior to May 1977, the facility comprising Krestview Nursing Home was leased to Wilson. In early May 1977 Wilson was in dire financial straits, criminal charges were pending against Wilson, and the closure of Krestview and two other homes managed by Wilson was imminent. In hopes of avoiding the problems likely to result from closing these homes, the Department of HRS contacted Mr. Keller to ask if he could locate a qualified operator to take over the operation of the nursing homes. When a qualified operator could not be found on such short notice, Keller was asked by HRS if he would operate these homes until a qualified operator could be located. One primary consideration in this request is the high mortality rate expected when large numbers of elderly patients have to be relocated. Keller, through his corporate organizations, had a corporation, B & K Investments, Inc., which had a current state registration, federal tax number, and could from a corporate standpoint. Qualified personnel to operate this home was available and employed. An agreement between HRS and B & K, admitted into evidence as Exhibit 1, provided that B & K would have no liabilities for the debts or obligations which arose during the time its predecessor provider operated the facility. Wilson's lease was terminated and a new lease was entered into between G & J and B & K whereby B & K agreed to pay rent upon the same terms previously existing with Wilson, Wilson's lease (Exhibit 2) was a net, net lease whereby the lessee paid all taxes and insurance premiums on the real and personal property involved. Krestview was operated by B & K for approximately four months, from May 5, 1977 until August 31, 1977, before Keller was successful in finding a new provider to take over the operation of the nursing home. A lease upon the same terms as Exhibits 2 and 3 was executed with the new provider. B & K's fiscal year ended May 31, 1977, just 26 days after B & K, took over operations. Because of this, HRS allowed B & K to submit its annual report for the 13-month period from May 5, 1977 until May 31, 1978. Upon taking over operation of the nursing home B & K found the taxes unpaid and overdue for 1976. These taxes were paid by B & K, and in November 1977 the taxes for 1977 were paid. At this time B & K was no longer the provider. Both of these payments were included in the costs for the nursing home during the 13-month period ending May 31, 1978 and this constituted one of the issues in dispute. The other disputed issue is the rent paid by B & K to a related corporation, G & J, during the four months that B & K operated Krestview.
Conclusions The Division of Administrative Hearings has jurisdiction over the parties and subject matter of these proceedings. With respect to the taxes for 1976 which B & K paid during the period B & K was operating the premises as provider, it is to be noted that these taxes accrued during the occupancy of the premises by B & K's predecessor provider, Wilson. Under the terms of the agreement (Exhibit 1), B & K, as a provider, had no liability for this obligation. That obligation, like any other debt which accrued during the Wilson administration, was the sole obligation of Wilson. Pursuant to the lease agreement the lessee agrees to pay property taxes while lessee is in possession of the premises. Although the lease agreement does not specify that the taxes be prorated for the first year of the lease (Exhibit 2), there is nothing in the lease to indicate a departure from the normal rule of proration of taxes when the payment of taxes is the obligation of the party in possession. Although B & K paid these taxes for 1976 while in possession of the premises, there was no requirement that it do so. Had B & K not paid the taxes, that burden would have fallen on the owner, G & J. Had no tenant taken over the facility, G & J would have been required to pay the 1976 taxes or have the problem of redeeming the tax certificate after the tax sale. Here B & K, with respect to the 1976 property taxes, is in exactly the same position as would be a provider unrelated to G & J--it has no liability for the payment of these taxes. Had B & K been independent of G & J it is unlikely that these taxes would have appeared on the cost report. The payment of taxes would be appropriate only for the fiscal year 1977, as this obligation for 1976 accrued before B & K became the provider. Although there is a question of when the taxes for 1977 accrued, these taxes became due and payable 1 November 1977. Florida Statutes Section 197.012 (1977). At this time B & K was no longer the provider. However, the lease provided for the tenant to pay taxes and this then became an obligation of the provider. It would be equitable to allow all of the taxes for 1977 be charged to the provider. II. With respect to the payment of rent to a related party, Respondent, in its brief, and at the hearing, agreed there is a prohibition against such rental payments in HIM 15. While the rationale of the rule against such payments is to prevent "sweetheart" agreements which could greatly increase the costs of service, the rule does not disappear simply because that rationale is not present in a particular case. Here it is clear that the lease and rental payments for the premises occupied by the provider was the same for the related provider, B & K, as it was for the unrelated providers which preceded and followed B & K. The rule proscribes the payment of rent to a related corporation and this rule was not abrogated when HRS requested Keller to temporarily take over the role as provider until another provider could be found. While, under the circumstances of this case, the equities are with allowing the provider to charge the rent paid to a related company as a legitimate cost for reimbursement purposes, the rule says this cannot be done. HIM 15 requires the provider, when related to the lessor, to charge off only the actual costs of the facility. These costs are comprised of taxes, depreciation, repairs, insurance, etc. While here the owner (B & J) may not receive the same return on the property it received from those providers not related to it because of low depreciation allowable or for other reason, this too does not provide a basis for ignoring the rule. The validity of the rule has not been questioned, nor has a legal basis been offered for not following this rule. Such a rule is a valid exercise of delegated legislative authority. Fairfax Hospital Association, Inc. v. Califano, 558 F2d 602 (CA 4, 1978). Even when, as here, the equities are with the related owner of the property to allow him to collect and have the rent collected charged by the provider as a reimbursable expense, the rule does not provide for this flexibility and the rule is binding upon HRS. From the foregoing it is concluded that the property taxes for the year 1976 were not a proper expense for B & K Investments, Inc. while it was serving as provider in 1977. It is further concluded that HIM 15 precludes allowing rental payments to a related company as an expense chargeable to the provider despite the equities here existing. It is therefore RECOMMENDED that the desk audit denying the charges for rent in 1976 be upheld. It is further RECOMMENDED that the desk audit denying the payment of rent to a related company be upheld. Entered this 27th day of November, 1979. K. N. AYERS Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Leonard J. Helfand, Esquire DHRS District XI Counsel Room 1040, 401 N. W. 2nd Avenue Miami, Florida 33128 R. Stuart Huff, Esquire 1200 First Federal Building One Southeast 3rd Avenue Miami, Florida 33131
The Issue Whether Petitioner should be reimbursed in the amount of $323.85 pursuant to Chapter 409, Florida Statutes. This case involves a request by Petitioner for payment under the Medicaid Program for a twelve-day period in November, 1979, during which Petitioner reserved the bed of a patient while she was on a claimed therapeutic visit home. The request was denied by Respondent for failure of Petitioner to obtain advance authorization for the home visit. Petitioner thereafter requested a hearing on the denial of its request. Petitioner, The Center for Living, a nursing home in Ft. Lauderdale, Florida, is a Florida corporation. At the commencement of the hearing, Monroe Mitchell, president of the corporation and the licensed nursing home administrator, requested that he be permitted to represent Petitioner in this proceeding. In the absence of rules promulgated by Respondent specifying criteria for qualification of lay counsel, the Hearing Officer, pursuant to Rule 28-5.105, Florida Administrative Code, mad diligent inquiry of Mr. Mitchell to assure that he was capable of preserving the rights of Petitioner. This inquiry included various procedural questions to determine the individual's knowledge of Chapter 120, Florida Statutes, including prehearing and posthearing rights of a party and the conduct of hearings. It was determined that Mr. Mitchell, by education, prior training, and past experience in representing Petitioner in informal and formal administrative proceedings was sufficiently qualified to represent the corporation in this proceeding.
Findings Of Fact The Center for Living is a nursing home located at 2000 Northeast Commercial Boulevard, Ft. Lauderdale, Florida. On November 13, 1979, Florence Rosa, a patient in the home, requested a three day leave of absence in order to visit her husband at her home. She is a 70 year old Medicaid patient who suffers from congestive heart failure and had been a patient at the nursing home since October 1978. She is a younger patient than most of those who reside in the home and had continually sought to return home during her residence in the nursing home. (Testimony of Mitchell) Mrs. Rosa was permitted to go home for the three day period and, while there, she requested that her leave of absence be extended so that she could remain home for a longer period. On November 14, Mrs. Rosa's daughter, Petitioner's Director of Nursing, telephoned Respondent's District X payments worker, Jennifer Kroncke, as to procedural requirements for such an extension. She was informed that an extension might be possible if a statement was obtained from the patient's physician in justification of the request and submitted for approval to the program medical consultant. Pursuant to this conversation, a statement, dated November 15, 1979, was obtained from Dr. Eduardo Hidalgo, the patient's physician, which recommended a ten to twelve day therapeutic pass at home for the patient to enable her and her family to determine if she could remain at home with minimal nursing supervision from a home health care agency. The statement further requested that the patient's bed be held at the nursing come to facilitate her readmission without hospitalization if it became necessary. (Testimony of Kroncke, Mitchell, Exhibit 2) The doctor's statement was received by Petitioner on November 19, 1979, and was transmitted with an appropriate request form to Respondent's Ft. Lauderdale Office where it was received on November 21. Petitioner reserved Mrs. Rosa's bed under the assumption that Respondent would approve the bequest for an extension until November 28, 1979. However, on November 27, the patient returned to the nursing home due to her inability to cope with the home situation. (Testimony of Mitchell, Exhibit 5) Although the request for the extended home visit had been received by Respondent on November 21, it was not until November 28 that its medical services physician consultant was present in his office and became aware of the request. This was due to the fact that the physician, Dr. Mario Rodriguez, maintains office hours only on Wednesdays and Fridays for two hours each day. The request in question was received in Respondent's office on Wednesday, November 21, in insufficient time to be seen by the physician, and due to the intervening Thanksgiving holiday, he did not return to the office until the following Wednesday, November 28. On that date, he approved the leave of absence for the three day period November 13-15 and disapproved the eleven day period November 16-26. His reason for denial was that prior authorization for the extension of the visit had not been obtained from him. Respondent's District Program Supervisor for Medicaid, Nancy Porter, discussed the matter with Dr. Rodriguez on November 28 and they agreed that pertinent regulations required denial for lack of prior authorization, but they did not consider the possible medical benefits and lessened financial costs if the extended visit had been successful. The district program supervisor has the authority to grant such extensions but was not aware of the request until November 28. An extended therapeutic home leave is an unusual situation which occurs less than once a year in District X. Although Petitioner is the largest Medicaid provider in Broward County, its administrator was not familiar with the requirement of prior authorizations for leaves of absence. Be seeks to be reimbursed in the amount of $323.85 for the period for which payment was denied. The bed which Petitioner reserved for Mrs. Rosa could otherwise have been used for occupancy by another patient. (Testimony of Mitchell, Porter, Exhibits 1, 3-5)
Recommendation That payment be made to Petitioner in an appropriate amount for the period November 22-26, 1979, as determined in paragraph 3 of the foregoing Conclusions of Law. DONE and ENTERED this 7th day of May, 1980, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Department of HRS Harold Braynon Attention: Steven W. Huss Department of HRS 323 Winewood Boulevard District X Legal Counsel Tallahassee, Florida 32301 800 West Oakland Park Blvd. Ft. Lauderdale, Florida 33311 Monroe Mitchell, Nursing Home Administrator Center for Living 2000 Commercial Boulevard Ft. Lauderdale, Florida 33308
