Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $1,000.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 1 Filed August 2, 2011 12:43 PM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this 24 day of ely > 2011. Elizabefh/ Dudek, Sécr¢gtary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct oPy of this Final Order was served on the below-named persons by the method designated on this / day of , 2011. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Tria Lawton-Russell Larry Sherberg Office of the General Counsel Lincoln Manor Agency for Health Care Administration 2144 Lincoln Street (Electronic Mail) Hollywood, Florida 33022 L(U.S. Mail) Claude B. Arrington Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
The Issue Whether Petitioner's application for a license to operate Holly Heights Manor as an adult congregate living facility (hereinafter referred to as an "ACLF") should be denied for the reason cited in the Agency for Health Care Administration's August 25, 1994, letter notifying Petitioner of its intention to deny its application?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Facility Holly Heights Manor is an ACLF located in Broward County, Florida. The facility consists of four separate buildings. Each building contains a number of two-bedroom apartments. There are a total of 35 bedrooms in the facility. Each bedroom is large enough to accommodate two residents. The facility also has a main kitchen and a smaller, satellite kitchen. The main kitchen is located in the same building as the facility's administrative office. There is a dining room off the main kitchen, where the residents are served their meals. The satellite kitchen is located in "C" Building on the north side of the premises. The Purchase of the Facility and Pre-June 6, 1994, Repairs and Improvements The current owners (hereinafter referred to as the "Rosenblatts") purchased Holly Heights Manor in November of 1993. At the time of the purchase, the facility was in deplorable condition. Shortly thereafter, the Rosenblatts began an effort, which is still ongoing, to make repairs and improvements to the facility. The Application and the June Survey As the new owners of Holly Heights Manor, the Rosenblatts submitted an application for a license to continue to operate the facility as an ACLF. On June 6 and 7, 1994, the Agency conducted a "change of ownership" survey of Holly Heights Manor (hereinafter referred to as the "initial CHOW survey") to ascertain whether there was compliance with "minimum standards." The Agency employees who conducted the initial CHOW survey were Maryanne Clancy, a public health nutrition consultant, Ann Fantell, a human service survey specialist, and Dominic Grasso, a fire protection specialist. Fantell was the survey team leader. Before leaving the premises, she gave the Rosenblatts a form letter addressed to "Mr. Rosenblatt," which read as follows: The purpose of this letter is to explain the process now that the survey has been completed. During the exit conference, you or your repre- sentative were advised of the deficiencies and requested to write them down. At this time, we also established a time frame for the correction of each deficiency. You will receive, in several weeks, a written report from our Office of this survey. THE TIME TO CORRECT, HOWEVER, STARTS FROM TODAY, THE DAY OF THE SURVEY. An unannounced revisit will be conducted after the dates of correction to determine if the deficiency(ies) have been corrected. It is required that each deficiency be corrected by the date established. If a deficiency is not corrected within the required time frame, the FACILITY MAY BE ASSESSED AN ADMINISTRATIVE FINE. The purpose of this survey is to evaluate the facility compliance with ACLF Rules and Regulations. REPEAT DEFICIENCIES FROM ONE VISIT TO THE NEXT MAY RESULT IN THE ISSUANCE OF ADMINISTRATIVE SANCTIONS SUCH AS FINES, NON-RENEWAL OF THE LICENSE, OR LICENSE REVOCATION, at the time of the current visit, regardless of any time allowed for corrections. Additional time may be granted to correct specific deficiencies if a written request is received prior to the original date of correction. This written request must identify the deficiency(ies) by ACLF number, the reason for the extension request, and specific amount of additional time needed. This office will then approve or disapprove the request, in writing, back to the facility. When the written results of this visit are received, your copy of the report is to be posted in the facility. THE ENCLOSED STATEMENT OF ACKNOWLEDGMENT OF RECEIPT is to be signed and returned to this office within ten days of receipt. If you have any questions, please contact this office at (305) 497-3395. Bruce Rosenthal signed a written acknowledgment, dated June 6, 1994, that he had received and read the letter. The initial CHOW survey revealed over 50 deficiencies. As promised in the letter, the Agency subsequently sent the Rosenblatts a written statement of these deficiencies. Bruce Rosenthal signed a written acknowledgment, dated June 15, 1994, that he had received and posted the statement of deficiencies. At around the same time that the Rosenthals received the Agency's written statement of deficiencies, they received a letter, dated June 10, 1994, from Patricia Feeney, the Agency's Broward County area office supervisor, advising them that their "application for an initial license to operate [Holly Heights Manor] was approved by the ACLF section in Tallahassee" on May 25, 1994. 1/ In response to the written statement of deficiencies that they received, the Rosenthals submitted a plan of correction to the Agency. In addition, they requested an extension of time to correct the fire safety-related deficiencies cited in the statement. Their request was denied. The July Survey On July 12 and 18, 1994, the Agency conducted a follow-up CHOW survey of Holly Heights Manor to determine whether the deficiencies discovered during the initial CHOW survey had been corrected. 2/ Clancy and Grasso, along with Elizabeth Thomas, a human service survey specialist with the Agency, conducted the follow-up CHOW survey. Clancy and Thomas visited the facility on July 12, 1994. Grasso visited the facility on July 18, 1994. The follow-up survey revealed that, while a number of the deficiencies found during the initial CHOW survey had been corrected, a larger number of these deficiencies still remained (hereinafter referred to as the "uncorrected deficiencies"). Deficiencies that the Agency alleged had not been corrected, as well as what the Agency alleged were new deficiencies uncovered during the follow-up CHOW survey, were described in a written statement of deficiencies the Agency provided the Rosenthals. The following were the uncorrected deficiencies that existed at the time of the follow-up CHOW survey: Failing to properly document third party services arranged for by the facility (Tag number A 209); 3/ Failing to document that three patients who had resided at the facility for more than thirty days had been examined by a health care provider (Tag number A 401); 4/ Failing to maintain adequate resident health assessment records (Tag numbers A 403 and A 404); Having a resident not meeting the criteria for admission and continued residency in an ACLF (Tag numbers A 406 and A 408); Failing to notify a resident's physician concerning the resident's inability to obtain prescribed medication (Tag numbers A 602 and A 607); Failing to maintain resident medication administration records that reflect that medications are administered to residents in accordance with their physicians' orders and/or failing to administer medications to residents in accordance with their physicians' orders (Tag number A 604); Failing to properly store medications (Tag number A 606); Failing to encourage residents to participate in activities, and failing to document apparent deviations in the appearance and health of residents (Tag number A 700); Failing to adequately assist residents in their activities of daily living, including grooming and selection of clothing (Tag number A 701); Failing to provide sufficiently diversified activity programs, and failing to consult with residents in the planning and offering of activity programs (Tag number A 703); Using unauthorized mechanical restraints (Tag number A 709); Failing to provide food service in a sanitary manner as evidenced by the flies that were on the food in the main kitchen and dining room and the food service employees that were working without head coverings (Tag number A 800); 5/ Having an insufficient emergency food supply (Tag number A 810); Failing to have an operable dishwasher and washing dishes in a single compartment sink, without sanitizers, in the satellite kitchen (Tag number A 812);. Failing to keep the grounds and interior walls and floors of the facility reasonably clean-looking and attractive (Tag number A 903); Having furniture and furnishings in need of cleaning and repair (Tag number A 904); Improper storing of clothes, linens and other items needing to be washed, and improper storing of wet and dirty mops (Tag numbers A 910 and A 911); Failing to have a written disaster preparedness plan, 6/ and failing to post fire evacuation signs (Tag number K 002); Having walls with "unsealed hole penetrations" (Tag numbers K 009 and K 014); Having sleeping room doors that did not close and latch properly (Tag number K 010); Having "unsealed vertical hole openings throughout the facility" (Tag number K 011); Failing to properly maintain air conditioning and ventilation systems "as evidenced by dirty a/c filters and non-functional vent fans in bathrooms throughout the facility" (Tag number K 015); Failing to have a properly maintained, inspected and certified fire alarm system (Tag number K 016); Failing to document appropriate smoke detector testing (Tag number K 017); Failing to have an adequate cooking hood and extinguishing system (Tag number K 019); Failing to maintain adequate means of egress from the facility (Tag number K 020); and (aa) Failing to provide sufficient emergency lighting (Tag number K 021). The new deficiencies cited by the Agency as a result of the follow-up CHOW survey up were as follows: Failing to employ a consultant pharmacist licensed under Chapter 465, Florida Statutes, after having "uncorrected Class III deficienc[ies] directly related to the administration or supervision of self-administered medication documented by [Agency] personnel pursuant to an inspection of the facility" (Tag number A 610); Failing to provide a physician-ordered therapeutic diet to a resident (Tag number A 802); Failing to serve food at safe and palatable temperatures (Tag number A 811); and Failing to employ a registered or licensed consultant dietician after having "uncorrected Class III deficienc[ies] directly related to dietary standards" (Tag number A 813). Proposed Denial of Application and Imposition of Moratorium The existence of these uncorrected and new deficiencies led the Agency (a) to preliminarily decide to deny the Rosenthals' application for a license to continue to operate the facility as an ACLF, and (b) to impose a moratorium on admissions to the facility "to run concurrently with the denial action." Post-July Survey Remedial Measures The Rosenthals have taken measures designed to correct deficiencies that existed at the time of the follow-up CHOW survey. Written health assessments of residents are now updated monthly. The facility has retained the services of a consultant pharmacist, Alan Siegel, to assist it in complying with "minimum standards" relating to medication administration. At the time Siegel was retained, Leon Rosenthal told him to "do whatever it took to get the facility into compliance in the areas of pharmaceuticals." Siegel moved quickly to accomplish this objective. Only a day after he was retained, on or about July 13, 1994, he conducted an "in-service" training session attended by all of facility's available staff members. He has conducted many other "in-services" for the facility's staff. On or about August 6, 1994, Siegel, in his capacity as the facility's pharmacist consultant, sent the following letter to the Agency: This letter is in response to your recommendations at Holly Heights Manor from July 12, 1994. I was called by the facility owner and asked to act as the facilit[y']s Consultant Pharmacist and started my first review of [the] facility on July 13 that included an inservice on Medication Observation and Psychotropic Side effects. This inservice appeared to go well, since then I have reviewed the facility on July 28 as well as August 5 199[4]. Administration [i]n this facility is doing [its] best to correct the problems. I now have an agree- ment to act as Consultant Pharmacist and will keep in contact with you on an ongoing basis. My initial reviews confirmed your findings and in my set of corrections I indicated what needs [to] and will be done. A602- Resident #10 has had a long history of problems with his family who refuse[s] to be responsible for payment of his prescription medications. He presently owes over four hundred dollars. The facility has agreed to pay for his medications and medications are now available. If you can help me recover the amounts owed to me I will be very appreciative. A604-A610- Consultant Pharmacist was contacted and review confirmed problem. Inservice was done and follow-ups will continue. A606- Proper disposal of discontinued medications is being followed and no medications are being left on the Administrator's desk. A607- refers to A602 Facility was instructed to include in their documentation when medications cannot be sent due to inability to pay or refusal of family. This mainly refers to patients who have no Medicaid or any other aid. Looking forward to seeing you in the future. On or about December 19, 1994, Siegel completed an audit of the facility's medication administration records for each of the facility's residents. The audit revealed no discrepancies or any other indication that the deficiencies existing at the time of the follow-up CHOW survey still existed. With Siegel's help, the facility has a medication administration system that the facility staff is now fully trained to implement in accordance with "minimum standards." The facility now offers, on Tuesdays and Thursdays of each week, music therapy, reality orientation and stress reduction services to residents. These services are provided by a registered nurse employed by the Florida Psychiatric Group. Residents have a neater appearance now than they did at the time of the follow-up CHOW survey. As a general rule, residents are now bathed or showered every day and, as a result, look and smell clean. Male residents are now shaved at least four times a week. Residents' clothes are now changed during the day if they become soiled. Residents are now given laundry bags in which to put their dirty laundry. The bags of dirty laundry are picked up every day by the facility's housekeeping staff. A Medicare-funded home health aide now visits the facility four or five days a week to assist residents in their activities of daily living. Since September or October of 1994, the Rosenthals have had a Florida- licensed pest control business, which also services other ACLFs, perform pest control services at the facility. Maximum (98 percent) pest elimination has been achieved. The facility now has on hand, in the event of an emergency, a one week supply of non-perishable food items, including canned dried milk, beef, ravioli, and beef stew, among other items. The dishwasher in the main kitchen has been repaired and is now operational. The facility has a consultant dietician, Barbara Holland, but she has not provided the Agency with any reports concerning progress made at the facility in the area of food service since the follow-up CHOW survey. The general cleanup of the facility and grounds has continued, spearheaded by Chuck Stevens, the facility's full-time maintenance man, and Cindy Gobin, an administrative assistant at the facility. Bleach and other chemicals have been used extensively in the cleanup effort. Doors and walls, including a "rotted out," "musty" wall behind the commode in one of the bathrooms, have been replaced. Although many pieces of furniture were replaced or repaired following the Rosenthals purchase of the facility, no furniture has been repaired or discarded since the initial CHOW survey. Mops are now properly stored. Holes in walls have been patched and sealed. At a cost of approximately $4,900.00, the facility's fire alarm system has been upgraded. 7/ The upgraded system, which includes signaling devices, has been certified in writing by Gerald Pinnock, the owner of Alpha Security & Fire Alarm Services, Inc., as being properly installed and functioning correctly in accordance with all applicable NFPA requirements. 8/ Work has been done on the air conditioning and ventilation systems. Entire units have been replaced. The cooking hood and extinguishing system in the main kitchen has been repaired and has passed inspection (but not by Agency licensing personnel). Electrical outlets, electrical wiring, light fixtures and bulbs have been replaced. It appears that, all in all, substantial progress has been made in eliminating the deficiencies that existed at the facility at the time of the follow-up CHOW survey. Agency Verification of Corrections Agency personnel have visited the facility subsequent to the follow-up CHOW survey to investigate complaints and to monitor compliance with the Agency- imposed moratorium on admissions. Fantell, for instance, visited the facility on August 12, 1994, on a complaint investigation. During her visit, she noted, among other things, that the facility still had an insufficient emergency food supply (a situation which subsequently was corrected). Following the imposition of the moratorium, until November 30, 1994, Fantell was at the facility on a weekly basis. During a monitoring visit on September 28, 1994, the facility failed to provide residents with the activity programs that had been scheduled for the time period that Fantell was at the facility, and it did not provide residents with any substitute activity programs. During her last visit to the facility, on November 30, 1994, Fantell found a bottle of medication on a desk in an unlocked, open office in the facility. On this last visit, she was not permitted to tour the facility. Although Agency personnel have visited the facility subsequent to the follow-up CHOW survey, they have not done so specifically for the purpose of conducting an inspection or survey to ascertain the extent to which the deficiencies discovered during the follow-up CHOW survey have been corrected. No such survey or inspection has been conducted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency, (1) through its "licensing personnel," immediately conduct another follow-up survey of Holly Heights Manor to ascertain the extent to which deficiencies that existed at the time of the July follow-up CHOW survey have been corrected, and (2) thereafter take action consistent with the results of that survey. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1995. STUART M. LERNER 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 24th day of February, 1995.
The Issue The issue in this cause is whether the Department of Health and Rehabilitative Services (HRS) should approve the application for Certificate of Need of any one or more of the Petitioners for community nursing home beds in Dade County. Petitioner, Manor Care, Inc., (Manor Care) presented the testimony of John D. Lee, Regional Director of Manor Care, who was accepted as an expert in nursing home operations: Alex Boyar, a financial analyst in the Planning Department of Manor, Care, who was accepted as an expert in health planning; and Craig D. Thornton, a health care consultant, who was designated and accepted as an expert in health planning. Manor Care's Exhibits 1 and 2 were marked for identification and received into evidence. Petitioner, Hillhaven Corporation, (Hillhaven) presented the testimony of Richard Ebersol, Regional Vice President for Operations with Hillhaven; Dan Lemon, an architect, who was designated and accepted as an expert in nursing home design and construction costs; Linda McClamma, District Director with Hillhaven for the East Coast of Florida, who was accepted as an expert in nursing home operation and nursing care; Julie Towne, Senior Health Planner with Hillhaven, who was accepted as an expert in health planning; and Kenneth Conners, Jr., a C.P.A., who was accepted as an expert in accounting and health care accounting. Hillhaven's Exhibits 1, 2, 4, 5, 9, 12-20, 22-23 were marked for identification and received into evidence. Appearing for Petitioner, Forum Group, Inc., (Forum) were David C. Warner, Ph.D., a health care consultant, who was accepted as an expert in health care planning, including need analysis, demographic analysis and health care finance; Donald I. Craig, Jr., a health care planner with Forum, who was accepted as an expert in health care planning, nursing home development and statistical analysis; Rita McDonald, Director of Quality Assurance and Staff Development for Forum, who was designated and accepted as an expert in nursing home operations and quality assurance; and Lawrence J. Morton, Director of Financial Services in the Long-Term Care Division of Forum, who was designated and accepted as an expert in health care finance. Forum's Exhibits , and 13 were marked for identification and received into evidence. Respondent, Department of Health and Rehabilitative Services, (HRS) offered the testimony of Elizabeth Dudek, Health Facilities and Services Consultant Supervisor in the Office of Community Medical Facilities at HRS, who was accepted as an expert in CON review. Prior to the hearing, the parties stipulated that each Petitioner had timely filed its letter of intent and application, had been deemed complete, and upon denial had timely filed its petition for formal hearing and thus had standing in this proceeding. The parties also stipulated that each met the minimum requirements for the granting of a CON other than proof of need and long-term financial feasibility as it relates to need, but each Petitioner reserved the right to offer evidence of the superiority of its application. The parties submitted proposed findings of fact and conclusions of law. All proposed findings of facts and conclusions of law have been considered. A ruling has been made on each proposed finding of fact in the Appendix attached hereto and made a part of this Recommended Order.
Findings Of Fact The principal issue in this case is the appropriate interpretation of Rule 10-5.011(1)(k) [formerly cited as 10- 5.011(21)], Florida Administrative Code, to determine the need for new community nursing home beds in Dade County; specifically, the Petitioners and the Department differ as to the appropriate "approved bed" inventory data under the Rule methodology. The Department stipulated that each of the Petitioner' applications, filed in January, 1985, meets all minimum statutory and rule criteria necessary for approval, other than proof of need and long term financial feasibility as it relates to need, but left it to the Petitioners to demonstrate their relative superiority. The Department relied solely upon Rule 10-5.011(1)(k), Florida Administrative Code (hereafter "The Rule"), to determine bed need in this case. The Rule actually provides two different methods of calculating need: Paragraph 2.e. (formerly cited as 10- 5.011(21)(b)5.) of the Rule sets out the so-called "poverty adjustment," which provides that in departmental planning districts where the percentage of persons age 65 and over living in poverty exceeds the statewide poverty rate for persons in that age group and the sum of the "currently licensed and certificate of need approved beds" is less than 27 beds per thousand age 65 and over, the district shall be allocated a total of 27 beds per thousand persons age 65 and over "in the current year." The remaining paragraphs of the Rule set out the other methodology which projects future bed need according to a "three year planning horizon" in cases where the criteria for applying the poverty adjustment are not satisfied. While Paragraph 2.e. of the Rule does not specify the point in time at which "currently licensed and certificate of need approved beds" are to be counted for purposes of making the threshold calculation, it does refer to "LB" which term is clearly defined in Paragraph 2.g. Elfie Stamm, the person responsible for development of all rules pertaining to Certificates of Need (CON), who was designated by the Department to respond to a request for deposition under Rule 1.310(b)(6), Florida Rules of Civil Procedures, testified that the word "currently" in Paragraph 2.e. of the Rule modifies both "licensed" and "Certificate of Need approved beds." Paragraph 2.g. of the Rule specifically provides that review of applications for the January, 1985, batching cycle "shall be based upon" the number of licensed beds as of December 1, 1984, and that this count of "currently licensed beds" governs the threshold calculation of the poverty adjustment. The Department's witness, Elizabeth Dudek, testified that the Department's policy consistently has been to count "currently approved beds" for purposes of the threshold calculation of the poverty adjustment as of the date that she, as supervisor of health facilities services consultants, signs the "State Agency Action Report" regarding the applications under review. In this case, Ms. Dudek signed the State Agency Action Report (SAAR) on June 22, 1985. The Department's practice of counting approved beds as of the date Ms. Dudek signs the SAAR for purposes of the threshold calculation of the poverty adjustment is irrational and inconsistent with both the letter and purpose of Paragraph 2.e. of the Rule. The poverty adjustment portion of the Rule does not provide for calculation of need over a three-year planning horizon, as is provided elsewhere in the Rule, but specifically requires calculations of "current" need based on "current" population and inventory figures. It would be inconsistent with this policy to calculate such "current" need with data measured at different points in time, and the calculation as described by Ms. Dudek could lead to irrational results; for example, beds which were licensed after the December 1, 1984, cutoff for licensed beds and before the June 22, 1985, HRS cutoff for approved beds would be counted neither as licensed nor approved beds, and would "disappear" from the inventory. Moreover, a count of some beds at a point several months later than the point in time at which other aspects of "current need" are measured, (i.e., not in relation to a three- year planning horizon) would give a distorted measure of such current need. Notwithstanding Ms. Dudek's testimony, that the Department has consistently applied its policy regarding the point in time at which "current" data is measured, the Department's position has not been consistent. An example of the Department's inconsistency is the October 27, 1986, memorandum from HRS general counsel, Steven W. Huss, which purports to set out the Department's position regarding the appropriate interpretation of the Rule. That memorandum provides, in part, that "'Current' data is data current as of the date of the application." Ms. Dudek admits that the policy she applied in this case is contrary to the Huss memorandum and the Department's interpretation of Paragraph 2.e. as enunciated by Ms. Stamm. In light of the testimony and evidence presented at the hearing, it is clear that the poverty adjustment should have been applied even according to the Department's application of the Rule. The first prong of the poverty adjustment is met in that the District poverty level of persons age 65 and over exceeds the statewide poverty level for that age group. The "current" district population of persons age 65 and over is 301,552. On December 1, 1984, there were 5,626 licensed beds in the District and 1,990 approved beds in the District.1 If the poverty adjustment is calculated using the December 1, 1984, data, the poverty adjustment would apply as follows: 5626 + 1990 = 0.0253 = 25.3/1000 301,552 The Department's witness testified that she performed the threshold poverty adjustment calculation on June 22, 1985, using the approved bed figure which she believed to be current on that date, 2710, as follows: 5626 + 2710 = 0.0276 = 27.6/1000 301,552 As a result of this calculation, she concluded that the poverty adjustment was inapplicable to the review of the applications here at issue. However, two of the certificates of need which were counted by the Department as "approved" as of June 22, 1985, were in fact not approved and issued until after that date. [Forum Ex. 13 indicates that CON No. 3022, for 120 beds, was granted to Beverly Enterprises (South Dade) on June 24, 1985, and CON No. 3021, which Ms. Dudek counted as 240 beds, was granted to Dade Manor on July 3, 1985.] Ms. Dudek conceded that she had counted these 360 beds as "currently approved" as of the date she signed the SAAR on June 22, 1985, when in fact they were not approved until after that date. On cross-examination, Ms. Dudek conceded that if these 360 beds had not been counted as "approved" as of the date she signed the State Agency Action Report which she had described as the policy in fact followed by the Department then the appropriate calculation of the poverty adjustment would have been: 5626 + (2710-360) = 0.02645 = 26.45/1000 301,552 Had this last calculation been performed, the Department's witness conceded it would have indicated not only that the poverty adjustment should have applied, but that there would have been sufficient bed need to approve all three applications. The Department never introduced evidence to substantiate its use of 2710 as the number of approved beds as of the date of the SAAR.2 The SAAR indicates that there were 2170, not 2710 approved beds on that date, indicating Ms. Dudek's conclusion may have been based on a significant typographical error. Using the 2170 SAAR number as the number of approved beds, the calculation would have been; 5626 + 2170 = .0258 = 25.8/1000 301,552 This includes the 360 beds not approved until after the date the SAAR was signed by Ms. Dudek. If those beds are then deducted, the calculation would be: 5626 + (2170-360) = 0.0246 = 24.6/1000 301,552 Further, the Department included 600 beds awarded out of Petitioners' January, 1988, planning horizon to applicants from an earlier batching cycle without those applicants updating or amending their respective CON applications to address that planning horizon. It is clear that the Department made significant calculation errors in the SAAR, and that the poverty adjustment should have been applied to measure need for these applications. The Petitioners presented extensive evidence regarding the calculations of bed need according to the appropriate application of the poverty adjustment, employing the application of "current" approved beds as of December 1, 1984: LB + AB = 5626 + 1990 = 0.025256 POPE 301,552 PA = 0.027 x 301,552 = 8142 SPA = LBD x PA = 5386 x 8142 = 725 beds LB 5626 Net Need - 7794-5386(0.9 x 1990)725 beds Even if the Department's less rational measure of "current" approved beds as of the date of the SAAR was employed, however, there would be more than enough need under the Rule to approve all three applications: SPA = 7794 Net Need = 77945386(0.9 x 2170)455 beds It is significant to note that the Department's only witness agreed with Petitioner's experts that had the poverty adjustment been calculated as set forth in paragraph 32 above, there would have been sufficient bed need to approve all three applicants. THE FORUM PROPOSAL Forum proposes to build a 120-bed nursing home as an integral part of a retirement living community offering a continuum of services on one campus. Forum currently owns and operates 12 such retirement living centers in the United States as well as 20 free-standing nursing homes. The total retirement living facility proposed by Forum includes retirement apartments, an assisted living facility and a nursing home. In November, 1986, in preparation for final hearing, Forum updated its January, 1985, application for the 120-bed nursing home to reflect more current information. Forum presented evidence at the hearing that if less than a 120-bed need was found, it was ready and able to build a 60-bed facility which was also financially feasible. The total projected cost of the nursing home facility is $4,109,567, including the cost of approximately 3 acres of land. Forum proposes to offer the full range of services which characterize a licensed, Medicare-certified, skilled and intermediate care facility, including ventilator care, IV treatment, and nastrogastric tube feedings. No costs are projected for the additional staff and equipment needed for ventilator patients. Upon opening, Forum is prepared to offer respite care, adult day care, meals on wheels and hospice care if need for such programs is demonstrated in the community. Medicaid certification would be sought for 48 beds with an additional five beds certified for Medicare patients. Forum will annually provide a $10,000 fund for indigent care and for those services not covered by Medicaid, Medicare and other reimbursement programs. The nursing facility would be composed of 40 private room (1 bed) and 40 semi-private rooms (2 beds) in a two-story building. Forum projects an occupancy rate of 63.25% at the end of the first year, and 95% at the end of the second year, and the fill up rates are reasonable and consistent with the experience of other Forum facilities. Daily charges for Forum nursing home patients are reasonable and consistent with Forum's experience and are based on a survey of rates in Dade County and range from $50.64 for Medicaid patients, to $60 for Medicare patients, to $75 for a private pay patient in a private room. Forum, as a national health care provider, will benefit generally from economies of scale in the area of staff training and availability, purchasing, and varieties of nursing programs, and specific economic benefits from this project will result from shared facilities, such as kitchen, dining and common grounds, as well as shared staff in those areas. Forum has a commitment to provide quality care with its continuum of services on one campus and is consistent with the state and local health plans. Forum would seek a superior rating for this facility as is its policy for its facilities and as it has done in other states with similar rating systems. To promote quality of care Forum thoroughly assesses residents' needs and develops a plan of care to satisfy those needs, including a quality assurance program, and will be staffed at a higher than minimum level with skilled professionals. In addition, Forum patients would benefit from an environment which offers and encourages interaction with the healthier residents in other portions of the retirement living center which Forum's study shows results in substantially shorter lengths of stay. Forum is in a very strong financial position and is prepared and able to finance construction with cash reserves, thereby saving debt service charges that would otherwise apply; further, this strong financial position will allow Forum to fund any start-up losses in the first year, thereby ensuring financial feasibility in the short term. Forum stated a strong commitment to this project and is prepared to proceed as soon as it receives approval. THE MANOR CARE PROPOSAL Manor Care proposes to build a 120-bed nursing home. The total cost of Manor's Care's proposal is projected at $4,513,500. Manor Care proposes a 2 story facility with 18 1-bed rooms, 33 2-bed rooms, and 12 3-bed rooms. The number of 3-bed rooms was tripled in the updated application in order to, among other things, reduce the size of the facility for which construction costs would otherwise be higher. Manor Care has 9 existing Florida facilities, 4 of which were acquired by purchase and 5 of which were built by Manor Care over the last 4 1/2 years. All homes built by Manor Care have been within budget, constructed and licensed on time. All three of the homes which were constructed under the supervision of Manor Care's current Regional Director, have received superior licenses, the highest rating available. The proposed nursing home would have the full range of nursing services including skilled and intermediate care, the full range of therapies (physical, occupational, speech, respiratory) and respite care and adult day care. Manor Care provides in-house physical therapists, speech pathologists, and other therapists, which the other applicants provide only by contract, if at all. Manor Care provides respite care whenever beds are available. Manor Care provides a chaplaincy program, by contracting with local chaplains to counsel family, staff and residents. It is the company philosophy of Manor Care to be as involved in the local community as possible. Manor Care provides educational programs for residents, family and staff. Manor Care provides up to $750 per year tuition and expense for staff members wishing to further their education in the field. Manor Care has a centralized, comprehensive, quality assurance program, which consists of a set of standards compiled by taking the strictest standards of all federal and state guidelines in all states in which Manor Care operates. The program is implemented by a quality assurance team which does a comprehensive, unannounced inspection, similar to, but stricter than, a state survey. Manor Care provides higher than average Medicare utilization, which means that the level of care is higher than average. Medicare patients generally require a higher skilled level of care than most nursing home residents. Manor Care has committed 42 of its 120 beds for Medicaid utilization, and all services are offered to all patients regardless of their ability to pay. This percentage of Medicaid beds is below the community average for Medicaid utilization. Manor Care has an emphasis on rehabilitative treatment. Approximately 35-40% of residents in Manor Care facilities return home. Manor Care proposes as part of this application to dedicate a 30-bed wing for the provision of specialized care to Alzheimer's patients. This specialized care is not a "new service" added to its application. Rather, it is a recognition of state of the art care, and a rearrangement of services that would otherwise be provided on a less coordinated basis. There is a need for an Alzbeimer's program in Dade County, and Manor Care has the ability and the experience to provide a high-quality Alzheimer's program. Manor Care projects an occupancy rate of 58% at the end of the first year and predicts reaching and maintaining 90% occupancy midway through the second year. The daily rates projected for this facility are $69.21 for Medicaid, $126.62 for Medicare, and an average for private pay patients of $95.62; Alzheimer's patients would pay $94.00 for a semi-private room and $111.00 for a private room. Manor Care's rates are in the upper half of current rates in Dade County. Manor Care proposes to provide the highest nursing staff to patient ratio of all three applications. Manor Care's pro formas and charges are reasonable and are based upon Manor Care's experience in opening and operating nursing homes in Florida. Manor Care's project is financially feasible. 81. Manor Care proposes to locate in South Dade, where the need is greatest. There are only 22.3 beds per thousand in South Dade and greater than 27 beds per thousand in the rest of Dade County. Furthermore, three of eight homes located in South Dade County are not Medicaid-certified, so there is a need for additional Medicaid beds in South Dade County. THE HILLHAVEN PROPOSAL The Hillhaven corporation is the country's second largest owner and operator of nursing homes, with over 450 facilities throughout the United States, of which 15 operating facilities and three under construction are located in Florida. Hillhaven maintains district offices is Sarasota and Boca Raton, Florida, from which its management, personnel and professional services consultants supervise its Florida operations. Hillhaven proposes to construct a new 120-bed skilled and intermediate nursing facility in the southern part of Dade County as delineated by the District Health Council. The District Plan provides that nursing home beds should be available to the community at a ratio of 27 beds per 1000 population age 65 and over, and should be geographically accessible. The ratio of licensed and approved beds to elderly population in Dade County, measured at any appropriate point in time, is less than 27 per 1000. Therefore, the Hillhaven application is consistent with this criterion. Evidence also was presented that the ratio of beds to population in South Dade County, as defined by the District XI Health Council, is 22.3 per 1000, substantially below that for District XI as a whole. Hillhaven proposes to located its facility in South Dade County, so is consistent with this District Health Plan criterion. Hillhaven proposes to offer skilled nursing services, including round the clock nursing, physical therapy, occupational therapy, oxygen therapy and rehabilitative services in areas of restorative nursing such as bowel and bladder training, activities of daily living restoration, restorative feeding, reality orientation, recreation therapy, personal grooming and resident council. Hillhaven has successfully developed several nursing homes from the Certificate of Need phase through licensure in Florida and has never failed to complete construction of a CON- approved facility, nor has it ever had a CON revoked in Florida. Hillhaven has never exceed the CON approved budget in constructing a new Florida facility. sO. Hillhaven proposes to achieve a payor mix of 60% Medicaid, 30% private pay and 10% Medicare at its South Dade facility. This is 72 beds for Medicaid and 12 beds for Medicare. Hillhaven's corporate representative testified that Hillhaven's projected payor utilization differs from that set out in the original application filed in January, 1985, to take account of demographic changes during the past two years, including increased Medicaid utilization and unmet demand for Medicaid beds. The current Medicaid utilization in District XI exceeds 55%, and three of the existing eight facilities located in South Dade County do not accepted Medicaid patients. Hillhaven presented evidence that based on utilization of its existing facilities in Florida, accessibility problems for Medicaid patients to existing facilities, and the demographics in South Dade County, 60% Medicaid utilization is achievable. Hillhaven's system-wide Medicaid occupancy is between 50 and 53%, and Medicaid utilization at several existing Hillhaven facilities in Florida exceeds 60%. Superior licenses are granted to approximately 20% of all Florida facilities on the basis of extra staffing, on-staff consultants, superior compliance with regulatory and survey criteria and excellence of care. Hillhaven presented evidence that of its fifteen Florida facilities, nine currently have superior license. Hillhaven also was recommended for a tenth superior license shortly before the hearing. It has a conditional license at one Florida facility in Dade County. Hillhaven offered evidence that several of its superior-license facilities maintain Medicaid occupancy over 60%. Hillhaven has a quality assurance program, which employs professional service consultants (nurse consultants) and dietary consultants to monitor quality of care and to set up systems designated to insure quality of care. Hillhaven has a screening and assessment system used to place incoming patients in an appropriate setting and to- determine the appropriate level of care. Hillhaven has been able successfully to recruit and hire staff for its Florida facilities. Hillhaven provides staff in each of its facilities who are fluent in languages other than English. The staffing pattern projected for Hillhaven's proposed facility exceeds the regulatory requirements for the State of Florida and represents the level necessary to obtain a superior license in Florida. Hillhaven facilities also use support groups and social work designees to provide support to residents' families. Hillhaven's Florida facilities have set up resident councils in each facility to assist in making residents aware of their rights and to afford residents the opportunity to discuss their problems and make suggestions for improvements. All Hillhaven facilities in Florida provide physical therapy, occupational therapy and speech therapy. Hillhaven facilities emphasize a restorative nursing program including a bowel and bladder retraining program, a restorative feeding program and a living restoration program which emphasizes personal care and grooming skills. Hillhaven, also emphasizes activity and recreational therapy programs, and its facilities emphasize continuing the residents' link with the community through activities including the "Adopt-a-Resident" program, health fairs, and Heart Association fundraising drives. The Hillhaven Foundation, a not-for-profit educational foundation specializing in educating health professionals and the public about Alzheimer's disease, serves as an educational resource to train Hillhaven staff. Hillhaven projects achieving 95% occupancy in 12 months, and presented evidence that such a fill rate is realistic based on its projected payor mix and Florida experience. The Hillhaven proposal is financially feasible. Hillhaven's proposes to build a new 120 bed facility for a total project cost of $3,432.526. Hillhaven proposes to build a 38,323 square foot one- story H-shaped facility designed for construction and operational efficiency. Hillhaven's projected daily rates range from $58 to $62.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order granting Certificates of Need No. 3900, 3894, and 3893 to Manor Care, Inc., Hillhaven Convalescent Center, and Forum Group, Inc., each for a 120-bed nursing home in Dade County, Florida. DONE AND ENTERED this 8th day of April, 1987, in Tallahassee, Florida. DIANE K. KIESLING, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1987.
The Issue Which of three competing applicants best meets the need for 114 additional community nursing home beds in Lee County, Florida.
Findings Of Fact The Agency For Health Care Administration (AHCA) is the state agency responsible for the administration of the certificate of need (CON) program in Florida. In October 1995, AHCA published a fixed need pool for an additional 114 community nursing home beds needed for the planning horizon beginning July 1998, in District 8, Subdistrict 5, for Lee County. AHCA also reviewed the CON applications received in response to the published need and preliminarily approved that of Manor Care of Boynton Beach, Inc. (Manor Care). Manor Care, Life Care Centers of America, Inc. (Life Care), and Health Care and Retirement Corporation of America (HCR) are the competing applicants for a CON to construct a new 114-bed nursing home in Lee County. The parties filed a Prehearing Stipulation and a Supplement to Prehearing Stipulation which included the following issues: LIFE CARE The letters of intent, the corporate resolutions, and the newspaper publications of each applicant in this proceeding were timely filed and legally adequate as to required content and accuracy, and are not at issue in this proceeding. The CON applications and omissions responses of each CON applicant in this proceeding were timely filed with the Agency for Health Care Administration and the District 8 Local Health Council, and meet the statutory minimum content requirements. The Audited Financial Statements contained in the CON applications at issue in this proceeding are complete and accurate. The criteria which are not applicable or not in dispute are in Subsections 408.035(1)(e), (f), (g), (h), (j), (k), and (2)(c) and (e), Florida Statutes. Life Care, founded in 1976, now operates 190 facilities, assisted living or long term nursing homes, in 28 states. It is the sixth largest and the largest privately-owned operator of long term care beds in the United States. Approximately one- third of the facilities it operates are also owned by Life Care. More than 50 nursing facilities have been built by Life Care, which has never sold a facility. Life Care owns and operates 5 seven nursing homes in Florida, most recently opening a facility in 1996, in Orange Park, near Jacksonville. If issued CON No. 8338, Life Care proposes to construct a 114-bed nursing home in southern Lee County. Life Care’s CON will be conditioned on the provision of 55 percent of total patient days to Medicaid patients. Life Care also proposes conditions to establish a 20-bed unit for patients suffering from Alzheimer's and related dementia (ARD), a minimum of 4 subacute care beds within a 31-bed Medicare certified unit, and an area to accommodate 10 adult day care clients at stabilized occupancy. Life Care plans to provide respite care, hospice services, and care to AIDS/HIV+ residents. Life Care will construct a 50,000 gross square foot building, with 102 semi-private and 12 private rooms for approximately $7.5 million. The plan includes 9 swing beds for additional ARD or hospice residents, if needed. The building will be located in the greater Fort Myers area of southern Lee County. HCR HCR operates nursing homes in over 16 states, 19 in Florida, including Heartland-Fort Myers, in northern Lee County, and Heartland of Boynton Beach, in which all 120 residents suffer from some form of dementia. With the approval of CON No. 8331, HCR plans to construct a 114-bed nursing home with a commitment to provide a minimum of 30 percent of total resident days for Medicaid, 57 beds for ARD residents, and respite care. HCR also plans to offer hospice, skilled nursing, subacute and rehabilitative care, and to serve AIDS/HIV+ residents. HCR proposes to construct a 56,000 gross square foot nursing home on approximately 8 acres for $8.8 million. The design connects two sides of the facility, each with 3 pods of 19 beds, to a central core of administrative offices, kitchen and dining facilities, lounges, and personal care rooms. HCR would build in an area of Lee County, that is “well-removed” from its existing facility, Heartland of Fort Myers, probably south of the Caloosahatchee River. MANOR CARE Manor Care is a subsidiary of Manor Health Care Corporation, a wholly owned subsidiary of Manor Care, Inc., which is publicly traded and is the third largest nursing home company in the United States. In Florida, the parent corporation owns and operates 12 nursing homes and 6 assisted living facilities, having opened its most recent nursing home in West Palm Beach in 1996. Two more Florida facilities are under construction, one of those in Sarasota, which is also in AHCA District 8. The parent also owns and operates nursing homes in Collier and Sarasota Counties, both in District 8. The applicant subsidiary, Manor 7 Care owns and operates two nursing homes in Florida, one in Naples and one in Boynton Beach. If its application for CON No. 8335 is approved, Manor Care proposes to construct a 114-bed nursing home in southern Lee County, conditioned on providing annually a minimum of 49 percent of total resident days to Medicaid, a minimum of 5 percent to hospice patients, a minimum of 3 percent to HIV positive patients, and a minimum of 1100 resident days of respite care. Manor Care’s proposed CON conditions also include the establishment of a 30-bed Alzheimer's unit, a 20-bed Medicare subacute unit, and an adult day care program for a minimum of 2 persons for one-half day each. Manor Care's total project cost is estimated to be approximately $7.5 million for 49,000 gross square feet. Comparisons Of Applications Using Review Criteria Subsection 408.035(1)(a) - The need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan, except in emergency circumstances which pose a threat to the public health. The 1994 Certificate of Need Allocation Factors Report for District 8 is the applicable local health plan which includes the preferences for determining the need for nursing home services. Factor one favors applicants willing to dedicate 55 percent of total resident days to Medicaid residents, based on the District average occupancy rate of 55.85 percent from July through December 1993. Life Care meets the preference by proposing 55 percent Medicaid, in contrast to HCR's proposed 30 percent Medicaid and Manor Care's proposed 49 percent Medicaid. Life Care presented testimony demonstrating that the Medicaid weighted average for Manor Care’s Florida facilities is 33.4 percent in nursing homes located in subdistricts in which the weighted averages are 50 percent or over, including some subdistricts with higher average Medicaid utilizations than Lee County. Manor Care, in each of its facilities, however, has met the Con Medicaid conditions. See, also subsection 408.035(1)(n). HCR noted that the demographics of southern Lee County are different from those of the district as a whole, with a wealthier population in some areas in the south. Life Care’s proposed location is south of Daniels Parkway and southeast of MacGregor Boulevard. The two existing nursing homes in the area, the Pavilion at Shell Point Village and Health Park, which is on the same site as Lee Memorial Hospital, serve zero and 34 percent Medicaid, respectively. Factor two favors applicants proposing to meet community or district need for nursing home care for AID/HIV+ patients. Life Care and HCR made no specific quantitative commitment to serve AIDS/HIV+ residents, although Life Care has experience with AIDS/HIV+ care at its Orange Grove (California) Rehabilitation Hospital. Manor Care’s commitment of 3 percent of 9 total resident days is preferred. The commitment also indicates Manor Care’s willingness to serve AIDS/HIV+ residents in the proposed facility. Life Care asserted that the need for additional AIDS/HIV+ services is not significant in Lee County, due to the effectiveness of the County AIDS Task Force referral system. The task force rotates referrals so that the fifteen nursing homes in the county share the responsibility for care to AIDS/HIV+ patients. At the time the CON applications were filed, ten AIDs patients were in the fifteen County nursing homes. Consequently, while Manor Care’s willingness to serve AIDS/HIV+ residents is preferred, its commitment of 3 percent is an overstatement of need. Allocation Factor three is given to applicants offering a continuum of care including, but not limited to respite and adult day care. Life Care’s proposal to serve respite and 10 adult day care clients is superior to HCR's application, which fails to propose adult day care, and to Manor Care’s measurable, but limited commitment to two half-day clients. However, Manor Care’s commitment to 1100 annual days of respite care is superior to the proposals of Life Care and HCR, both of which would also provide respite care, if and when beds are available. It is the nature of respite care to give short-term relief to a care-giver by temporarily housing a resident. A measurable commitment to a level of respite care provides assurance that a bed will be available for a short term in an otherwise long term care setting. Manor Care included a condition to serve hospice patients, which Life Care and HCR will also do. HCR’s Heartland - Fort Myers contracts with Hope Hospice and, on average, has a census of three hospice patients at any one time. See, also, subsection 408.035(1)(f). Factor four favors applicants constructing at least 60- bed facilities. Preference five favors expansion of existing facilities to 120 beds. All of the applicants meet preference four, and preference five is inapplicable given the fixed numeric need for 114 beds. Allocation factor six gives preference to providers of high technology nursing services for higher acuity patients, such as those needing ventilator services. Manor Care is committed to serve all examples of high technology services listed in the factor, except pediatric patients in a 20-bed Medicare subacute unit, as compared to the 4-bed minimum proposed by Life Care, and limited subacute services and therapies proposed by HCR. In general, allocation factors in the District 8 health plan favor the applications of Manor Care, then Life Care, but not that of HCR. The 1993 State Health Plan preferences are also applicable to determining the need for nursing home services. The first preference favors applicants locating in areas of a subdistrict with existing nursing homes exceeding 90 11 percent occupancy. Life Care, Manor Care, and HCR generally propose locations in southern Lee County and meet the preference. In southern Lee County, occupancy rates exceed 94 percent. Two of the existing 15 nursing homes in the county are located in the southern area, generally identified as south of Daniels Parkway. The second state health plan preference is given to applicants offering Medicaid service in proportion to the subdistrict average. The Lee County subdistrict average is 49 percent. Both Manor Care and Life Care meet the state health plan preference for Medicaid service, but HCR does not. HCR notes that both the district and county Medicaid averages declined to 48.01 and 46.81, respectively, for the first six months of 1996. Manor Care and Life Care include some wealthier areas of Lee County within their proposed locations. HCR raised the probability that a nursing home built in the more affluent areas, is reasonably expected to attract fewer Medicaid and more private pay residents. See, also, subsection 408.035(1)(n). The third state health plan preference is given for service to special care residents, including those with AIDS, ARD, and the mentally ill. The fourth state health plan preference favors a continuum of care. The state health plan preferences are the same as allocation factors two and three of the local health plan, except for the additional consideration of services for persons with ARD and the mentally ill. Although there was varying expert testimony about the ideal size of an ARD unit, the more persuasive testimony, that of HCR’s expert, is that the appropriateness of a unit’s size has to be determined by design and staffing. HCR, by proposing to devote 57 beds to ARD residents, with the related design, programs, and fourteen-hour- a-day activities for seven days a week, best responds to the need for ARD care. Manor Care also has substantial experience in care for ARD residents, from operating over 115 ARD units in its long- term care facilities. On balance, when ARD is considered in conjunction with the needs of other special care residents and the need for a continuum of care, Manor Care best meets the preference by proposing a broader range of special care services. These include more ARD services than Life Care, but less than HCR, measurable respite care, and more adult day care than HCR, but less than Life Care. See, also, Subsection 408.035(1)(o). The fifth state preference applies to construction of facilities providing maximum resident-like comfort and amenities. Life Care’s expert in nursing home design criticized the Manor Care plan as functional, but outdated and stereotyped, particularly in a group bathing area and in not totally meeting ADA standards in every room. The Manor Care prototype has been in use over ten years and is essentially linear, but complies with the ADA and state licensure requirements. Corridor lengths are limited by rule to 120 feet. The longest Manor Care corridor is 80 to 90 feet. Modifications to the prototype include enlarged therapy spaces to accommodate subacute care. Other 13 features include skylights, a mini-lounge, and an exit to the Alzheimer’s courtyard at the end of the longest corridor. Manor Care has a “heritage wing” in which finishes are upgraded and, carpeting, drapes, and a television armoire are provided in private rooms, for residents who can afford to pay for them. Life Care’s plan is better designed than Manor Care’s for the services proposed. For example, Life Care has separate entrance for adult day care clients. Life Care criticized HCR’s pod design for limited visibility from the nurses’ station, and for encouraging residents to cluster in the atrium of each pod. However, HCR plans to use a call light panel system installed at the nurse’s stations which identifies the room number of residents calling for assistance. The system will compensate, in part, for the loss of some visual monitoring. The HCR plan also has activity rooms, day rooms, and quiet rooms, for use as alternatives to residents congregating in the pod atrium. HCR’s pod design is less typical, more creative, and more residential than those of Life Care or Manor Care, although it is more costly. See, also, Subsection 408.035(1)(m). The sixth state preference favors programs using innovative therapeutic programs and restorative care. All of the applicants propose to provide some therapeutic and restorative services, but Manor Care will treat more medically complex residents. Preference seven is given for applicants proposing charges not exceeding the highest Medicaid per diem rate in the subdistrict. The highest subdistrict Medicaid rate, inflated forward at five percent to 1999, is $132.94 Projected rates at the end of the second year are $90.354 for HCR, $105.33 for Manor Care, and $115.80 for Life Care. However, charges for semiprivate rooms will exceed the highest Medicaid rate at HCR, but not Life Care. In the applicants’ existing District 8 nursing home, Life Care has the lowest Medicaid per diem rate, which is $82.41 at Life Care Center of Punta Gorda as compared to $92.82 at HCR’s Heartland-Fort Myers, and $95.61 at Manor Care of Sarasota. The preference fails to adequately distinguish between applicants. The parties stipulated that the three companies involved meet the preference given for a history of operating superior facilities. See, also, Subsection 408.035(1)(c). Life Care meets preference nine by proposing a nursing staff to resident ratio which exceeds the minimum required and those proposed by the other applicants. Life Care nurses per patient day ratio is 1.24, Manor Care’s is 1.11, and HCR’s is .83. The staffing differences reflect, in large part, the differences in proposed programs. The parties stipulated that each applicant’s staffing requirements could be met at the projected salaries. Preference ten, for the use of multi-disciplinary 15 health care professionals, and preference eleven, for ensuring residents’ rights and privacy are met by all of the applicants. Preference twelve favors the nursing home with the lowest administrative cost and highest resident care cost compared to the average in the district. Using the historical inflation rate of 7.3 percent, patient-care costs will be $78.75 in 1999. The historical inflation rate for administrative costs, 6.5 percent, yields 1999 District average administrative cost of $36.39. Life Care proposes lower resident care costs, $73.88, and lower administrative costs $26.16, than the projected district averages, as inflated. Manor Care’s resident care costs ($61) and administrative costs ($33.84) are lower than the average. HCR projected lower resident care costs ($57) and lower administrative costs ($19) than the average. In comparing the two, Life Care is preferred for having higher resident care costs and lower administrative costs than Manor Care. Costs reflect programs, including higher costs to care for subacute than for ARD residents. Costs are also affected by projected average occupancy levels for the second year, which vary from 88 percent for Manor Care, to 93 percent for Life Care, and 80 percent for HCR. In general, Life Care is the preferred applicant based on state health preferences related to Medicaid commitment, staffing ratios, and resident care costs. Life Care is also the second applicant preferred considering the scope of special care services proposed and its physical plant design. HCR is preferable considering design and administrative costs. Manor Care is superior based on special care services, therapeutic services, equal on the state Medicaid preference, and second considering staffing ratios, and resident care costs. The District 8 plan supports the approval of the applications of Life Care and Manor Care, but not HCR. Subsections 408.035(1)(b) - The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district . . .; (1)(d) - The availability and adequacy of . . . alternatives . . .; (2)(b) - That existing inpatient facilities . . . are being used in an appropriate and efficient manner; and (2)(d) - That patients will experience serious problems in obtaining inpatient care . . . in the absence of the proposed new service. There is no evidence of quality of care, efficiency, or access problems in existing nursing homes. The undisputed numeric need for 114 more community nursing home beds in July 1998, is the basis for a determination that accessibility and availability will be problems if the supply is not increased. The applications of Manor Care, Life Care, and HCR are primarily distinguishable by the differences in the proposed services. Each attempted to support its proposal as offering the type and quantity of services which it contends will be needed to supplement existing nursing home services in the District. 17 Financial access is best enhanced by Life Care’s 55 percent Medicaid commitment, followed by Manor Care’s 49 percent Medicaid commitment, and least enhanced by HCR’s 30 percent Medicaid proposal. Accessibility for Medicaid residents is also enhanced by the proposed southern Lee County location, in which the two existing nursing homes in the area provided only 5,000 of the total of 145,000 Medicaid patient days in Lee County in the six months before the applications were filed. In general, relatively high occupancy rates result in more difficulty for Medicaid residents seeking nursing home beds. Manor Care offers the broadest range of services. Life Care notes, however, that Manor Care will be underutilized to the extent that it understates existing inventory, overstates bed need, and conditions its CON on beds designated for services which are not needed. For example, Manor Care’s AIDS/HIV+ commitment of three percent at a time when there are ten AIDS/HIV+ patients in the fifteen nursing homes is overstated. HCR contends that the need for subacute care is also overstated, particularly by Manor Care. Subsequent to the needs analysis for subacute beds, included in the Manor Care application, a subacute care unit was approved at a new Beverly facility in the district. Within the area in which Life Care and Manor Care propose to locate, Doctor’s Hospital, sometimes called Gulf Coast Hospital, has received a CON to operate a 10-bed skilled nursing unit. In addition, East Point Hospital and Southwest Regional Hospital, both in Lee County, have hospital- based skilled nursing units. There is no established definition of subacute services and no separately licensed category of beds from which existing inventory can be determined. In a survey of fourteen of the existing nineteen nursing homes in the County, HCR’s expert determined that one-half provide tube feeding, gastrointestinal feeding, and wound care, which are generally understood to be subacute services. Most, but not all, subacute services are provided in Medicare-certified beds. Using Medicare days reported as a proxy for subacute days, which are not reported, Manor Care confirmed statistically a growing use of nursing home beds in Lee County to provide Medicare services. From 1992 to 1996, the proportion of Medicare nursing home days increased from 10 to 16 percent. From 1994 to 1995, the number of Medicare beds increased from 350 to 500, which reflects rising demand, since nursing homes can designate Medicare beds without prior regulatory approval. Another measure of the need for subacute care is the percentage of persons with major or extreme categories of illnesses in certain diagnostic related groups (DRGs) which typically require additional nursing care after hospitalization. However, that approach cannot be solely relied upon, because the post-hospital care can be provided in settings other than the nursing homes. Life Care’s expert expects twenty-five percent of its Medicare and private pay admissions to require subacute care. 19 By contrast, statewide, fifty-six percent of admissions are major or extreme DRGs, as compared to sixty-six percent in Lee County. In 1993, the average daily census for Medicare residents in Lee County nursing homes was 13.6 residents. The average daily Medicare census projected by Manor Care, 13.5, is reasonable. Therefore, the demand in Lee County, as reflected by Medicare utilization and the higher than statewide subacute DRGs, indicates that Manor Care’s 20-bed subacute unit does not overstate need. Life Care’s 4-bed minimum understates the need for subacute care, but is not a serious detriment to its proposal given its ability to expand the unit. The parties disagree over the magnitude of the need for ARD residents’ care in separate or secured units. As demonstrated by Life Care and Manor Care, fewer than half of nursing home residents need to be in a special ARD unit. The severity of ARD is measured, ranging from 1 to 7 on the Reisburg Scale. Life Care and Manor Care would have 20 and 30 bed units, respectively. Life Care’s ARD unit is designed to serve early and middle stages (stages 1-4) of the disease, when residents are ambulatory. An outdoor wandering space with a seven-foot high fence, color and picture cues to rooms and activity areas are incorporated in the plans. Life Care also expects some clients with ARD to use its adult day care. HCR proposes to designate half of its nursing home for ARD residents and the other half for general long-term care, based on its determination of the need for ARD services. Nationally, half of all nursing home patients suffer from some degree of dementia. HCR has substantial experience with ARD, and operates Heartland of Boynton Beach, a 120-bed all dementia facility. HCR’s pod design is especially suited to allowing ARD residents to wander inside the facility and in adjacent courtyards with locked gates. HCR uses a wander-guard alarm system rather than locked doors and non-confrontational sight and sound cues to direct residents’ movements and behavior. In northern Lee County, Heartland-Fort Myers has a 20-bed ARD unit. Residents with early and late (non-ambulatory) stages of ARD are appropriate for placement in long-term beds outside an ARD unit. ARD residents, who have a loss of cognition, but who are still ambulatory in stages 5-7, are appropriate for placement in separate units, as proposed by HCR and Manor Care. Manor Care’s analysis of overall need for a separate ARD unit, fewer than half of the total beds, and its analysis of the ARD stages appropriate for placement in a separate unit (stages 5-7) was best documented and most persuasive. Considering financial and geographic access, and programmatic needs for subacute patients and ARD residents, Manor Care’s proposal best supplements existing nursing home services in Lee County. Manor Care’s AIDS/HIV+ commitment, however, may result in up to three underutilized beds. 21 The immediate and long-term financial feasibility of the proposal. The parties stipulated to the immediate or short term financial feasibility of the proposals. Manor Care’s proposal is financially feasible in the long term, based on a reasonable projection of net income of $473,300 at the end of the second year of operation. Similarly HCR’s proposal is financially feasible and reasonable, with projected net income in year two of $441,873. Life Care’s proposal overestimates utilization by projecting 93 percent occupancy at the end of the first and second years. The subdistrict average is 91 percent, although the other two nursing homes in southern Lee County exceed the subdistrict average with 94 percent occupancy. Life Care agrees that its fill-up rate is aggressive. The rate is unreasonable, when comparing mature nursing homes to the experience of other new providers in Lee County. The projection of an average daily census of 17 Medicare and HMO/Insurance patients, with a 31-bed designated subacute case unit is also inconsistent with achieving 93 percent overall occupancy. While the exact correlation between Medicare and HMO/Insurance patients to subacute care beds cannot be established, those payor categories are the best indicators of subacute care utilization. Considering projected utilization levels by payor, occupancy at Life Care cannot mathematically reach 93 percent, even if the remaining 83 beds are full. In forecasting revenues, Life Care used 5 percent, the maximum possible inflation for Medicaid rates. The ceiling set by the State for south Florida nursing homes over 100 beds has increased an average 4.8 percent. Manor Care’s use of 3.8 percent inflation, representing only the patient care not the property component of Medicaid is not justified. Nevertheless, Life Care’s use of 5 percent for financial forecasting is not fiscally conservative and results in an overstatement of Medicaid revenue. As a result of the overstatement of utilization and the reliance on overstated Medicaid revenues for 55 percent of total occupancy at stabilized occupancy, Life Care failed to demonstrate that its proposal is financially feasible in the long term. (l) The probable impact . . . on the costs of providing health services . . . , which foster competition . . ., promote quality assurance and cost-effectiveness. HCR currently operates a nursing home in Lee County, and its proposed capital cost for a new facility is higher than those for Manor Care or Life Care. Manor Care and Life Care have facilities in District 8, but not in Lee County. Unlike Life Care, Manor Care and HCR will not have any debt as a result of their proposed construction. Without debt, property costs and Medicare reimbursements per patient day for the property component will be lower. Capital costs are also built into the 23 Medicaid per diem rate. Therefore, Medicare and Medicaid reimbursements, all other things being equal, will be higher for Life Care. Manor Care will foster competition with greater cost effectiveness.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency For Health Care Administration issue Certificate of Need No. 8335 to Manor Care of Boynton Beach to construct a 114-bed community nursing home conditioned on the provision of services to (1) a minimum of 49 percent of total annual resident days to Medicaid residents, (2) a minimum of 5 percent of total annual resident days to hospice patients, (3) a minimum of 2 adult day care clients, (4) a minimum of 1100 total annual resident days to respite, (5) participation in the Lee County AIDS Task Force referral process, (6) the establishment of a 30-bed Alzheimer’s unit and (7) the establishment of a 20-bed subacute care unit. DONE AND ENTERED this 5th day of March, 1997, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1997. COPIES FURNISHED: Richard Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 James C. Hauser, Esquire Skelding, Labasky, Corry Eastman, Hauser and Jolly, P.A. Post Office Box 669 Tallahassee, Florida 32302 Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32302 R. Bruce McKibben, Jr., Esquire Holland and Knight Post Office Box 810 Tallahassee, Florida 32302-0810 R. S. Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Jerome W. Hoffman, General Counsel Agency For Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $150.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 Filed June 7, 2012 10:56 AM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this a day of Jere , 2012. Agency fay Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct_gapy of this Final Order was served on the below-named persons by the method designated on this_7 ay of —-e_ , 2012. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Mary Daley Jacobs Karl D. Acuff Office of the General Counsel Attorney for the Respondent Agency for Health Care Administration Karl D. Acuff, P.A. (Electronic Mail) 1615 Village Square Boulevard, Suite 2 Tallahassee, Florida 32309 (U.S. Mail) John D.C. Newton II Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
The Issue Whether Respondent, Manor Care of Sarasota, Inc., d/b/a Manor Care Nursing Center, committed a Class II deficiency at the time of a survey conducted on August 10 through 12, 2004, so as to justify the issuance of a "conditional" license and the imposition of an administrative fine of $2,500.
Findings Of Fact Based upon the evidence presented at the final hearing, the following relevant findings of fact are made: At all times material hereto, AHCA is the state agency charged with licensing of nursing homes in Florida under Subsection 400.021(2), Florida Statutes (2004), and the assignment of a licensure status pursuant to Subsection 400.23(7), Florida Statutes (2004). AHCA is charged with evaluating nursing home facilities to determine their degree of compliance with established rules as a basis for making the required licensure assignment. AHCA is also responsible for conducting federally-mandated surveys of long-term care facilities receiving Medicare and Medicaid funds for compliance with federal statutory and rule requirements pursuant to Florida Administrative Code Rule 59A-4.1288. Pursuant to Subsection 400.23(8), Florida Statutes (2004), AHCA must classify deficiencies according to the nature and scope of the deficiency when the criteria established under Subsection 400.23(2), Florida Statutes (2004), are not met. The classification of any deficiencies discovered determines whether the licensure status of a nursing home is "standard" or "conditional" and the amount of the administrative fine that may be imposed, if any. Surveyors note their findings on a standard prescribed Center for Medicare and Medicaid Services (CMS) Form 2567 entitled, "Statement of Deficiencies and Plan of Correction," which is commonly referred to as a "Form 2567." During the survey of a facility, if violations of regulations are found, the violations are noted and referred to as "Tags." A tag identifies the applicable regulatory standard that the surveyors believe has been violated, provides a summary of the violation, and sets forth specific factual allegations that the surveyors believe support the violation. Manor Care is a 178-bed nursing home located at 5511 Swift Road, Sarasota, Florida. Manor Care is licensed as a skilled nursing facility. On August 10 through 12, 2004, AHCA's staff conducted a survey at Manor Care. The Form 2567 completed during this survey found the facility in violation of Tag F425. This alleged violation formed the basis of AHCA's Administrative Complaint. Tag F425 relates to pharmacy services. The federal regulation with which Manor Care allegedly failed to comply is 42 C.F.R. Section 483.60, which provides in relevant part: The facility must provide routine and emergency drugs and biologicals to its residents, or obtain them under an agreement described in Sec. 483.75(h) of this part. 42 C.F.R. Section 483.75 provides generally that a facility "must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, psychosocial well-being of each resident." 42 C.F.R. Section 483.75(h) provides: (h) Use of outside resources. If the facility does not employ a qualified professional person to furnish a specific service to be provided by the facility, the facility must have that service furnished to residents by a person or agency outside the facility under an arrangement described in section 1861(w) of the Act[1/] or (with respect to services furnished to NF residents and dental services furnished to SNF residents) an agreement described in paragraph (h)(2) of this section. Arrangements as described in section 1861(w) of the Act or agreements pertaining to services furnished by outside resources must specify in writing that the facility assumes responsibility for-- Obtaining services that meet professional standards and principles that apply to professionals providing services in such a facility; and The timeliness of the services. Resident 10, a female who was 51 years old at the time of the survey, was initially admitted to Manor Care on December 19, 2003, with diagnoses that included diabetes mellitus, arteriosclerotic heart disease, peripheral vascular disease, depression, chronic obstructive pulmonary disease, and cerebral vascular accident with hemiparesis and intercerebral hemorrhage. Resident 10 was admitted to Sarasota Memorial Hospital for a surgical procedure on her leg, then re-admitted to Manor Care on August 2, 2004. The hospital's medical impression history and background included status post bilateral iliac angioplasty and stent, hypertension, a history of nicotine addiction, cigarette abuse, status post previous coronary stent, severe osteoarthritis, a history of lumbosacral disk disease with chronic pain syndrome, status post left thoracotomy, lower lobectomy for adenocarcinoma, a history of seizure disorder, and a history of moderate carotid stenosis on the right and left. Upon her re-admission to Manor Care on August 2, 2004, Resident 10 had an intravenous morphine pump at 25 mg per day for severe pain and a clonopin pump at 250 mg per day for back pain. She was also prescribed oxycodone (Percocet) "prn," or as needed, for breakthrough pain. Finally, she was prescribed fentanyl citrate (Actiq), a narcotic analgesic, in the form of a lozenge often referred to as a "lollipop," every three hours, as needed, for breakthrough pain. As a potent opiate, fentanyl is a Schedule II controlled substance that is subject to misuse, abuse, and addiction. The nurses' notes for August 2, 2004, indicated that Resident 10 was offered Percocet for her pain, but that she declined it. On August 3, 2004, the attending physician changed Resident 10's fentanyl prescription from "3 hr. prn" to "q. 2h," meaning from every three hours, as needed, to every two hours regardless of her expressed need. Manor Care's pharmaceuticals were provided by an outside pharmacy pursuant to a contract comporting with 42 C.F.R. Section 483.75(h). On August 7, 2004, Manor Care's staff faxed a refill order to the contract pharmacy requesting a refill of Resident 10's fentanyl. During the day shift on August 9, 2004, Diane Hinrichs, the LPN performing the narcotics count, noticed that the fentanyl count was low and that the pharmacy had not filled the August 7 refill order. She faxed a repeat refill order and phoned the pharmacy, which assured her that the fentanyl would be included in the pharmacy's 4:00 p.m. delivery to Manor Care. When the fentanyl was not delivered at 4:00 p.m., another Manor Care nurse phoned the pharmacy again. The pharmacy assured the nurse that the fentanyl would be included in the next scheduled delivery, at about 2:00 a.m. on August 10, 2004. Shortly before 2:00 a.m., Ms. Hinrichs was back on duty and phoned the pharmacy, asking whether she could obtain the fentanyl at Walgreens or some other alternate source. The pharmacist told her that she could not, but assured her that the fentanyl was "on its way." The fetanyl was not included in the 2:00 a.m. delivery. The duty nurse called the pharmacy immediately, then again at approximately 5:20 a.m., and was again told that the fentanyl was "on its way." The last dose of fentanyl in the facility was administered to Resident 10 at midnight on August 9, 2004. Resident 10 did not receive fentanyl, as ordered, at 2:00 a.m., 4:00 a.m., and 6:00 a.m. on August 10, 2004. She continued to receive the morphine and clonopin on the intravenous pump throughout the night. During the night, Resident 10 was offered Percocet as a substitute for the unavailable fentanyl. She declined the Percocet, stating that "it does not help at all." Manor Care's medication administration records indicated that Resident 10 had never taken Percocet. As noted above, Resident 10's physician had prescribed Percocet for breakthrough pain. The pharmacy delivered the fentanyl at approximately 7:40 a.m. on August 10, 2004, and the nursing staff administered the medication to Resident 10 at about 8:30 a.m. The pharmacy later investigated the situation and informed Manor Care that a pharmacy technician had miscalculated the amount of fentanyl that Manor Care was allowed to keep on hand and had placed the refill order in a "holding bin" for later delivery. The Manor Care nursing notes indicate that Resident 10's physician was notified of the unavailability of the fetanyl at some time on August 10, 2004. On August 11, 2004, the physician discontinued his order for Percocet and instead prescribed oral morphine (Roxanol) for Resident 10's breakthrough pain. The physician continued the prescription for fetanyl. One of Resident 10's diagnoses was a "history of nicotine addiction, cigarette abuse." Her night and early morning routine was sleep punctuated by frequent trips in her wheelchair to an outdoor gazebo designated by Manor Care as a smoking area. During the early morning hours of August 10, 2004, Resident 10 followed this routine. During the early morning hours of August 10, 2004, Resident 10 was observed by an experienced RN, Angela Miguel, and an experienced LPN, Diane Hinrichs, both of whom were familiar with Resident 10's condition, personality, and habits. Resident 10 did not complain to either nurse regarding pain caused by the missed doses of fentanyl. Neither nurse observed Resident 10 to exhibit any behavior indicative of pain. Resident 10 appeared to be going about her usual routine of sleeping, then going outside to smoke. Under the circumstances, neither nurse saw any reason or need to conduct a formal pain evaluation of Resident 10. Jane Sargent-Jefferson, the food service director, arrived at Manor Care at her usual time of 5:00 a.m. on August 10, 2004. She found Resident 10 asleep in her wheelchair outside in the smoking gazebo, which is adjacent to the Manor Care dining room. Ms. Sargent-Jefferson often found Resident 10 asleep in the gazebo during the early morning hours and would wake up Resident 10 and talk to her. She did so on the morning of August 10, 2004. Ms. Sargent-Jefferson testified that "the first thing out of [Resident 10's] mouth" was that "she was mad because her meds had been missed." Ms. Sargent-Jefferson stated that it was not unusual for Resident 10 to be angry and to complain when she was unhappy. Just the day before, Resident 10 had "stormed out" of the dining room when the chef's salad was not to her liking. Ms. Sargent-Jefferson had frequent conversations with Resident 10. On the morning of August 10, 2004, she spoke with Resident 10 on three separate occasions between 5:00 a.m. and noon. Resident 10 did not say that she had been in pain during the previous night. Ms. Sargent-Jefferson testified that Resident 10 "would tell you" if she was in pain. Ms. Sargent- Jefferson observed nothing out of the ordinary in Resident 10's appearance or behavior on the morning of August 10, 2004. On the morning of August 10, 2004, AHCA surveyor Barbara Pescatore was in the smoking gazebo when she was approached by a resident subsequently identified as Resident 10, who complained that she had not received prescribed pain medication from midnight until 8:30 a.m. Ms. Pescatore transferred the inquiry to Anne Dolan, the RN who had been assigned to survey the care of Resident 10. Ms. Dolan reviewed the facility's records and interviewed the staff. She learned that Resident 10's fentanyl doses were missed at 2:00 a.m., 4:00 a.m., and 6:00 a.m. on August 10, 2004, and that the 8:00 a.m. dose on that date was administered at about 8:30. She further learned the circumstances surrounding the lack of fentanyl in the facility in the early morning hours of August 10, 2004. At the hearing, Ms. Dolan, an expert in long-term care nursing, opined that Manor Care and its nurses had an absolute responsibility to ensure that Resident 10 had her medication and had it on time. She testified that at 10:00 p.m. on August 9, 2004, the nursing staff knew that there was only one dose of fentanyl remaining to administer and that it was the staff's responsibility to do whatever was needed to ensure there would be more medication to give Resident 10 after the last dose at midnight. Ms. Dolan testified that missed doses of a routine pain medication can cause unnecessary pain and a delay in the medication's effect when the doses are resumed. Ms. Dolan testified that she could see Resident 10 grimacing and wincing when she would feel pain in her leg. She testified that Resident 10's pain was relieved immediately when she received the fetanyl "lollipop."2/ However, Ms. Dolan was not present on the night in question, and the record gives no indication whether Ms. Dolan or any other AHCA surveyor simply asked Resident 10 whether she experienced increased pain when she missed the doses of fentanyl. No direct evidence was presented that Resident 10 expressed pain or complained of pain or discomfort due to the missed doses of fentanyl, either at the time or later. Dr. Franklin May, a senior pharmacist for AHCA, offered expert testimony and testified that the nursing staff's actions during the night of August 9, 2004, evidenced a "very severe" failure to deliver pharmaceutical services. He based this opinion on the fact that the regulations require that medication be provided in a timely manner. Dr. May was not involved in the survey process and did not interview Resident 10. Based on the records he reviewed, Dr. May testified that he could not say whether Resident 10 "needed" the fentanyl for pain between midnight and 8:00 a.m. Dr. May opined that when the dose of fentanyl was missed due to its unavailability and Resident 10 refused to take the alternative drug Percocet, the staff nurses should have performed an immediate pain evaluation and contacted the resident's physician for instructions. If the attending physician had been unavailable, then the nurses should have contacted Manor Care's director of medicine for instruction. Dr. May emphasized that the staff nurses did not have the discretion to allow the resident to simply miss doses of prescribed medicine. The contracting pharmacy's policy and procedure manual set forth the following policy: "When medication orders are not received or unavailable, the licensed nurse will immediately initiate action in cooperation with the attending physician and the pharmacy provider. All medication orders unavailable to the customer will be managed with urgency." The manual sets forth the following process to implement the policy, in relevant part (emphasis in original): If a medication shortage is discovered during normal pharmacy hours: A licensed nurse calls the pharmacy and speaks to a registered pharmacist to determine the status of the order. If not ordered, place the order or re-order to be sent with the next scheduled delivery. If the next available delivery causes delay or missed dose in the customer's medication schedule, take the medication from the emergency stock supply to administer the dose. If medication is not available in the emergency stock supply, notify the pharmacist and arrange for an emergency delivery. If a medication shortage is discovered after normal pharmacy hours: A licensed nurse obtains the ordered medication from the emergency stock supply. If the ordered medication is not available in the emergency stock supply, a licensed nurse calls the pharmacy's emergency answering service and request to speak with the registered pharmacist on duty to manage the plan of action. Action may include: Emergency delivery. Use of emergency (back-up) pharmacy. If an emergency delivery is unavailable, a licensed nurse contacts the attending physician to obtain orders or directions which may include: Holding the dose/doses. Use of an alternative medication available from the emergency stock supply. Change in order (time of administration or medication). * * * When a missed dose is unavoidable: Document missed dose on the Medication Administration Record (MAR) or Treatment Administration Record (TAR): Initial and circle to indicate any missed dose. Document explanation for missed dose according to physicians order: e.g. "hold dose" on back of MAR/TAR and indicate "See nurses notes for explanation." Document explanation of missed dose in the Nurses Notes: Describe circumstance of medication shortage. Notification of pharmacy and response. Action(s) taken. Manor Care staff did not completely fulfill the requirements of the quoted procedures. The MAR for Resident 10 complied with the documentation requirement that missed doses be initialed and circled, but made no reference to explanatory nurses' notes. The records indicate that the nurses' notes regarding the missed doses were not made contemporaneously, but were completed later in the morning of August 10, 2004. As noted above, the nursing staff made several attempts to have the pharmacy deliver the fentanyl, but never proceeded to the next step of using a back-up pharmacy or contacting the attending physician because of the attending nurses' observations that Resident 10 was not in pain or discomfort. The federal CMS issues a "State Operations Manual" containing guidelines that are relied upon by surveyors when assessing compliance with regulatory requirements. The State Operations Manual provides, as follows regarding alleged violations of 42 C.F.R. Section 483.60: A drug, whether prescribed on a routine, emergency, or as needed basis, must be provided in a timely manner. If failure to provide a prescribed drug in a timely manner causes the resident discomfort or endangers his or her health and safety, then this requirement is not met. There was no allegation made nor evidence presented that Resident 10's health or safety was endangered by the missed doses of fentanyl. Thus, the issue, as framed by the Guidance to Surveyors documents, is whether Resident 10 experienced "discomfort." The evidence presented at hearing did not establish that Resident 10 experienced pain or more than minimal additional discomfort due to the missed medication. At most, the evidence proved that Resident 10 was upset by the fact that she missed doses of fentanyl. She did not tell anyone that she was in pain and displayed few, if any, outward behavioral indications of pain. Resident 10 went about her normal routine, including sleeping for a time and going outside to smoke cigarettes on the gazebo. Subsequently, in September 2004, Resident 10 was discharged from Manor Care and returned to her own residence. The alleged violation of C.F.R. Section 483.60 was classified by the surveyors as an isolated "Class II" deficiency. Subsection 400.23(8)(b), Florida Statutes (2004), provides, in relevant part: A class II deficiency is a deficiency that the agency determines has compromised the resident's ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency . . . A fine shall be levied notwithstanding the correction of the deficiency. Subsection 400.23(7)(b), Florida Statutes (2004), provides that the presence of one or more Class II deficiencies requires AHCA to assign a conditional licensure status to the facility. Conditional licensure means that a facility "is not in substantial compliance at the time of the survey with criteria established under this part or with rules adopted by the agency." Subsection 400.23(8)(c), Florida Statutes (2004), defines a "Class III" deficiency as follows, in relevant part: A class III deficiency is a deficiency that the agency determines will result in no more than minimal physical, mental, or psychosocial discomfort to the resident or has the potential to compromise the resident's ability to maintain or reach his or her highest practical physical, mental, or psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class III deficiency is subject to a civil penalty of $1,000 for an isolated deficiency . . . A citation for a class III deficiency must specify the time within which the deficiency is required to be corrected. If a class III deficiency is corrected within the time specified, no civil penalty shall be imposed. Under all the facts and circumstances set forth above, it is found that Manor Care did not provide Resident 10 with her prescribed fentanyl during the late night hours of August 10, 2004. It is further found that though Manor Care's nursing staff made repeated efforts to obtain the fentanyl through its contracted pharmacy and received repeated assurances that the medication was "on its way," Manor Care's nursing staff did not follow all of the procedures set forth in the pharmacy's policy and procedure manual to secure the medication on an urgent basis. However, the evidence did not establish that Resident 10's "ability to maintain or reach . . . her highest practicable physical, mental, and psychosocial well-being" was compromised by the missed doses of fentanyl. At most, Resident 10 suffered "minimal physical, mental, or psychosocial discomfort," and the alleged violation should have been classified as an isolated Class III deficiency.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that AHCA enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 26th day of August, 2005.
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $12,000.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 1 Filed June 19, 2012 8:35 AM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this wi day of Sterne , 2012. Elizabeth Dudek)Secretary Agency for Healtfi Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this / yoniny of Joe , 2012. Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Andrea M. Lang, Senior Attorney JoAnne K. Little, General Counsel Office of the General Counsel SunCrest Healthcare Agency for Health Care Administration 510 Hospital Drive, Suite 100 (Electronic Mail) Madison, Tennessee 37115 (U.S. Mail) Elizabeth W. McArthur Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part If, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 60 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 1 Filed November 4, 2013 11:16 AM Division of Administrative Hearings { N prev bar ORDERED at Tallahassee, Florida, on this day of » 2013. pak, Elizabét Dudek, Sétretary Agency for Health. Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct SPRY of this Final ah was serve the below-named persons by the method designated on this Pe day of , 2013. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Teresita A. Vivo Roxana Salano Office of the General Counsel Villa Serena Group Agency for Health Care Administration 1800 Southwest 1* Street, Suite 202 (Electronic Mail) Miami, Florida 33135 (U.S. Mail) Edward T. Bauer Administrative Law Judge Division of Administrative Hearing | (Electronic Mail)
