Findings Of Fact The Parties FRTC is a wholly-owned subsidiary of Charter Medical Corporation (Charter) which proposes to construct and operate a freestanding, 60 bed, 24- hour-a-day, Intensive Residential Treatment Program for children between the ages of 6 and 18 in Palm Beach County within HRS District IX, pursuant to Rule 10-28.152(8), F.A.C. and Chapter 395, F.S. Although FRTC represents it will construct its proposed facility with or without CON licensure, which it is entitled to do, given the peculiarities of this type of health care entity, it is clear that a prime motivator in FRTC's CON application is that with CON licensure, FRTC potentially will have greater access to insurance reimbursement because it may then call itself a "hospital." FRTC will seek JCAH accreditation. HRS is the state agency with the authority and responsibility to consider CON applications, pursuant to Chapter 10-5.011, F.A.C. and Sections 381.701-381.715, F.S. (1987). HRS preliminarily approved FRTC's application, and supported it through formal hearing and post-hearing proposals. RTCPB is an existing 40 bed residential treatment center for adolescents between the ages of 12 and 18, located in Palm Beach County, on the campus of Lake Hospital of the Palm Beaches. It provides services similar or identical to those services proposed to be offered by FRTC. It is JCAH accredited through an extension of Lake Hospital's accreditation and is close to JCAH accreditation in its own right. RTCPB is a subsidiary of Psychiatric Hospitals, Inc. (PIA) . PIA operates two residential treatment centers in Florida. RTCPB is not CON licensed as an IRTP, under Chapters 381 and 395, F.S., but is licensed as a child care facility under Chapter 395, F.S., as a provider of services to HRS under Chapters 10M-9 and 10E-10, F.A.C. RTCPB accepts substance abusers in residency. RTCPB has also applied for CON licensure as an IRTP in a batching cycle subsequent to the present one. That application has been preliminarily denied by HRS and RTCPB is awaiting a Section 120.57(1), F.S., formal administrative hearing thereon. RTCPB now estimates its current patients' average length of stay (ALOS) as 106 days but projects a 315 day (10 1/2 months) ALOS in its subsequent CON application. RTCPB is charging $185 per day or HRS patients and $255 with $23-26 ancillaries [sic] per day for private pay patients. Like FRTC, it uses a "levels" system of behavior modification and patient control. Humana is a 250 bed JCAH accredited hospital located in Palm Beach County, Florida. Of Humana's 250 beds, 162 are traditional acute care beds and 88 are psychiatric beds. The 88 psychiatric beds are administratively divided into different units, one of which is a 27 bed adolescent psychiatric unit; this unit opened January 20, 1987, and has an average length of stay of nine months. Humana's existing CONs are for short-term adult psychiatric beds and do not authorize an adolescent unit with an average length of stay of over 30 days. Ninety days is the demarcation, by rule, between short- and long-term psychiatric beds. Humana recently applied for a CON for more psychiatric beds and also applied for an IRTP CON in a subsequent batch to the present one. Humana's present 27 bed adolescent psychiatric unit provides grossly similar services to those proposed to be offered by FRTC, but its emphasis is more medical-psychiatric than emotional-behavioral. Like FRTC, Humana does not accept in residency adolescents with a primary diagnosis of substance abuse. Like FRTC and RTCPB, Humana uses a "levels" system. Eighty percent of Humana's patient mix are commercial pay, and the unit is running at a 15 to 20 percent profit margin. Humana usually charges $325 per day on their adolescent unit plus ancillaries [sic] amounting to 10 percent of the patient's bill, but HRS contract patients pay only $225 per day. Humana has lost a number of adolescent unit referrals to RTCPB since RTCPB opened June 1, 1987, but the unit continues to be almost fully occupied. Humana's main referral asset, as well as the source of the confusion of referring entities, appears to be the reputation of its director, Dr. Kelly. Dr. Kelly previously directed a program at Lake Hospital which was identical to the program that he now directs at Humana. Lake Hospital currently has RTCPB operating under its auspices, but not Dr. Kelly. Nature of the FRTC Program FRTC's proposed program is designed to serve those persons in the designated age group who have psychiatric diagnoses of a severity requiring a long-term approach in a multidisciplinary structured living setting to facilitate recovery. It will not, however, treat adolescents with an active diagnosis of chemical dependency or substance abuse. It also only commits to 1.5 percent indigent care. The proposed FRTC program differs from an acute care setting in significant quantitative and qualitative ways, the most visible of which is that acute care psychiatric settings (either long- or short-term) are geared toward dealing with patients actively dangerous to property, themselves, or others, but patients whom it is reasonably assumed will respond primarily to physiologically-oriented physicians and registered nurses administering daily medication, treatment, and monitoring, as opposed to a long-term living arrangement emphasizing behaviorally-oriented group interaction as an alternative to parental care at home. FRTC will, however, accept patients with psychiatric diagnoses of effective disorders, depression, schizophrenia and impulse disorders and those who may be potentially harmful to themselves, others, or property for whom no other less intensive or less restrictive form of treatment would be predictably helpful. FRTC would fall on the continuum of care below an acute psychiatric facility such as Humana. Assessment of such a target group on a patient by patient basis is obviously subject to a wide variation of interpretation by qualified health care professionals, but FRTC anticipates both verifying referral diagnoses and assuring quality of care by insuring that each new patient is seen by a psychiatrist within 24 hours of admission, and by having each case reviewed by an independent utilization review committee. FRTC also plans to complete appropriate patient assessments and develop and update individual, integrated treatment programs. FRTC will provide, where appropriate, for continuity of care from previous acute care institutions through the FRTC program and out into more normal individual or family living arrangements. Parents will have to consent to their child's placement at FRTC. FRTC's program proposes an average length of stay of 365 days (one year) with a range of six months to two years. Based upon all the credible record evidence as a whole, including, but not limited to, the protestants' respective ALOS, this is a reasonable forecast despite contrary evidence as to Charter's experience at its "template" Virginia institution, Charter Colonial. FRTC's program components will include individual therapy, recreational therapy, occupational therapy, and general education. The general education component in FRTC's proposed program is more general and more open than that offered in acute care settings, such as Humana. FRTC's overall program will utilize a "levels" system of behavioral management based upon patients earning privileges, which levels system has a good patient rehabilitation and functional administrative track record in many different kinds of psychiatric health care facilities, including Humana and RTCPB. FRTC intends that each patient's program will be individualized according to age and program component directed to his/her diagnosis and each patient will receive individual, resident group, and family therapies. As to assessment, types of therapy, continuity of care, and general education provisions, FRTC's proposal is grossly consistent with that of its "template." To the extent there is evidence of inconsistencies between the two programs in the record, the FRTC proposal represents either improvements over, or refinements of, its template program which have been developed as Charter/FRTC has learned more about what actually "works" for the IRTP form of health care, or it represents changes to accommodate Florida's perception of what less restrictive but still intensive residential treatment should be, or it anticipates local community needs. Quality of Care The applicant's parent corporation is an experienced provider of many types of accredited psychiatric facilities. The type of quality assurance program proposed and the staff mix provide reasonable quality care assurances. Design, Construction, and Personnel Refinements to FRTC's original schematic take into consideration the influence that physical structure has on an Intensive Residential Treatment Program. Those refinements include modification of a multipurpose room into a half-court gymnasium, addition of a classroom, addition of a mechanical room, modification of the nursing station to decrease the amount of space, and the deletion of one seclusion room and addition of a four to six bed assessment unit. The modifications resulted in the addition of approximately 1,000 square feet to the original design. A minimum of four to six acres would be necessary to accommodate the modified design which totals approximately 32,000 square feet. Public areas, such as administration and support services, dining room, and housekeeping areas, are to the front; private areas, such as the nursing units, are to the back. The facility's middle area houses gym, classrooms, and occupational therapy areas. The location encourages residential community involvement. Each of three, 20-bed units is made up of a group of two consultation rooms, a galley, a laundry, a day room and core living space located directly across from the nursing station for maximum observation and efficiency. Each unit comprises a separate wing. Six handicapped accessible patient beds are contemplated; the building will be handicapped-accessible. The staffing projections have increased and the pattern has been minimally altered in the updates. The updated pro forma also modified the initial financial projections so as to increase salary expense and employee benefits based on this change in staffing. An increase in the total project cost impacted on depreciation, and interest expense changed with time. All these changes are reasonable and insubstantial. FRTC's design is adequate for providing a suitable environment for intensive residential treatment for children and adolescents even though it is not identical to Charter's "template" for residential treatment and even though Charter's extensive experience with acute care facilities has focused these changes in its residential treatment concepts. The parties stipulated to the adequacy of FRTC's proposed equipment list and costs. Total construction cost was demonstrated to be reasonably estimated at $2,078,000. The square footage costs of $64.86 per square foot represet an increase from the square footage costs contained in the original CON application. The original budget was updated based upon a three percent inflation factor and the addition of the approximately 1,000 square feet. The additional space is not a significant construction change. The total project costs of $4,728,000 are reasonable. The testimony of HRS Deputy Assistant Secretary for Regulation and Health Facilities, John Griffin, who testified by deposition, (RTCPB's Exhibit 8, pp. 21-22) revealed no firm policy on what the agency, within its expertise, views as substantial and impermissible amendments to a CON application; HRS did not move at hearing to remand for further review; and the undersigned concludes that the changes in facility design, costs, and staffing do not represent significant changes which would be excludable as evidence and that they do represent permissible minor modifications and refinements of the original FRTC application. Site Availability No party contended that FRTC's application was a "site specific" application, that a residential treatment program is otherwise required to be "site specific," or that an IRTP CON is governed by a "site specific" rule or by "site specific" statutory criteria. Therefore, it was only necessary for FRTC in this noncomparative proceeding to establish that several suitable sites were available within the required geographic parameters at the financial amount allotted in FRTC's projections. FRTC did establish financially and geographically available and suitable sites through the testimony of Robert H. Ellzey, a qualified expert in commercial real estate values. The Non-Rule Need Policy There are no hospital licensed Intensive Residential Treatment Programs in Palm Beach County or in District IX. IRTPs are in a separate licensure category by law from psychiatric beds, acute care beds, and rehabilitation beds. There is a separate need methodology for long-term psychiatric beds and there are no CON licensed long-term psychiatric programs for children and adolescents in District IX, unless one considers Humana which is treating adolescents well beyond 30 or 90 days residency. HRS has no promulgated rule predicting need for IRTPs seeking specialty hospital licensure under Chapter 395, F.S. Subsequent to advice of its counsel that a CON must be obtained as a condition of IRTP licensure pursuant to Chapter 395, F.S., HRS elected to evaluate all IRTP CON applications in the context of the statutory criteria of Chapter 381, F.S., and in the context of HRS' non-rule policy establishing a rebuttable presumption of need for one "reasonably sized" IRTP in each HRS planning district. The May 5, 1988 Final Order in Florida Psychiatric Centers v. HRS, et al., DOAH Case No. 88- 0008R, held this non-rule policy invalid as a rule due to HRS' failure to promulgate it pursuant to Section 120.54, F.S., but that order also held the policy not to be invalid as contrary to Chapter 381, F.S. That Final Order intervened between the close of final hearing in the instant case and entry of the instant Recommended Order, however, it does not alter the need for the agency to explicate and demonstrate the reasonableness of its non-rule policy on a case by case basis. HRS was unable to do so in the formal hearing in the instant case. Notwithstanding the oral testimony of Robert May and Elizabeth Dudek, and the deposition testimony of John Griffin, it appears that the non- rule policy is not based upon generally recognized health planning considerations, but solely on the agency's statutory interpretation of recent amendments to Chapter 395 and some vague perception, after internal agency discussions, that the policy is consistent with certain promulgated need rules and with certain other non-rule policies for other types of health care entities, which other non-rule policies were never fully enunciated or proved up in this formal hearing. The HRS non-rule policy was also not affirmatively demonstrated to be rational because it does not take into account the reasonableness of a proposed facility's average length of stay, referral sources, geographic access, or other factors common to duly promulgated CON rules. Numerical Need and Conformity to Applicable Health Plans FRTC sought to support HRS' non-rule policy on numerical need for, and definition of, a "reasonably sized" IRTP through the testimony of Dr. Ronald Luke, who was qualified as an expert in health planning, development of need methodologies, health economies, survey research, and development of mental health programs. In the absence of a finding of a rational non-rule policy on numerical need, Dr. Luke's evidence forms the cornerstone of FRTC's demonstration of numerical need. Through the report and testimony of Dr. Luke, and despite contrary expert health planning testimony, FRTC established the numerical need for, and reasonableness of, its 60 licensed IRTP beds in District IX with projected 60 percent occupancy in the first year and 50 percent in the second year of operation using two bed need methodologies. Dr. Luke ultimately relied on a utilization methodology based upon 1991 population projections. Dr. Luke used a census rate per 100,000 population of 21.58. This is appropriately and reasonably derived from national data for residential treatment patients aged 0-17, regardless of the fact that the types of residential treatment considered by the NIMH data base employed by Dr. Luke greatly vary in concept and despite HRS having not yet clearly defined the nature of the programs and services it expects to be offered by a Florida specialty hospital licensed IRTP. Therefrom, Dr. Luke derived an average daily census of 52 in 1991. That figure yields a bed sizing of between 58 and 61 beds, depending on whether an 85 percent or 90 percent occupancy factor is plugged in. Either 58 or 61 beds is within the range of ratios calculated by Dr. Luke's other methodology for currently licensed Florida IRTPs in other districts. Assuming a target occupancy rate of 85 percent and an ALOS of one year, Dr. Luke considered the gross District IX IRTP bed need to be 60. In the absence of any like program to assess occupancy for and in the presence of similar programs such as Humana operating at nearly full occupancy now and RTCPB forecasting its occupancy at 88 percent in 1990 if it were IRTP-licensed, it is found that 60 beds are justified. Since there are no IRTP beds licensed as specialty hospitals in the current district bed inventory, no adjustment of this figure must be made to account for existing licensed IRTP beds. Simply stated, this is a CON application for an IRTP, nothing more and nothing less, and the subtrahend to be subtracted from gross district bed need is zero when there is a zero specialty hospital licensed IRTP bed inventory. Luke's calculated gross need of 60 bed is also his net need and is accepted. Fifty beds is generally the minimum size HRS will approve to be feasible for any free standing facility to be eonomically efficient and to be able to benefit from economies of scale. This 50 bed concept is within the wide range of bed ratios that HRS implicitly has found reasonable in, previously- licensed IRTP CON approvals. Conformity With Applicable Health Plans Section 38l.705(1)(a), F.S., requires HRS to consider CON applications against criteria contained in the applicable State and District Health Plans. In this regard, neither the applicable State Health Plan nor the applicable District IX Local Health Plan make any reference to a need for intensive residential treatment facilities. The District IX Health Plan addresses the need for psychiatric and substance abuse services to be available to all individuals in District IX. FRTC's project addresses this goal only in part. The District Health Plan states that priority should be given to CON applicants who make a commitment to providing indigent care. FRTC proposes only 1.5 percent indigent care which works out to only 1/2 of the ALOS of one patient at the proposed facility and is hardly optimum, but in a noncomparative hearing, it stands alone as advancing the given accessibility goal within the plan. Objective 1.3 of the State Health Plan provides: Through 1987, additional long-term inpatient psychiatric beds should not normally be approved unless the average annual occupancy for all existing and approved long-term hospital psychiatric beds in the HRS District is at least 80 percent. FRTC's project is neutral as to this goal. The District Plan also contains a goal for a complete range of health care services for the population of the district. FRTC advances this goal. The State Health Plan further provides: Goal 10: DEVELOP A COMPLETE RANGE OF ESSENTIAL PUBLIC MENTAL HEALTH SERVICES IN EACH HRS DISTRICT OBJECTIVE 10.1: Develop a range of essential mental health services in each HRS district by 1989. OBJECTIVE 10.3: Develop a network of residential treatment settings for Florida's severely emotionally disturbed children by 1990. RECOMMENDED ACTION: 1.03A: Develop residential placements within Florida for all SED children currently receiving ing treatment in out-of-state facilities by 1990. The FRTC project advances these goals in part. To the extent SED patients placed outside the state for residential treatment services are HRS patients whom FRTC as yet has not contracted to treat, the FRTC project does not advance this goal. However, increased insurance reimbursement will advance accessibility for those SED children and adolescents in need of this type of care whose families have insurance coverage. The State Plan also emphasizes a goal for a continuum of care. The FRTC plan advances this goal. Financial Feasibility William S. Love, Senior Director of Hospital Operations for Charter, was accepted as an expert in health care finance. Mr. Love prepared the pro forma financial statement contained in the original CON application and the update of the pro forma in response to HRS' completeness questions. Mr. Love also had input into the updated financial information which increased salary and benefit expense. (See FOF No. 11). The revised pro forma utilized an assumption of gross patient revenues of $300 per day and a 365 day ALOS, both of which are reasonable and both of which support the rest of FRTC's assumptions (See FOF No. 9). Routine revenues are based on the types of routine services patients normally receive on a daily basis. Ancillary revenues are support revenues such as pharmacy charges, X-rays, lab charges, and other charges not generally utilized on a routine basis. The only charges to patients at the proposed FRTC facility are the routine and ancillary charges. The assumptions with regard to contractual adjustments are that there will be no Medicare utilization since the facility is projected for children and adolescents and no Medicaid since freestanding facilities in Florida are not eligible for Medicaid. Two percent of gross patient revenues are estimated to be contractual adjustments which relate to HMOs and PPOs. FRTC addresses indigent care by 1.5 percent of gross revenues which will be dedicated to Charter Care which is free care. The assumptions with regard to bad debt are that 8 percent of gross revenue will be the allowance for bad debt. An assumption of 20 percent of salaries was used for employee benefits which include the FICA tax, health insurance, dental insurance, retirement plans, and other benefits. Supplies and expenses were calculated as a function of patient day with a $90 per day estimate. Included in supplies and expenses are supplies utilized in the delivery of health care services as well as medical professional fees such as the half-time medical director and purchased services such as laundry, linen, speech and hearing services, utilities, telephone, malpractice insurance, repairs and maintenance. The depreciation assumptions are that the building would be depreciated over 40 years, fixed equipment over 20 years and major movable equipment over 10 years. Pre-opening expenses for the first 45 days of operation have been capitalized over 60 months with low amortization costs over 15 years. There is no income tax assumed in the first year but the assumption in subsequent years is that the tax rate will be 38 percent. The failure to assume a hospital tax is inconsequential. The assumptions for the second fiscal year are basically the same. Although staffing remained the same, the FTEs per occupied bed increased, and a 7 percent inflation factor was added. The project will be financially feasible even though the facility is pessimistically projecting a loss of $102,000 for the first year because a facility can suffer a loss in its first year of operation and remain financially feasible. The facility projects a $286,000 profit in its second year of operation. With regard to utilization by class of pay, FRTC has assumed that the insurance category represents 65.5 percent of total revenues projected and includes such things as commercial insurance, Blue Cross and any third party carrier other than Medicare and Medicaid. Assumptions with regard to the private pay are that 25 percent of the total revenues will be generated by private pay patients and would include the self pay portions of an insurance payor's bill, such as deductible and co-insurance. Bad debt was assumed to be 8 percent, and Charter Care or free care, 1.5 percent. FRTC's projected utilization by class of pay is reasonable and is supported by the protestants' current experience with commercial insurance utilization and reimbursement and the predicted recoveries if RTCPB were IRTP-licensed. In the second year of operation, the assumptions with regard to utilization by class of pay demonstrated an increase in the insurance category from 65.5 to 66.5 percent with everything else remaining the same except for a decrease in bad debt to 7 percent. The assumption with regard to a decrease in bad debt is based upon the establishment of referral patterns from acute psychiatric facilities, outpatient programs, mental health therapists, and miscellaneous programs. The assumption is that 65 percent of the patients would be covered by insurance, not that 65 percent of each bill would be paid by insurance. Charter's experience has been that a good portion of the deductible and co-insurance payments are collectible. FRTC did not assume payment from any governmental contracts or HRS reimbursement. FRTC's projected self pay percentages assumption reasonably contemplates the percentage of households in the district which can afford its projections for self pay. For purposes of evaluating the financial feasibility of this proposal, a management fee was not included because in looking at the financial feasibility of a facility the expenses of a corporate home office are incurred whether or not the facility is built. It was not appropriate to allocate a management fee to the hospital because it showed a loss in its first year of operation and a profit in its second. When the facility becomes profitable, FRTC anticipates passing the profit through to the corporation to help reduce the corporate overhead. If a management fee had been allocated to this facility, allocations would have had to have been made to the other Charter facilities to show where their management expense had decreased and their profitability increased. It would have been inappropriate to take these fixed expenses and allocate a portion of them to the proposed FRTC facility. In addition to the fact that the failure to include a management fee in the pro forma should not affect the feasibility of the project, Charter has good cause not to apply a $44 per patient day management fee in its IRTP. FRTC's categories of payor class are generally reasonable based in part on the results of a survey performed in Florida. FRTC's assumptions and calculations are reasonable, based upon the testimony of William S. Love and Dr. Ronald Luke, notwithstanding the testimony of Dan Sullivan, Donald Wilson, and Christopher Knepper, also qualified as experts. Specifically, it is found that Dr. Luke's assessment that the designation of a facility as a licensed specialty hospital has a beneficial effect on its ability to obtain insurance reimbursement for services, that reimbursement impacts to increase ALOS, and that the breakdown of sources of payment that FRTC has used is reasonable, is a credible assessment, supported elsewhere in the record. It is also found that Mr. Knepper's assessment for bad debt is inadequately supported and inconsistent with other evidence, and therefore not credible. Mr. Sullivan's testimony is not persuasive. Staffing and Recruitment Dr. Brett, a Charter regional director for hospital operations, was accepted as an expert in staffing psychiatric facilities including residential treatment centers. His distinctions between the acute care and residential types of facilities are corroborated and explained by other witnesses and evidence. Mr. Joyner was accepted as Charter's expert recruiter. Although the depth of Mr. Joyner's hands-on involvement in active recruitment is not extensive, the Charter network of manpower referrals and "head hunting" will obviously support this project. Upon the combined testimony of Dr. Brett, Mr. Joyner, and Paul Bodner, Charter's senior director of physician relations, there is sufficient evidence that FRTC can recruit a suitable staffing pattern to ensure quality of care (see FOF Nos. 9 and 10) in its proposed program, even if it has to hire from out of state and pay somewhat higher salaries due to some qualified manpower shortages in certain categories in Palm Beach County. In making this finding, the undersigned has considered the testimony of Donald Wilson concerning certain institution-specific recruiting problems of his principal, RTCPB, and the "step down" status of residential treatment as testified by Mary Certo, of Humana. Impact on Costs and Competition The FRTC project can reasonably be expected to attract patients with insurance coverage who would otherwise go to existing facilities for care, however, in light of the relatively consistent occupancy rates at Humana and RTCPB despite both their geographical proximity and the unique confusion of referrals arising over the relocation of Dr. Kelly, this impact is not altogether clear. Dr. Kelly's reputation will not be impacted by granting of a CON to FRTC. It is also not possible upon the basis of the record created in this hearing to factor out reimbursement differences inherent in Humana's current CON classification and RTCPB's circumstance as an unlicensed intensive residential treatment center. In any case, the negative impact upon Humana must be measured against the health planning goals expressed by several witnesses that it is desirable to substitute more suitable, less restrictive facilities for institutionalization of the severely emotionally disturbed child and adolescent whenever possible and that it is also desirable to encourage residential treatment upon a continuum of care basis after acute psychiatric care. The FRTC project will obviously increase the accessibility to this type of treatment for young people who have the appropriate insurance coverage. These goals are in conformity with the applicable health plans. The FRTC project can reasonably be expected to initially increase some costs of health services throughout the district because it will inflate some salary costs due to competition, but the negative impact will probably be short term.
Recommendation Upon a balanced consideration of all relevant criteria it is RECOMMENDED that HRS enter a Final Order approving FRTC's CON application for an IRTP, as updated, for licensure as a specialty hospital. DONE and ORDERED this 28th day of June, 1988, in Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of June, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 87-2037 & 87-2050 The following constitute specific rulings pursuant to Section 120.59(2), F.S., with regard to the parties' respective Proposed Findings of Fact. Proposed Findings of Fact (PFOF) of FRTC: Covered in "issue" and FOF 1. Covered in FOF 1 and 2. 3-7. Except as subordinate or unnecessary, accepted in "procedural and evidentiary matters" and FOF 11. 8. Accepted in FOF 12. 9-12. Except as subordinate, unnecessary, or cumulative, accepted in FOF 7-9. 13. Accepted in FOF 10. 14-17. Accepted in part and rejected in part in FOF 7-11, 30. Although portions of the underlying data referred to in proposal 16 and by Mr. Joyner in his testimony was excluded from evidence, he was qualified as a recruitment expert and for the reasons set forth in FOF 30, his opinion is accepted. 18-19. Accepted in FOF 21. Accepted in FOF 22, 26, 29. Accepted in FOF 23. Accepted in FOF 24. Accepted in FOF 25 and 29. Accepted in FOF 26 and 29. Except as subordinate or unnecessary, covered in FOF 27. Except as mere argument or statement of position, accepted in FOF 26-27, and 29. 27-29. Accepted in part and rejected in part as unnecessary and cumulative to the facts as found; in part rejected as mere argument or recital of testimony, not distinguishing opinion from fact. To the degree adopted or accepted upon the record as a whole, see FOF 26-29. 30-31. Accepted in FOF 28. 32-40. Accepted in part and rejected in part as unnecessary and cumulative to the facts as found; in part rejected as mere argument or recital of testimony, not distinguishing opinion from fact. To the degree adopted or accepted upon the record as a whole, see FOF 9, 11, 21, 26-29. 41-44. Accepted in part and rejected in part as unnecessary and cumulative to the facts as found in FOF 29-32. 45-47. Rejected, as recital or summation of testimony and as part of preliminary agency review not relevant to this de novo proceeding. 48. Covered in FOF 7, 18-20, 22, and 26. 49-52. dejected as set out in "organic law and legislative background," "procedural and evidentiary matters," FOF 13-15. See also COL. 53. Accepted in FOF 16. 54-58. Rejected in part and accepted in part as set out in FOF 14-15. Rejected where not supported in full by the record as a whole, where subordinate, unnecessary or cumulative to the facts as found and where mere recital of testimony. 59. Accepted in principle and modified to conform to the record in FOF 18-20, 31. 60-61. Accepted in part and rejected in part as stated in "procedural and evidentiary matters" and in FOF 14-16 and the COL. Accepted in FOF 15 and COL. Accepted in FOF 18-20, 31. 64-68. Rejected as unnecessary to the facts as found in FOF 1, 7, 13-15 and 29, also in part as not supported by the record as a whole, and as primarily legal argument and recitation of testimony. Accepted in FOF 3-4 and 30. Accepted in part and rejected in part in FOF 3-4, 7, 26, and 29. 71-74. Except as subordinate or unnecessary, accepted in FOF 5-9 and 30-32. HRS' Proposed Findings of Fact (PFOF): 1-3. Accepted in "organic law and legislative background." 4. (Two paragraphs) Accepted FOF 3-4. Accepted in "issue" and FOF 3-4. Accepted, FOF 29-32. Rejected as unnecessary. Accepted, FOF 1. 10-18 & 20. Except as subordinate or unnecessary, accepted in FOF 5, 6, 15, 26, 31. 19. Rejected as irrelevant. 21-28. Accepted in part as modified to conform to the record as a whole in FOF 6-9, 30-31. The irrelevant, unnecessary or subordinate material has also been rejected. 29-31. Accepted in FOF 4, 9, 21, 26, 29-31. 32-35. Accepted in FOF 7-9. 36-41. Accepted in FOF 7-9 as modified to conform to the record as a whole, to eliminate subordinate and irrelevant matters and to comport with the rulings on the insubstantiality of updates to the CON application, in "procedural and evidentiary matters" and FOF 11. 42-45. Accepted as modified to conform to the record as a whole, to eliminate subordinate and irrelevant matters and to comport with the rulings on the insubstantiality of updates to the CON application in "procedural and evidentiary matters" and FOF 9-11, 21, 23, 30 and 32. Accepted in FOF 22, 26, 29. Accepted in FOF 7, 20, 22, 26. 49-52. Accepted in FOF 3, 4, 21-29. Assuming, based on the transcript reference, that this proposal refers to FRTC's pro forma, this proposal is accepted but unnecessary for the reasons set forth in rulings on HRS' PFOF 36-45. See FOF 11 and 21-29. Accepted in FOF 13-15. 55-58. Rejected as unnecessary. 59. Accepted but not dispositive of any material issue at bar. See FOF 13-15. 60-62. Accepted in part and rejected in part in FOF 13-14, as mere recital of testimony and statements of position. 63. Accepted in FOF 29. 64-65. Accepted in FOF 5-9. Accepted in FOF 7-9. Accepted that HRS made this assumption but it fails to explicate the non-rule policy. See FOF 13-14. Accepted in FOF 16. Rejected as a statement of position or COL. Peripherally, see COL. Accepted in FOF 13-14 but not dispositive of any material issue at bar. Rejected in FOF 13-14. 72-74. Rejected as preliminary agency action, irrelevant to this de novo proceeding. 75-76. Accepted in FOF 17-20. This is a subordinate definition and not a FOF. See FOF 30-31 and COL. Rejected in part and accepted in part in FOF 17-20, 31. Accepted in FOF 10. Accepted in FOF 13-15. Accepted as stated in the "procedural and evidentiary matters," FOF 13-15 and in the COL. 82-85. Covered in FOF 3-6, 13-15. 86. Rejected as preliminary agency action, irrelevant to this de novo proceeding. 87-88. Rejected as subordinate or unnecessary. 89. Accepted in FOF 29. 90-96. Accepted as modified to conform to the record evidence as a whole and FOF 15-16 and to reject subordinate and unnecessary material. Accepted without any connotations of the word "therefore" in FOF 4, 7-9, 21 and 29. Rejected as unnecessary and cumulative. Accepted in "organic and legislative background" and FOF 13-15. Rejected as not established upon the record as a whole; unnecessary. Rejected as a statement of position only. Joint Proposed Findings of Fact of RTCPB and Humana 1-2 Accepted in FOF 1. 3-4. Accepted in FOF 2. 5-6. Accepted in "issue" and FOF 3-4. 7. Accepted in "issue" and FOF 5-6. 8-13. Accepted in part and rejected in part as set out under "procedural and evidentiary matters," FOF 3-6, 13-15, and the COL. 14-18. Except as subordinate or unnecessary, accepted in FOF 1, 7-9, 11, 21-29. 19-27. Rejected as irrelevant preliminary action to this de novo proceeding. 28-36. Rejected in part and accepted in part upon the compelling competent, substantial evidence in the record as a whole as set forth in FOF 13-14. Also as to 33 see FOF 15. 37-52. Accepted in part and rejected in part in FOF 13-16 upon the greater weight of the credible evidence of record as a whole. Irrelevant, unnecessary and subordinate material has been rejected, as has mere argument of counsel. Accepted in FOF 17. Rejected in FOF 20, 31. Accepted as modified in FOF 20, 31. Excepting the mere rhetoric, accepted in FOF 18, 31. Accepted as modified in FOF 7, 18-20, 26, 31. 58-59. Accepted in part and rejected in part in FOF 17-20, 26, Rejected as subordinate. Rejected as recital of testimony and argument 62-63. Rejected as unnecessary. 64-67. Accepted in FOF 3-4, 6-9. The first sentence is rejected as cumulative to the facts as found in FOF 3-4, 6-9. The second sentence is rejected as not supported by the greater weight of the evidence as a whole. Rejected in FOF 4, 21. Accepted in FOF 4 and 21, 29. Rejected as unnecessary Accepted in FOF 26. Rejected in FOF 15-20, 31. Rejected as unnecessary in a noncomparitive hearing. 75-87. Except as irrelevant, unnecessary, or subordinate, accepted in FOF 5-9, 30, 31. Rejected in part as unnecessary and in part as not comporting with the greater weight of the evidence in FOF 7-10 and 30. Accepted in FOF 1, 5-9. 90-92. Accepted in FOF 5-9. Rejected in FOF 5-6. Rejected as subordinate. 95-98. Accepted in FOF 5-9. 99-102. Rejected as unnecessary. 103. Except as subordinate or unnecessary, accepted in FOF 5-9. 104-118. Except as unnecessary, subordinate, or cumulative to the facts as found, these proposals are covered in FOF 5-9, 30-31. Except as Subordinate, covered in FOF 6 and 31. Accepted in part in FOF 5-9, 21-29, otherwise rejected as misleading. Except as subordinate, accepted in FOF 6. Rejected as unnecessary. Accepted in FOF 21. Accepted in FOF 21-29. Rejected in part and accepted in part in FOF 21-29. Rejected as subordinate and unnecessary in part and not supported by the greater weight of the credible evidence in 21-29. 127-128. These proposals primarily recite testimony by Mr. Grono, an administrator of a psychiatric hospital for very severely disturbed persons (Grant Center). This evidence by itself is not persuasive in light of Dr. Luke's study and other admissions of the parties referenced in FOF 21-29. Upon the greater weight of contrary evidence, it is rejected. 129. Rejected as subordinate except partly accepted in FOF 29. 130-133. Rejected upon the greater weight of the evidence in FOF 9, 11 and 21-29. 134, 139. Rejected as legal argument without citation. 135-138. Rejected in FOF 21-29. 140-144. Rejected as stated as not supported by the greater weight of the credible evidence and as partly mere legal argument. See FOF 9, 21-29. 145. The first sentence is rejected upon the reference to PFOF 140-144 for the same reasons given above and the remainder is rejected as subordinate. 146. Rejected in FOF 21-29. 147. Rejected as mere legal argument without citation. 148-149. Rejected in FOF 21-29, particularly 27 upon the greater weight of the credible evidence. The mere legal argument is also rejected. 150-157. Rejected as set out in FOF 28 upon the greater weight of the credible evidence. Uncited argument and statements of position have likewise bean rejected. 158, 160. Rejected as mere argument without citation. 159. Rejected as subordinate and not dispositive of any material issue at bar in FOF 23. 161. Rejected as mere argument. 162-167. Rejected as not supported by the greater weight of the credible evidence in FOF 30-32. Also 167 is rejected as mere argument without citation. 168. Accepted in part and rejected in part in FOF 30-32. 169. Accepted but subordinate. 170. Rejected as unnecessary and cumulative to the facts as found in FOF 31. 171-180. Covered in FOF 30-32. 181-185. Rejected as contrary to the evidence in part and in part unnecessary and cumulative to the ruling in "procedural and evidentiary matters" and FOF 7, 10-11, 21, 23, 30-32. 186-188. Rejected in FOF 7, 10 and 30 upon the greater weight of the credible evidence. 189. Rejected as unnecessary 190. Rejected in FOF 30. 191-392. Accepted but not dispositive of any material issue at bar. See FOF 30-32. 193. Rejected in FOF 30-32. 194-195. Except as subordinate or unnecessary, rejected in the several references to future establishment of referral networks. See FOF 21, 27. 196-197 & 199. Rejected as unnecessary 198. Rejected as irrelevant in part and immaterial in part upon the rulings in "procedural and evidentiary matters" and FOF 11. 200. Rejected as unnecessary 201-202. Accepted in FOF 7, 20, 26-27 and 31, but cumulative. 203. Covered in the COL. Rejected in FOF 21-22. 204. Rejected as mere argument without citation. COPIES FURNISHED: Michael J. Glazer, Esquire AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 John T. Brennan, Jr., Esquire BONNER & O'CONNEL 900 17th Street, N.W. Washington, D.C. 20006 James C. Hauser, Esquire Joy Heath Thomas, Esquire MESSER, VICKERS, CAPARELLO, FRENCH & MADSEN 215 South Monroe Street Post Office Box 1876 Tallahassee, Florida 32302 Fred W Baggett, Esquire Stephen A. Ecenia, Esquire ROBERTS, BAGGETT, LaFACE & RICHARD 101 East College Avenue Tallahassee, Florida 32301 Lesley Mendelson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Conclusions DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 Having reviewed the Administrative Complaints and Notices of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Notices of Intent to Deny and Election of Rights forms to Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center. (Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Notice of Intent to Deny is superseded by this Agreement. 3. Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center shall pay the Agency $25,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 4. Conditional licensure status is imposed on Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center beginning on April 12, 2013. ORDERED at Tallahassee, Florida, on this 22 day of Marek 2014. Dg 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 copy of this Final Order was served on the below-named persons by the method designated on this 3/4°—day of Mh re ‘A 2014. 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) Thomas J. Walsh II Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Anna G. Small, Esq. Allen Dell, P.A. 202 South Rome Avenue Tampa, Florida 33606 (U.S. Mail) Linzie F. Bogan Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Lynne A. Quimby-Pennock Administrative Law Judge Division of Administrative Hearings (Electronic Mail) aU DECOY T |} 7256 9006 F111 6922 4925 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CovenNOR Better Health Care for all Floridians SEA ORETARY. EK May 22, 2013 ADMINISTRATOR “cre RECEIVED LAKESHORE VILLAS HEALTH CARE CENTER CLLIFY INTAKE UNFFLICENSE NUMBER: 1282096 16002 LAKESHORE VILLA DR . FILE NUMBER: 62921 TAMPA, FL 33613 MAY & 9 2013 CASE #: 2013005471 Agency for Health NOTICE Of INFENTEO. DENY Dear Ms. Johnson: It is the decision of this Agency that Lakeshore Villas Health Care Center’s license renewal application for a nursing home be DENIED. The specific basis for the Agency’s decision is based on the following grounds: e Pursuant to section 400.121(3)(d), F.S., the Agency shall revoke or deny a nursing home license for two class I deficiencies arising from separate surveys within a 30 month period. Lakeshore Villas Health Care Center was cited for Class I deficiencies on October 13, 2011 and November 14, 2012. ¢ = Section 408.815(1), F.S., states that in addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license or change of ownership application include any of the following actions by a controlling interest: (a) a violation of this part, authorizing statutes, or applicable rules; and (d) a demonstrated pattern of deficient performance. EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. for Adminjstraty (/C- Bernard E. Hudsds, Manager Long Term Care Unit Agen ce: Agency Clerk, Mail Stop 3 EXHIBIT 1 Visit AHCA online at ahca.myflorida.com 2727 Mahan Drive,MS#33 Tallahassee, Fiorida 32308 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: LAKESHORE VILLAS HEALTH CARE CENTER CASE NUMBER: 2013005471 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed Notice of Intent to Deny of the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Fine, Administrative Complaint, or some other notice of intended action by AHCA. An Election of Rights must be returned by mail or by fax within twenty-one (21) days of the day you receive the attached Notice of Intent_to Impose_a Fine, Administrative Complaint or any other proposed action by AHCA. If an Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please reply using this Election of Rights form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) Please return your ELECTION OF RIGHTS to: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Phone: (850) 412-3630 Fax: (850) 921-0158 PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS: OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other notice of intended action by AHCA and I waive my right to object and have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the proposed penalty, fine or action. OPTION TWO (2) __ I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)_____I dispute the allegations of facts and law contained in the Notice of Intent to Impose a Fine, Administrative Complaint, or other proposed action by AHCA, and I request a formal hearing (pursuant to Section 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within twenty-one (21) days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: Nursing Home License number: 1282096 Applicant Name: SENIOR CARE GROUP INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER Contact person: Name Title Address: Street and number City Zip Code Telephone No. ; Fax No. Email (optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: ‘Date: Print Name: Title: STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS. Case Nos. 2013006534 SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to change Respondent’s licensure status from Standard to Conditional commencing June 4, 2013, and to impose administrative fines in the amount of two thousand five hundred dollars ($2,500.00), based upon Respondent being cited for one (1) isolated State Class II deficiency. JURISDICTION AND VENUE 1. The Agency has jurisdiction pursuant to §§ 120.60 and 400.062, Florida Statutes (2012). 2. Venue lies pursuant to Florida Administrative Code R. 28-106.207. PARTIES 3. The Agency is the regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes and rules governing skilled nursing facilities pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended), EXHIBIT 1 Chapters 400, Part II, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code. 4. Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 5. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 6. The Agency re-alleges and incorporates paragraphs one (1) through five (5), as if fully set forth herein. 7. That pursuant to Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and Support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with tules as adopted by the agency. § 400.022(1)(1), Fla. Stat. (2012). 8. That Florida law provides the following: “‘Practice of practical nursing’? means the performance of selected acts, including the administration of treatments and medications, in the care of the ill, injured, or infirm and the promotion of wellness, maintenance of health, and prevention of illness of others under the direction of a registered nurse, a licensed physician, a licensed osteopathic physician, a licensed podiatric physician, or a licensed dentist. A practical nurse is responsible and accountable for making decisions that are based upon the individual’s educational preparation and experience in nursing.” § 464.003(19), Fla. Stat. (2012). 9. That Florida law provides the following: “A complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1. Reviewed no less than once every 3 months, 2. Reviewed promptly after a significant change in the resident’s physical or mental condition, 3. Revised as appropriate to assure the continued accuracy of the assessment.” Rule 59A-4.109(1)(c), Florida Administrative Code. 10. That Florida law provides “All physician orders shall be followed as prescribed and if not followed, the reason shall be recorded on the resident's medical record during that shift.” Rule 59A-4.107(5), Florida Administrative Code. 11. That Florida law provides the following: “Every licensed facility shall comply with all applicable standards and rules of the agency and shall ... Maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner.” § 400.141(1)(h), Fla. Stat. (2012). 12. That on June 4, 2013, the Agency completed a re-visit to a complaint survey of Respondent’s facility. 13. That based upon the review of records and interview, Respondent failed to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, where, inter alia, Respondent failed to implement nutritional interventions for a resident and failed to ensure that provided wound care services for the treatment of pressure ulcers for two (2) of seven (7) sampled residents, said failure being contrary to community standards and Respondent’s policies and procedures, and the same being contrary to law. 14. That Petitioner’s representative observed resident number two hundred twenty-three (223) on May 31, 2013, at approximately 5:30 p.m. and noted a thin gentleman in a private room on a low bed with signs on the door/equipment which indicated the resident was on special infection control precautions. 15. That Petitioner’s representative reviewed Respondent’s records related to resident number two hundred twenty-three (223) during the survey and noted as follows: a. The face sheet identified the resident's original admission date as May 7, 2012, and a most recent admission date as March 4, 2013. b. The resident was documented as a male, fifty-nine (59) years of age, suffering from the following diagnosis: pressure ulcer, paralysis agitans, hypertension, diabetes mellitus, anxiety, dementia without behavioral disturbance, chronic kidney disorder, depression, esophageal reflux, and Alzheimer's disease. c. A care plan was developed on May 16, 2013 as follows: i. Problem of: Actual skin breakdown related to unstageable to coccyx debrided surgically May 3, 2013; May 3, 2013 Right outer ankle open area Stage II. ii. Relevant care plan approaches were as follows: Treatment to coccyx/wound vac as ordered; Right ankle treatment as ordered; Monitor site for signs and symptoms of infection. d. Physician's orders included the following: i. May 17, 2013 Telephone Order: Continue Medihoney to right lateral ii. iil. ankle, change dressing every other day and as _ needed soiling/dislodgement. May 17, 2013, Telephone Order: Discontinue Santyl to sacral wound, discontinue Acticoat Flex to sacral wound; Apply Silver Foam to sacral wound, for wound vac dressing. May 24, 2013, Telephone Order: Sacral wound: Apply collagen matrix to wound bed; then apply KCI wound vac. ,change dressing every Monday, Wednesday, and Friday and as needed (PRN) soiling/dislodgement. The resident’s May 2013 Treatment Administration Record (TAR) reflected as follows: i, ii. The May 17, 2013, treatment to the sacral area was documented to Apply silver foam to sacral wound. Then black foam then wound vac every Monday, Wed, and Friday and PRN. This treatment was not documented as administered on May 22, 2013, Wednesday, as ordered. A new treatment of May 24, 2013, to the sacral wound, was noted to be done on the 7:00 a.m. - 3:00 p.m. shift. On Friday May 31, 2013, at approximately 6:30 p.m., the treatment for that day had not yet been initialed as administered. Respondent’s unit manager for the resident on May 31, 2013, at 6:40 p.m. confirmed to Petitioner’s representative that this treatment should have been done by the day shift nurse. Weekly wound documentation signed by the resident's unit manager and dated May 30, 2013, documented the following wound measurements for May 30, 2013: Sacrum - 8.3 cm x 8.0 cm x 1.6 cm with undermining at 12:00 and 4.5 cm deep; Ankle - 0.5 cm x 0.4 cm x 0.2 cm. A progress note by the Wound Care Advanced Registered Nurse Practitioner dated May 24, 2013, documented the exact same measurements as the May 30, 2013 unit manager's weekly wound documentation. 16. That as a result of documentation in the record of resident number two hundred twenty- three (223), which was lacking documented care to the sacral wound on May 22 and 23, 2013, and the documented unchanged appearance of the wound for six (6) days, Petitioner’s representative requested the opportunity to observe wound care of the resident on May 31, 2013 commencing at approximately 6:45 p.m. and noted as follows: a. An isolation sign was on the door with Personal Protection Equipment (PPE) hanging from a yellow door container. Prior review of the infection control log revealed that the resident was receiving contact isolation precautions for C. Diff (Clostridium Difficile). Respondent’s staff nurse “A” was at the bedside and did not have an isolation gown covering his uniform. A wound vacuum machine was on the floor, resting on a floor mat on the right side near the head of the bed. The machine tubing was attached. It was not connected to the secondary tubing that attaches to the resident. An over bed table against the wall contained new wound care supplies including foam and 4x4s needed for wound care. The supplies were open and appeared ready to use. The over bed table had no clean barrier and also resting on the table were the following: a partial glass of cranberry juice with some partially dried areas of juice noted under the wound vacuum packaging, a covered Styrofoam cup of water, eye glasses, newspaper, and a crossword puzzle book. Against the right wall were two large isolation waste bins; a red and a yellow one, with a partially consumed dinner tray on top of the red bin. Nurse “A” stated he had not completed the wound care today, and that the wound vacuum came off the sacral wound "by itself” earlier today and he had covered the wound with a temporary covering. There was a clear dressing over the sacral wound. It was not dated. Respondent’s unit manager of the 200 hall came into the room to assist with positioning the resident. Nurse “A” washed his hands, gloved, and removed a small adhesive dressing covering the right lateral ankle. The unit manager began to measure the ankle wound using a stick end of a Q tip and comparing it to a paper ruler. She referred to the ankle wound as a Deep Tissue Injury (DTI). It is listed as a pressure ulcer on the wound care consult's document dated May 23, 2013. The ankle wound was an indented, round area in the middle of the wound with a yellow/pink base. The periwound area was red/pink and appeared inflamed and slightly edematous, extending about one inch past the open area boarder. The unit manager stated that the periwound discoloration was "not there before" and she would call the doctor. Staff nurse “A” stated he disagreed with the periwound being inflamed and stated when using the medication "Medihoney"” the wound might look "a little irritated." The unit manager stated this was a change from the observation of a couple of days ago and stated the treatment with Medihoney had been ongoing for "about one month." The right ankle wound remained uncovered for the duration of the wound care, lasting over one and one half hours, including incontinence care provided by two aides, that required the turning and positioning of the resident. Staff nurse “A” changed his gloves, used hand gel, and moved to the right side of the bed to care for the sacral wound. The nurse stated he "measured him on Wednesday and the wound was around 9 x 9 centimeters (cm.) with undermining.” He stated he was recently rehired by the facility and had returned several days ago. He was a Registered Nurse, listed on the employee list as the Wound Nurse. He removed the old undated dressing which contained a 4 x 4 gauze saturated with pink serous drainage. Continuing with the same gloves he measured the wound with a paper tape and found the following: length= 9.0 cm; width, 6.5 cm; depth 3.5 om. The base of the wound was visible with about 20% yellow slough and 80 % granulation tissue. Using the same gloves, the nurse picked up a small flashlight and visualized the wound, set the flashlight down, picked up a Q tip and used the cotton end to evaluate the inside of the wound. He stated there was tunneling in two areas; one area of 1.7-2.0 cm and a bb. cc. dd. ee. ff. gg. ii. ji- I. second "around 4 o'clock" measuring 3.5 cm. The nurse measured the wound on his knees, with his uniform against the bed at times. Per a facility lab report, dated April 20, 2013, a wound culture revealed heavy growth of two bacteria, Escheriachia Coli and Proteus Mirabilis. The resident was treated with a course of the antibiotic Cipro. The resident was shaking with a Parkinsonian type tremor of the upper extremities. He was on his left side. He was alert and oriented. He denied pain at about 7:10 p.m. At about 7:10 p.m., the unit manager observed the wound vacuum on the floor. She picked it up, removed the tubing and discarded it. She initially placed it back on the floor mat, picked it up again and hung it from the bed rail. Staff nurse “A” then was observed to re-glove without sanitizing his hands, touched a red garbage bag on the bed with the clean gloves, and turned to the over bed table and began assembling his supplies, including clean 4x4s, with the same gloves. He removed his gloves, did not sanitize his hands, re-gloved, sprayed a 4 x 4 gauze with wound cleanser, and placed the 4x4 into the base of the wound. The periwound skin was red and blotchy with the perimeter extending over one inch past the open wound. There was no odor present. He again removed his gloves, did not sanitize, and re-gloved. He then moved the juice and personal items off the table, and moved some wound care supplies from the bed to the table. oo, pp. qq. SS. uu. He did not clean up the spilled/dried juice on the table. The nurse noted that the resident was incontinent of a small amount of soft bowel movement. He stopped the wound care and asked for the assistance of nurse aides to help with the incontinence care. Around 7:25 p.m., two aides came into the room wearing isolation apparel including gowns, gloves and masks. Staff nurse “A” stepped away from the bed, removed his gloves, washed his hands and left the room, stating he was going to "get wipes to wipe down the pump." The sacral wound remained covered with a 4x4 saturated in wound cleanser. The ankle wound remained uncovered. One of the aides stated they needed to remove the two rubber backed incontinence pads under the resident as they were not to be used with the special mattress under the resident. They rolled the resident side to side to remove the pads and again to provide incontinence care. The sacral wound remained covered with the unsecured 4x4 and the ankle wound remained uncovered during the incontinence care. At 7:35 p.m., staff nurse “A” returned wearing an isolation gown over his uniform. He began to clean the wound vacuum machine with a solution marked "Virasept." A hand written note on the pump spray stated "C. Diff." and large black labeling down the side stated "EXP: November 2011.” XX. yy: ZZ. bbb. cece. ddd. cece. fff. gee. After he cleaned the machine this surveyor asked about the expiration date. The unit manager from another unit appeared at the door and initially stated that was the manufacturing date, but then agreed EXP was the universal label for expiration and left to obtain another bottle of cleanser. Staff nurse “A” resumed wound care after he re-gloved and moved to the window side of the bed, attempted to reposition the resident alone, stated it was "better from the other side," and moved the over bed table again to the door side of the bed. He handled the spray bottle, the resident, the plugs to an outlet, and the air mattress controls at the bottom of the bed with the same gloves. At 7:50 p.m., nurse “A” disposed of his gloves, used hand gel, re-gloved and repositioned the resident on his left side, toward the window. At this time, the unit manager from another unit was assisting with positioning the resident, asked the resident if he was okay, and the resident stated he needed a pain pill. The resident stated his pain was nine (9) of ten (10). The unit manager of the 200 hall was informed of the need for a pain pill. At 7:57 p.m., staff nurse “A” removed the 4x4 gauze from the sacral wound, removed the right glove, did not use hand sanitizer, re-gloved the right hand, and sprayed wound cleanser on a clean 4x4. He removed both gloves and re-gloved without using hand sanitizer. He cleaned the periwound area with the wound cleanser gauze, removed his gloves, did not sanitize his hands, and continued. No bone was visible, but the wound base showed outlines of boney prominences. (An X-ray of the sacrum and coccyx were done on April 26, 11 iii. I. 000. Ppp. qaqa. SSS. uuu. 2013, to rule out osteomyelitis. There was none detected at that time.) Nurse “A” removed his gloves, used hand sanitizer, re-gloved and used several packages of skin prep to the area surrounding the wound. He removed his gloves, did not sanitize his hands, and re-gloved. He used a two inch clear tape to, as he said, "picture frame” the wound in the periwound area, At 8:07 p.m. the unit manager returned with the pain pill. . The resident, alert and oriented, stated again that the pain was nine (9) of ten (10). The unit manager gave him the pill, crushed in applesauce, and left the room without washing her hands. At 8:10 p.m., nurse “A” prepared the wound supplies by cutting the black foam piece used with the wound vacuum. He removed the gauze in the sacral wound base and, using his right index finger, covered with a clean gloved finger, he probed the sacral wound areas of tunneling near the proximal edge of the wound, toward the spine. He removed his gloves, used hand gel, re-gloved, and placed small pieces of white foam wedges along the areas of wound tunneling. He then placed the large piece of black foam into the wound, covering the wound bed. He covered the entire wound with clear plastic wound covering. He then removed his gloves, did not sanitize his hands, re-gloved and cut a hole in the center of the clear plastic wound cover for the wound vacuum site. He created a "foam bridge" across the right buttocks for the tubing for the wound vacuum, again removed his gloves, did not sanitize, and re-gloved to complete the wound care. The surveyor left the resident bedside at 8:25 p.m., one hour and forty minutes after the beginning of wound care. 17. That Petitioner’s representative further reviewed Respondent’s records related to resident number two hundred twenty-three (223) during the survey and noted as follows: a. The resident had a history of Depressive Disorder and Parkinson's Disease (Paralysis Agitans), both of which could have contributed to his inability to express his anguish during this extended wound care experience. He was observed to be passive when asked if he was doing alright, until the time when he requested pain medication. The psychological overlay from this experience, outside the expectations for wound care of this type, are yet to be determined. The dependent state of this resident was clearly documented throughout the medical record. On May 14, 2013, the nurse practitioner wrote that the resident was "eating with staff assisting" and he "wants to go home." The nurse practitioner added that the resident was "more alert" but "slow to answer.” It is unknown whether the resident felt the degree of anguish or degradation others would feel in this situation. He seemed unable to express his feelings during this observation. The resident was fifty-four (54) years of age, seventy-two (72) inches tall, and had an admission weight of one hundred fifty-four (154) pounds. Weight change history for April to May 2013 reflected as follows: i. April 16, 2013 — one hundred forty-nine (149) pounds. vi. i. April 22, 2013 — one hundred forty-eight (148) pounds. iii. April 29, 2013 ~ one hundred forty-eight (148) pounds. May 13, 2013 — one hundred thirty-eight (138) pounds. May 27, 2013 — one hundred thirty-nine (139) pounds. May 30, 2013 — one hundred thirty-nine (139) pounds. Care plan dated May 17, 2013, provides as follows: i. iii. Problem: ...risk for alteration in nutrition/hydration related to texture modified diet. Cognitive impairment. - Relevant goal related to this nutrition concern: ...will not experience significant weight changes thru next review date of 8/13/13. Relevant approach was in place to assist with achieving this goal: Supplements as ordered. The registered dietitian's notes since development of this care plan revealed the following entries: i, May 17, 2013, 10:23 p.m. - Weight and Wound review: Weight down in past month, after having been stable for over a month -- now at 138 lbs, 78% of ideal body weight (IBW). This represents a significant weight loss of 7.5% in 30 days, likely r/t C-Diff. Skin: Stage II sacrum (This wound is actually a large stage 4 pressure ulcer). Labs: most recent from 5-11 indicate moderately depleted hemoglobin and hematocrit at 10.3/30/4; albumin from. 5-2 significantly depleted at 2.48. Diet: LCS Puree with nectar thick liquid--resident averages 50% - 100% at most meals. Also receives Med Pass 90 ml four times a day, Prostat 30 ml twice a day, and multi-vitamin (MVI) with minerals for extra nutrition support. 18, Recommend: (1) change Med Pass to 120 ml four times a day secondary to wound (2) change Prostat to 30 ml three times a day secondary to wound/C-Diff (3) clarification: MVI with minerals one daily by mouth secondary to wound (3) fortified foods three times a day with meals. ii. May 30, 2013, 7:29 p.m. - Weight/Wound review: Weight has stabilized in past 2 weeks--now at 139 Ibs, 81% of ideal body weight (IBW). This represents a significant weight loss of 6.1% in 30 days and 9.7% in 90 days--most recent loss likely related to C-Diff. Skin: Stage IV sacrum and open area right ankle. Labs: most recent from 5-11 indicate moderately depleted hemoglobin and hematocrit at 10.3/30.4; albumin from 5-2 significantly depleted at 2.48. Diet: LCS Puree with nectar thick liquids-- resident eats well at meals (50-100%). Also receives Med Pass 120 ml four times a day, Prostat 30 ml three times a day, MVI with minerals, and fortified foods for extra nutrition support. Recommend: (1) magic cup each day at lunch secondary to weight loss. j. A telephone physician order written on May 17, 2013 provided: 1. Change Med Pass to 120 ml four times a day; 2. Change Prostat to 30 ml three times a day. k. The resident’s May 2013 medication administration record (MAR) and treatment administration record (TAR) did not reflect the orders to increase the supplement of Med Pass and Prostat written on May 1, 2013, and therefore the supplements were not administered in accordance with the dietitian's recommendations or physician's orders. That Petitioner’s representative interviewed Respondent’ s registered dietitian on May 31, 2013 at 7:09 p.m. regarding resident number two hundred thirty-three (233) who indicated as follows when shown that the supplement orders from May 17, 2013, had not been implemented: "He needs everything we can give him and then some. I know the order was written to increase Med Pass and Prostat. I wrote it myself.” 19. That Petitioner’s representative interviewed Respondent’s director of nursing on June 1, 2013 at 10:30 a.m. advising of the infection control concerns noted during the observation the night before with staff nurse “A” and resident number two hundred thirty-three (233) to which the director responded that the nurse was recently rehired and was not, in fact, the wound nurse, and that nurse A, who was not in the building on this day, was to be monitoring wound healing and a desk nurse on the north wing. 20. That Petitioner’s representative requested an updated employee list as nurse “A” was listed as "wound nurse," and the second list recorded nurse “A” as a staff nurse. 21. That Petitioner’s representative reviewed Respondent’s records related to resident number seventy-three (73) during the survey and noted as follows a. The resident was readmitted on November 28, 2012, per the facility face sheet. b. Diagnoses listed on the Physician Order Sheet (POS) for June 2013 included dementia, cardiovascular accident (CVA), osteomyelitis and sacral decubitus. c. Weekly Wound Documentation forms dated January 4, through May 29, 2013, documented that the resident was receiving ongoing treatment for a Stage IV sacral pressure ulcer. d. Weekly Wound Documentation forms dated April 6 through May 30, 2013, showed additional treatment for an unstageable wound on the right ischium. e. Current wound orders per the June 2013 physician order sheet were as 16 follows: i, Sacrum - apply Medihoney, fill with Ca (calcium) alginate, cover with clear occlusive dressing. Change every Monday, Wednesday and Friday and PRN (as needed). ii. Right hip - apply silver hydrogel with collagen (wound size). Cover with ded (dry clean dressing). Change Monday, Wednesday and Friday and PRN. 22. That Petitioner’s representative requested the Opportunity to observe wound care of resident number seventy-three (73) on June 3, 2013 commencing at approximately 11:35 a.m. with Respondent’s employee “B,” the resident’s assigned nurse, and noted as follows: a. b. The resident was positioned on the left side. The nurse washed her hands, put on gloves and removed the existing dressing from the resident's right hip wound. A moderate amount of serous drainage was noted on the discarded dressing. Without washing hands or changing gloves, she removed and discarded the dressing from the sacral wound. No drainage was noted on the sacral dressing. The nurse then removed her gloves, washed her hands and put on clean gloves. She proceeded to clean the sacral wound with wound cleanser and discarded the soiled gauze. She then cleaned the right hip wound and discarded the soiled gauze. The nurse did not wash her hands and/or change gloves between cleaning the two separate wounds. i. The nurse continued the wound care as ordered by applying Medihoney and calcium alginate to the sacral wound which was then covered with a clear occlusive dressing. j. Without washing hands and/or changing gloves, the nurse completed the wound care for the right hip wound with silver hydrogel ointment and collagen. k. She covered the wound with a clean adhesive dressing. 1 She discarded the used supplies, removed her gloves and washed her hands. 23, That Petitioner’s representative interviewed Respondent’s employee “B” directly after the above described observation and the employee indicated as follows: a. When asked about facility policy and/or procedure regarding wound care for residents with multiple wounds, the nurse stated that it was "usually" the procedure to provide treatment to each wound area separately. b. She stated that, due to the resident's advanced age, she chose to dress the clean, dry sacral wound and proceed directly to the hip wound dressing, c. When asked about the possibility of cross contamination, she agreed that there was a potential for cross-contamination by not washing her hands and changing gloves between the two separate wound care treatments, 24. That Petitioner’s representative reviewed Respondent’s policy and procedure on wound care for dressing applications entitled “Skin and Wound Management, Dressings, Dry/Clean, Level III from the Nursing Services Policy and Procedure Manual, copyright 2001 MED-PASS, Inc. (Revised October 2010), and noted under a subheading titled “Steps in the Procedure” the following twenty-five (25) numbered items: a. Step one (1) - Clean a bedside stand and establish a clean field. b. Steps two (2) through six (6) - Provided additional instructions for assembling supplies and preparing the resident for the procedure. c. Step seven (7) - Wash and dry your hands thoroughly. d. Step eight (8) - Put on clean gloves. Loosen tape and remove soiled dressing. e. Step nine (9) - Pull glove over dressing and discard into plastic or biohazard bag. f. Step ten (10) - Wash and dry your hands thoroughly, g. Steps eleven (11) through thirteen (13) - Provided instructions for opening and arranging dressing supplies using clean technique. h. Step fourteen (14) - Put on clean gloves. i. Step fifteen (15) - Contained instructions for wound assessment. j. Step sixteen (16) - Cleanse the wound. Use a syringe for irrigation if ordered. If using gauze, use a clean gauze for each cleansing stroke. Clean from the least contaminated area to the most contaminated area (usually, from the center outward). k. Steps seventeen (17) through nineteen (19) - Provided instructions to complete the dressing application. L. Step twenty (20) - Remove disposable gloves and discard into designated container. Wash and dry your hands thoroughly. m. Steps twenty-one (21) through twenty-five (25) - Instructions to make the resident comfortable following completion of the procedure. 25. That Respondent’s employee “B” did not follow Respondent’s policy and procedure steps seven (7), eight (8), ten (10), and fourteen (14), where the employee failed to remove gloves, wash hands, and put on clean gloves between treating two separate wounds for resident 19 number seventy-three (73). 26. That on June 24, 2013 at 12:00 noon, Respondent’s nursing home administrator and director of nursing were again informed of the concerns with wound care for residents numbered two hundred twenty-three (223) and seventy-three (73). 27. That the above reflects Respondent’s failure to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, failed to follow physician orders, and failed to ensure that it maintained the facility premises and equipment and conduct its operations in a safe and sanitary manner including, but not limited to, the failure to follow Facility policy and procedure and community standards related to hand sanitation and glove use during wound care, the failure to implement contact procedures related to infection control, the failure to implement care planned interventions, and the failure to follow physician orders. 28. That the Agency determined that this deficient practice 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, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency, 29. That Respondent was cited for an isolated Class II deficient practice. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of two thousand five hundred dollars ($2,500.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(b), Florida Statutes (2012). 20 COUNT II 30. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 31. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part IT of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2012). WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2012) commencing June 4, 2013. Respectfully submitted this 2 day of July, 2013. f eof THomas J. Walsh II, Esquire FI Bar No. 566365 Agency for Health Care Admin. 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 727.552.1947 (office) DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the ri ght to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: 7, he Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, F Torida, 32308, (850) 412-3630. 21 RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been served by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 8952 on July 2 & , 2013 to Jacqueline F. Hurt, Administrator, Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center, 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and by Regular U.S. Mail to David R. Vaughan, Registered Agent for Senior Care Group, Inc., 1240 Marbella Plaza Drive, Tampa, Florida 33619. a Phorfas J. Walsh, II, Esquire “A / Copies furnished to: Patricia R. Caufman, FOM Jonathon S. Grout, Esq. Counsel for Petitioner P.O. Box 875 Cape Canaveral, Florida 32931 22 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013006534 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)___—S—I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RICK SCOTT GOVERNOR July 8, 2013 LAKESHORE VILLAS HEALTH CARE CENTER 16002 LAKESHORE VILLA DR . TAMPA, FL 33613 Dear Administrator: ELIZABETH DUDEK SECRETARY RECEIVED GENERAL COUNSEL JUL 12 2013 Agency for Health Care Administration The attached license with Certificate #18248 is being issued for the operation of your facility. Please review it thoroughly to ensure that all information is correct and consistent with your records. If errors or omissions are noted, please make corrections on a copy and mail to: Agency for Health Care Administration Long Term Care Section, Mail Stop #33 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308 Issued for status change to Conditional. Sincerely, SFracey Weatherspoan for Kathy Munn Agency for Health Care Administration Division of Health Quality Assurance Enclosure ce: Medicaid Contract Management 2727 Mahan Drive, MS#33 Tallahassee, Florida 32308 Visit AHCA online at ahca.myflorida.com gouvmssy fy NC) GBI] JO UOISIAT ch, Areyoroeg Ajndaq ; €102/67/90 ‘LV NOLLVUd Xa vr, nk je? y €10¢/P0/90 ‘ALVC AALLOGAAA > : HONVHD SOLVIS . Sdad 6LT “IVLOL E19EE Td “WdNV.L Ud VTUA JAYOHSHAVT cOO9T YaLNAD. wav) HLTVEH SV TIA AYOHSAAVT ‘SUIMOT[OJ oy} oye1odo : 0} pozoyINe st sasusoy] sy] se pure ‘soIMeEIS BPO “TT ued ‘OOP JaideyD ur pozoyne ‘uoneENsIUUIpy sed YIeOPT 10,4 Aouesw ‘epHopy Jo a1eig.atp Aq poidope suopeyndor pue sopnz.oy) yatm porfdurcs sey “NI “dMOUD TAVD YOINAS ky) wWaryuoo oF st sIL TIVNOILIGNOD HINOH ONISYON AONVUNSSY ALIIVND HLTVaH AO NOISIAIG NOILVULSININGV dav HLTVAH YO AONADV BPO] JO 3381S 960C87IANS ‘# ASNSOIT 8¥C8l -# ALVOIMLLYEO STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, . vs. Case Nos. 2013007612 SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to change Respondent’s licensure status from Standard to Conditional commencing July 11, 2013, and to impose administrative fines in the amount of five thousand dollars ($5,000.00), based upon Respondent being cited for one (1) isolated State Class II deficiency. JURISDICTION AND VENUE 1. The Agency has jurisdiction pursuant to §§ 120.60 and 400.062, Florida Statutes (2013). 2. Venue lies pursuant to Florida Administrative Code R. 28-106.207. PARTIES 3. The Agency is the regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes and rules governing skilled nursing facilities pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended), EXHIBIT 1 Chapters 400, Part Il, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code. 4. Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 5. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 6. The Agency re-alleges and incorporates paragraphs one (1) through five (5), as if fully set forth herein, 7. That pursuant to Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency. § 400.022(1)(J), Fla. Stat. (2013). 8. That Florida law provides the following: “‘Practice of practical nursing’ means the performance of selected acts, including the administration of treatments and medications, in the care of the ill, injured, or infirm and the promotion of wellness, maintenance of health, and prevention of illness of others under the direction of a registered nurse, a licensed physician, a licensed osteopathic physician, a licensed podiatric physician, or a licensed dentist. A practical nurse is responsible and accountable for making decisions that are based upon the individual’s educational preparation and experience in nursing.” § 464.003(19), Fla. Stat. (2013). 9. That Florida law provides the following: “A complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1. Reviewed no less than once every 3 months, 2. Reviewed promptly after a significant change in the resident’s physical or mental condition, 3. Revised as appropriate to assure the continued accuracy of the assessment.” Rule 59A-4.109(1)(c), Florida Administrative Code. 10. That Florida law provides “Ail physician orders shall be followed as prescribed and if not followed, the reason shall be recorded on the resident's medical record during that shift.” Rule 59A-4,107(5), Florida Administrative Code. 11. That Florida law provides the following: “Every licensed facility shall comply with all applicable standards and rules of the agency and shall ... Maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner.” § 400.141(1)(h), Fla. Stat. (2013). 12. That on July 11, 2013, the Agency completed a complaint survey of Respondent’s facility. 13. That based upon the review of records and interview, Respondent failed to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, where Respondent failed to, inter alia, ensure and provide appropriate interventions for bowel incontinence and a dislodged dressing to prevent fecal contamination of an open wound on a resident’s coccyx whose wound was then identified to be a stage II pressure ulcer that had tripled in size within one week from July 2 through 9, 2013, said failure being contrary to community standards and Respondent's policies and procedures, and the same being contrary to law. 14. That Petitioner’s representative reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: a. b. The resident was originally admitted to the facility on April 7, 2005. Medical diagnoses included osteoarthritis, depression, Alzheimer's disease, general muscle weakness, and dysphagia. The most recent minimum data set, dated June 10, 2013; included the following: i. Section G documented the resident was total dependent upon one person physical assistance for toileting and personal hygiene and bed mobility. ii. Section M documented the resident had two stage II pressure ulcers. A care plan, last updated June 12, 2013, documented under “Problem” that the resident had a stage II pressure ulcer to the resident's left buttock. A "Weekly Wound Documentation" sheet documented on June 11, 2013, that the coccyx wound was measured to be 1.7cmx1.7emx0.1cm, and documented the wound as being a stage II pressure ulcer. A weekly wound measurement of July 2, 2013 documented the wound measured to be 1.2cmx0.7cmx0.3cm. A weekly wound measurement of July 9, 2013 documented the wound measured to be 4.0cmx4.1cmx with "unstageable tissue damage." 15. That on July 11, 2013 commencing at approximately 10:20 am., Petitioner’s representative observed resident number one (1) and interacted with Respondent’s caregivers, and noted as follows: a. The resident was observed lying in bed. b. There was a strong odor of feces that was noted at first in the hall and persisted outside of the resident's room. c. Petitioner’s representative knocked on the door, and Respondent’s employee “A” opened the door and stated that she was the certified nurse assistant (CNA) that was assigned to the resident and was going to render incontinence care to the resident. d. The resident made no attempt to verbalize, with eyes were closed and both arms appearing contracted. e. The resident was lying on the left side to reveal a moderate amount of stool. f. Approximately one inch up from the stool, a soiled gauze dressing that was not attached to the resident's skin on the bottom was dangling, and had another piece of gauze protruding from underneath that appeared heavily soiled with drainage and brown discoloration on the edges. g. Employee “A” was observed to cleanse the stool using upward strokes, repeatedly using the same soiled cloth and cleansing upward from the resident's anal area toward the wound that was not protected by the dressing. h. After removing the stool, using the one soiled wash cloth, she then dried the area with a towel. 16. That Petitioner’s representative interviewed at approximately 10:45 am. on July 11, 2013, Respondent’s employee “B” regarding resident number one (1) and the employee indicated as follows: The certified nursing assistant did not tell her anything about the resident or any concerns that should have been reported to the nurse after she rendered incontinence care. Certified nursing assistants are expected to notify the nurse to "Check their skin" during incontinence care. 17. That on July 11, 2013 commencing at approximately 12:00 p.m., Petitioner’s representative observed resident number one (1) and interacted with Respondent’s caregivers, and noted as follows: a. Respondent’s Unit Manager assisted with re-positioning the resident onto the right side so that the surveyor could observe the resident's coccyx area. The unit manager stated that the nurse had gone on break, and that no one had told her about any problem with the resident's dressing. She washed her hands and gloved. The soiled, partially attached dressing remained in place, now one hour and forty minutes after Employee “A” was observed to give the resident incontinence care and had observed that the dressing to the pressure ulcer was no longer intact. The bottom half of the outer dressing remained unsecured to the skin, and a gauze dressing protruding underneath was saturated with yellow drainage, and dots of darker brown substance on the edges. The unit manager was asked to remove the dressing so the surveyor could view the wound. g. The top adhesive part of the dressing was attempted to be removed by the unit manager, but only came loose with difficulty, and then the skin underneath was noted to be bright red and very fragile. h. The unit manager stated that she would make the wound care nurse aware and the dressing would be changed. 18. That Petitioner’s representative interviewed at approximately 1:15 p.m. on July 11, 2013, Respondent’s wound care nurse regarding resident number one (1) and the employee indicated as follows: a. The unit. manager had informed her of the problem with the resident's dressing. b. She confirmed that the dressing should be maintained to be intact at all times, and if it becomes dislodged, then the nurse, or the treatment/wound care nurse should be notified immediately. c. She confirmed that exposing the wound to fecal contamination can cause delayed healing or worsening of the wound. d. She stated that she had created a larger dressing so that the adhesive would not be in contact to the fragile skin. e. She confirmed that she had re-measured the wound on July 9, 2013, and notified the physician and the family that the wound had tripled in size within one week's time. 19. That Petitioner’s representative interviewed at approximately 2:40 p.m. on July 11, 2013, Respondent’s employee “D” regarding resident number one (1) and the employee indicated as follows: a. He is employed by the facility as a nurse, and most recently he has been a treatment and wound care nurse, although he has taken resident assignments as well. b. When asked what his expectations would be if a certified nursing assistant performed bowel incontinence care and observed that a dressing had become open or dislodged within the area of the bowel incontinence, he replied "I would expect them to clean the resident and them come to me immediately and let me know. If the dressing is open then that makes the wound susceptible to cross contamination, and maybe infection, and worsening of the wound. If it is coming off, then it is not going to be an effective dressing. The dressing should be secured on all sides of the wound to protect it and allow healing.” c. He also stated that the certified nursing assistant should not be wiping the feces toward the open wound to avoid bacterial contamination that could cause infection, impair healing, and worsen the pressure ulcer. 20. That Petitioner’s representative reviewed during the survey Respondent’s policy and procedure entitled "Diarrhea and Fecal Incontinence," last revised 8/11, and noted the following provisions: a. Step 6: "Wipe feces from the resident's skin." b. Step 11. "When evaluating the condition of the resident's skin, note the following ... c. Pressure ulcers." 21. That the above reflects Respondent’s failure to ensure residents receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency, failed to follow ensure that incontinent care was provided to assure that no contamination of wounds occurs, to ensure incontinent care includes checks for skin condition and prompt attention given to presented issues, such as loose and soiled bandages, and to ensure effective bandaging of wounds to minimize risk of infection or contamination. 22. That the Agency determined that this deficient practice 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, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency, 23. That Respondent was cited for an isolated Class II deficient practice. 24, That the fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. Section 400.23(8)*b), Florida Statutes (2013). 25. That Respondent was cited for a Class II deficient practice during a survey of June 4, 2013. See Attachment “A,” attached hereto and incorporated herein by reference. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of five thousand dollars ($5,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(b), Florida Statutes (2013). COUNT II 26. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 27. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part II of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2013). WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2012) commencing July 11, 2013. Respectfully submitted this t day of August, 2013. f J. Walsh IL, Esquire Flag Bar. No. 566365 Agency for Health Care Admin. 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 727.552.1947 (office) DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the right to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: The Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, Florida, 32308, (850) 412-3630. RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. 10 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been served by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 8990 on August » 2013 to Jacqueline F. Hurt, Administrator, Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center, 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and by Regular U.S. Mail to David R. Vaughan, Registered Agent for Senior Care Group, Inc., 1240 Marbella Plaza Drive, Tampa, Florida 33619. alsh, II, Esquire Copies furnished to: Patricia R. Caufman, FOM Jonathon S. Grout, Esq. Counsel for Petitioner P.O. Box 875 Cape Canaveral, Florida 32931 11 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013007612 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3) ___—Ss— I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(i), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees, License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) Thereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. ACHA No. 2013010196 License No. 1282096 SENIOR CARE GROUP, INC. d/b/a File No. 62921 _ LAKESHORE VILLAS HEALTH CARE CENTER, Provider Type: Nursing Home Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW the Agency for Health Care Administration (hereinafter “Agency”), by and through the undersigned counsel, and files this Administrative Complaint against Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Respondent”), pursuant to §§120.569 and 120.57 Florida Statutes (2013), and alleges: NATURE OF THE ACTION This is an action to impose administrative fines in the amount of $10,000.00, impose conditional licensure, and to impose survey fees of $6,000.00 with a 6 month survey cycle based upon Respondent being cited for one State Class I deficiency. PARTIES 1. The Agency is the licensing and regulatory authority that oversees skilled nursing facilities (also called nursing homes) and enforces the state statutes and rules governing such facilities. Ch. 408, Part I, Ch. 400, Part II, Fla. Stat; Ch. 59A-4, Fla. Admin. Code. The Agency is authorized to deny, suspend, or revoke a license, and impose administrative fines pursuant to sections 400.121, and 400.23, Florida Statutes, assign a conditional license pursuant to subsection 400.23(7), Florida Statutes, and assess costs related to the investigation and prosecution of this case pursuant to section 400.121, Florida Statutes EXHIBIT 1 2. The Respondent operates a one hundred seventy-nine (179) bed nursing home, located at 16002 Lakeshore Villa Drive, Tampa, Florida 33613, and is licensed as a skilled nursing facility license number 1282096. 3. Respondent was at all times material hereto, a licensed nursing facility under the licensing authority of the Agency, and was required to comply with all applicable rules, and statutes. COUNT I 4. Under Florida law, all licensees of nursing homes facilities shall adopt and make public a statement of the rights and responsibilities of the residents of such facilities and shall treat such residents in accordance with the provisions of that statement. The statement shall assure each resident the right to receive adequate and appropriate health care and protective and support services, including social services; mental health services, if available; planned recreational activities, and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with tules as adopted by the agency. § 400.022(1), Fla. Stat. (2013). 5. Under Florida law, every licensed facility shall comply with all applicable standards and rules of the agency and shall maintain the facility premises and equipment and conduct its operations in a safe and sanitary manner. § 400.141(1)(h), Fla. Stat. (2013). 6. Under Florida law, a complete, comprehensive, accurate and reproducible assessment of each resident’s functional capacity which is standardized in the facility, and is completed within 14 days of the resident’s admission to the facility and every twelve months, thereafter. The assessment shall be: 1) Reviewed no less than once every 3 months; 2) reviewed promptly after a significant change in the resident’s physical or mental condition; 3) revised as appropriate to assure the continued accuracy of the assessment. Rule 59A-4.109(1)(c), Florida Administrative Code. 7. The Agency re-alleges and incorporates paragraphs one (1) through three (3), and Count I of this Complaint as if fully recited herein. 8. On or about August 13, 2013, the Agency conducted a complaint survey of the Respondent. 9. That based upon observation, interviews, and the review of records, Respondent failed to ensure resident rights to dignity where Respondent failed to respect the right to a dignified transfer process and a dignified quality of life for a sole resident currently residing in a facility with revoked Medicaid and Medicare certification. 10. That resident number one (1) was transferred into the Respondent facility after the facility transferred out all prior residents under the supervision of the Agency. 11. That resident number one (1), who was eighty-nine (89) years old, was the sole resident living in the facility at the time of this investigation. 12. That Petitioner’s representative observed resident number one (1) on August 13, 2013, sleeping on a mattress on the floor, covered with a sheet in room 111, a private room. There were no signs of incontinence. 13. That resident number one (1) was the only resident in the entire facility and the entire 179 bed facility was dark with closed rooms and common areas, except the small area of the 100 hall where the resident was residing. 14. That there was one licensed practical nurse giving the resident medications, one aide caring for the resident, and the interim Director of Nursing was seated at the desk. 15. That there was no sign on the door and no specific personal protection equipment indicating a need for isolation requiring a private room. 16. That Petitioner’s representative interviewed Respondent’s corporate nursing home administrator who indicated the following related to resident number one (1): a. 17. The resident was receiving one-on-one care and the resident’s activities included fishing in the pond in the front of the facility. The resident was admitted from a “sister” facility when the resident lost funding for Medicaid. This facility offered to “forgo” the private pay fees. The facility planned to transfer the resident back to the prior facility in “about a month.” The facility was able to offer the resident a private room and the resident “needed” a private room, but was unable to explain why. That Petitioner’s representative reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: a The facility face sheet revealed the resident had an admitting diagnosis of senile dementia. Other diagnoses listed included: late effects of cardiovascular disease/dysphasia, hypertension, BPH (benign prostate hypertrophy), anxiety state, hyperlipidemia, osteoporosis, history of UTI (urinary tract infection), coronary artery obstruction with infarct, and a history of falls. The billing section of the facility face sheet documented the resident was private pay. Medicaid and Medicare numbers were listed. The responsible party listed an adult child. A primary physician was listed. Current physician’s telephone orders stated to give “high calorie shakes q (every) dinner.” h. The resident’s weight on admission was 134.0 pounds, and the resident was 67 inches tall. i. It was unknown if the resident had lost weight since the transfer to this facility one week prior. 18. That Petitioner’s representative reviewed Respondent’s policy entitled “Charity Care,” signed on August 5, 2013, after Respondent’s transfer and discharge of all prior residents, including eight (8) or more private pay residents, and noted as follows: a. Under the section “Eligibility”, the facility policy stated that an “unpaid account balance will be considered for write off as charity care or adjustment based on demonstrated need for financial assistance.” b. “Medicaid eligible residents who are currently eligible for benefits, but were not eligible at the time of service, will automatically qualify for charity care at the appropriate level”. 19. That Respondent admitted resident number one (1) on August 6, 2013, after it had successfully discharged all of the residents on August 2, 2013, including both publically funded (Medicaid and Medicare) and private pay residents. 20. That Petitioner’s representative observed resident number one (1) on August 13, 2013 commencing at 11:45 A.M. and noted as follows: a. The resident was brought into the dining room by the aide. b. The resident was served a regular diet consisting of: grilled cheese sandwich, soup, ice cream, cake, juice, and milk. c. The aide removed the crusts from the sandwich and placed it in front of the resident. 21, . The resident required verbal cues to take a bite, and refused the soup. . The resident did not consume much of the lunch, less than 50%. The aide said the resident had snacks earlier. . The resident said “hello” to the surveyor, but other responses were incoherent, though the resident did state that the resident was “not doing well,” but could not elaborate why. . The resident was seated in a wheelchair with bilateral leg splints on, covered with shoes, was clean and dry, and without evidence of incontinence. That Petitioner’s representative interviewed Respondent’s social worker related to resident number one (1) on August 13, 2013 at 11:40 A.M. and again at 2:00 P.M. and noted as follows: She had been the Business Office Manager at the sister facility, where the resident came from. . She knew the power of attorney for the resident from that position. She was promoted to social worker about one half years ago, and had worked for the corporation for about five (5) years. . When asked about the details of the transfer of the resident to this facility, the social worker stated that she received a call from the Corporate nursing home administrator and was asked to identify residents at the resident’s prior facility that were listed as either “Medicaid pending” or private pay. When asked to see if there was anyone interested in transferring to this facility,” she identified the resident because the resident’s Medicaid ended the end of July, 2013, and was pending for August, 2013. She did not recall the date of the call from the nursing home administrator, but thought it might have been August 5, 2013, three days after the discharge of all the residents on August 2, 2013. g. She did not know why the resident lost Medicaid benefits. h. She recalled that someone asked the state agency that processes benefits to please advise about the loss of benefits and she got a response that a Financial Release form was not received within sixty (60) days. i. She did not know who would have been responsible at the prior facility. j- The sister facility, where the resident had resided, had a social worker that was no longer there. k. She was now sending a list of forms to the adult child of the resident that were needed for Medicaid benefits to be reestablished. |. She thought the process took three (3) to four (4) weeks. m. When asked for a date when the process of reapplication started, she did not remember, but then stated an e-mail went out on August 5, 2013. n. When asked if the resident was the only one that fit the transfer criteria, she stated that there were others but resident number one (1) was the only one not receiving Skilled Services. o. When asked if there were plans to admit other residents to the facility, the social worker stated “no.” p. When asked what the facility transfer benefit to the resident was, the social worker stated she did not know. 22. That “Skilled Services” is a Medicare term used to define a specific group of medically necessary therapies that include physical therapy, occupational therapy, and speech therapy. 23. That Petitioner’s representative noted in the medical records of resident number one (1) a physician’s telephone order dated August 6, 2013 at 10:56 A.M., the day the resident was admitted to the facility, directing to discontinue physical therapy services, a skilled service. It was signed by an unknown provider. 24. That Petitioner’s representative reviewed a form provided to the surveyors and a copy of an email dated August 5, 2013, and noted as follows: a. 25. The email dated August 13, 2013 at 11:26 A.M. from an Adult Economic Services worker to the social worker stated to send encrypted emails only and contained an attached file and a link to access accounts. At the bottom of the printed email is another email dated August 5, 2013 from this social worker inquiring about the status of resident number one (1). A second page, stapled to the email trail, is a “Provider Inquiry Sheet”. Under client name, the entry included the first name and last initial of resident number one (1). The column titled “Main Inquiry Reason” contained and entry stating "Coverage Inquiry/SOC amount." The column titled "Provider Question" stated “The Business office has notified me that [resident number one (1)’s] coverage will end on July 31, 2013. Please advise why and if we can reapply for [gender pronoun] (not the gender of resident number one [1]) ICP Benefits [as] is Long Term Care resident requires custodial care.” The far right hand column stated “Please reapply as we didn’t get a recent financial release form within 60 days from the date of application (5/6/13).” That Petitioner’s representative telephonically interviewed the adult child of, and also the power of attorney for, resident number one (1) on August 13, 2013 at 1:05 P.M. and noted as follows: a. The adult child stated “nothing was said” about the billing during the transfer process from the resident’s prior facility. b. The adult child stated twice that the child had no concerns with care at the prior facility. c. The resident had no medical conditions that required a private room, and was in a three bed ward at the prior facility. d. The adult child was approached at the prior facility by the social worker, the same one that is at this facility, and asked about moving the resident to this facility. e. The adult child was told the resident would receive one-on-one staffing care, a private room, and was told the resident was the “only one there.” f. The adult child expected the resident to be in this facility “about one month” and then would go back to the prior facility. g. The resident was “in [] own world” (mentally) and went “up and down the halls” in the prior facility. h. The adult child was asked to bring in some documents today, August 13, 2013, for the Medicaid application. i. The adult child thought that the child had faxed in something a few months ago to the other facility and did not have any other information. j. There was no financial arrangement with this facility and the adult child was not expecting a bill. k. The facility asked for Social Security information today and the adult child was looking for it. 26. The adult child confirmed that the resident did not need a private room medically and was “just old,” about to turn 90 years old. . The adult child did not know if the resident had a different physician. The adult child did not know why the Medicaid was discontinued at the prior facility, had no Medicaid phone number, no workers name, and was unfamiliar with how to contact them. That Petitioner’s representative further reviewed Respondent’s records related to resident number one (1) during the survey and noted as follows: 27, a. b. The resident had a consent to treat form, dated August 6, 2013 at 11:45 am. Verbal permission was given by telephone from the resident’s adult child/ power of attorney. A “Do Not Resuscitate” form was dated November 27, 2012. A Statement of Incapacity was dated March 28, 2012. Power of attorney paperwork listed the adult child. A physician’s telephone order dated August 6, 2013 at 10:56 a.m., the day of the transfer, stated to discontinue Physical Therapy. There was no further information regarding why the resident was receiving these services. A telephone order dated August 8, 2013, stated to discontinue a Wanderguard that had been used related to elopement risk. There were no further details as to whether the elopement behaviors continued. An unsigned copy of the new physician’s orders was in the chart dated August 6, 2013 That the long term care unit, where resident number one (1) currently resided, was as follows: a. Two of the three hallways had rooms dark, doors closed, and hallway lights dimmed. b. Other areas of the facility, a large single story building with 179 beds, had darkened, cavernous hallways, and a rehabilitation dining area between two long term care units was dark, and contained plastic covered equipment on the tables. c. The building was clearly empty, other than this one resident and the three staff members on the unit for the resident in room 111. 28. ‘That later in the day on August 13, 2013, Respondent’s director of nursing stated that the new physician had not visited the resident at this facility; the physician at the prior facility did not come to this facility; and therefore the resident had to change physicians. 29. That on or about August 13, 2013, Petitioner’s representative reviewed a physician’s progress note, dated August 1, 2012, which revealed that resident number one qd) was unable to participate in the MMSE screening tool as the resident’s dementia was too far advanced 30. That Petitioner’s representative interviewed Respondent’s director of nursing and nursing home administrator regarding resident number one (1) on August 13, 2013 at 2:26 P.M. and noted as follows: a. When asked how the resident came to be admitted the facility, the administrator stated the last resident was discharged under Agency oversight on August 2, 2013, and she was on her way back to the corporate office when she received a call from corporate counsel that the facility could accept private pay residents. b. The administrator was notified that the facility would be accepting a private pay resident on August 5, 2013 from a sister facility. 31. The administrator indicated the resident had lost Medicaid and was moved to Medicaid pending as the family had not provided paperwork on time. . The administrator indicated that the corporation had the idea that as it litigated the license for this facility, it could assist this family with long term care costs, and assist this facility while it litigated its license. When asked if it was the facility's intention to have only one resident, the administrator stated that it would like to admit more, but it “took the one resident.” When asked if she felt it was an advantage to the facility during litigation to have a resident at the facility, the administrator shrugged and stated that she did not know. When asked if this facility was recruiting residents from external sources such as hospitals, the administrator stated “no.” When asked about the financial arrangements with the resident, the administrator they were preventing the resident’s discharge or the family incurring large debt. The administrator indicated that the charitable policy was not offered to other residents at the sister facility because they were able to fill the beds. The resident would have received a 30 day notice had the resident had stayed in the sister facility. . When asked if the administrator was aware if the sister facility provided services in a timely manner to maintain the resident’s Medicaid eligibility, the administrator stated that she was not aware of the responsibility of the sister facility staff related to the process. That Petitioner’s representative telephonically interviewed the physician of 12 resident number one (1) on August 13, 2013 at 2:45 P.M. and noted as follows: 32. a. b. He had not visited the resident since the resident’s admission on August 6, 2013. He made rounds on Wednesday and intended to see the resident on August 14, 2013. He was aware that the physician’s orders were not signed yet. The physician stated that the advanced registered nurse practitioner had seen the resident on an unknown date and they were trying to locate a progress note. That there was no note in the medical record of resident number one (1) which would indicate that the resident had been seen in this facility by either a Physician or a Nurse Practitioner. 33. That Petitioner’s representative observed resident number one (1) on August 13, 2013 commencing at 2:40 P.M. and noted as follows: 34, a. The resident was in the hallway of the resident’s room, near the dining room, scooting the wheelchair with feet. The resident was using the hand rail on the left side to assist. An aide was nearby. The resident was confused with a vacant look to the face and eyes and did not respond to the surveyor's questions. The resident was unable, due to confusion, to express any anxiety, a diagnosed disorder, anguish, or satisfaction that the resident felt related to the new surroundings, new staff, and isolation due to the lack of any peers nearby. That on or about August 16, 2013, the Agency received and reviewed an eighty- six (86) page faxed document from Respondent and noted that page thirty-nine (39) was from a Multiple Data Set document, dated August 14, 2013, which stated “Factors that can Exacerbate Behavior” that contained four items checked: "Sleep Disturbances; Frustration due to problem communicating discomfort or unmet needs; Frustration, agitation R/T (related to) needs to urinate or have BM; Recent change, such as new admission, new unit, new care staff, withdrawal from a treatment program; and need for repositioning". 35. Since the resident had been moved to a new facility, had new caregivers, new surroundings, and a new physician, any of these factors could contribute to an unexpected decline. 36. That the above reflects Respondent’s failure to ensure resident rights to dignity where, inter alia, Respondent failed to respect the right to a dignified transfer process and a dignified quality of life for one of the residents currently residing in a facility with revoked Medicaid and Medicare certification including but not limited to the absent of socialization with peers, the failure to provide skilled services, the failure to ensure timely physician transfer and evaluation, the failure to note and address care and services related to new surroundings, staff, and withdrawn treatments. 37, That under Florida law, a Class I deficiency is a deficiency that the agency determines presents a situation in which immediate corrective action is necessary because the facility’s noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in a facility. The condition or practice constituting a class I violation shall be abated or eliminated immediately, unless a fixed period of time, as determined by the agency, is required for correction. § 400.23(8)(a), Fla. Stat. (2013). 38. That a class I deficiency is subject to a civil penalty of $10,000 for an isolated deficiency, $12,500 for a patterned deficiency, and $15,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine must be levied notwithstanding the correction of the deficiency. § 400.23(8)(a), Fla. Stat. (2013). 39. The Respondents actions or inactions constituted an isolated Class I violation. 40. The Agency cited the Respondent for a class I violation. WHEREFORE, the Agency seeks to impose an administrative fine in the amount of ten thousand dollars ($10,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(8)(a), Florida Statutes (2013). COUNT II 41. The Agency re-alleges and incorporates paragraphs one (1) through three (3), and Count I of this Complaint as if fully recited herein. 42. That Respondent has been cited with one (1) State Class I deficiency and therefore is subject to a six (6) month survey cycle for a period of two years and a survey fee of six thousand dollars ($6,000) pursuant to Section 400.19(3), Florida Statutes (2013). WHEREFORE, the Agency intends to impose a six (6) month survey cycle for a period of two years and impose a survey fee in the amount of six thousand dollars ($6,000.00) against Respondent, a skilled nursing facility in the State of Florida, pursuant to Section 400.19(3), Florida Statutes (2013). COUNT Il 43. The Agency re-alleges and incorporates paragraphs one (1) through five (5), and Count I as if fully set forth herein. 44. Based upon Respondent’s one (1) cited State Class I deficiency, it was not in substantial compliance at the time of the survey with criteria established under Part II of Florida Statute 400, or the rules adopted by the Agency, a violation subjecting it to assignment of a conditional licensure status under § 400.23(7)(a), Florida Statutes (2012). 1S WHEREFORE, the Agency intends to assign a conditional licensure status to Respondent, a skilled nursing facility in the State of Florida, pursuant to § 400.23(7), Florida Statutes (2013). CLAIM FOR RELIEF WHEREFORE, the Petitioner, State of Florida, Agency for Health Care Administration, seeks a final order that: 1. Makes findings of fact and conclusions of law in favor of the Agency. 2. Imposes the relief sought in the Administrative Complaint. Respectfully submitted on this / / day of October, 2013. ; a ff a Thomag/J/Walsh Il, Esquire Florida Bat No. 566365 Office of the General Counsel Agency for Health Care Administration 525 Mirror Lake Drive, 330G St. Petersburg, FL 33701 Telephone: (727) 552-1525 Facsimile: (727) 552-1440 walsht@myflorida.ahca.com DISPLAY OF LICENSE Pursuant to § 400.23(7)(e), Fla. Stat. (2012), Respondent shall post the most current license in a prominent place that is in clear and unobstructed public view, at or near, the place where residents are being admitted to the facility. Respondent is notified that it has a right to request an administrative hearing pursuant to Section 120.569, Florida Statutes. Respondent has the ri ght to retain, and be represented by an attorney in this matter. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the attention of: The Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Bldg #3, MS #3, Tallahassee, Fi Torida, 32308, (850) 412-3630. RESPONDENT IS FURTHER NOTIFIED THAT A REQUEST FOR HEARING MUST BE RECEIVED WITHIN 21 DAYS OF RECEIPT OF THIS COMPLAINT OR WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has be: ed by US. Certified Mail, Return Receipt No: 7013 0600 0001 6664 9133 on October / /__, 2013 to Counsel for Petitioner, Anna G. Small, Esq., Allen Deli, P.A., 202 South Rome Avenue, Tampa, Florida 33606. Thomas J. Walsh, Il, Esquire f ye Copies furnished to: Patricia R. Caufman, FOM 17 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: Senior Care Group, Inc. CASE NO. 2013010196 d/b/a Lakeshore Villas Health Care Center ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)__—S—I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28-106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) Thereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION LAKESHORE VILLAS HEALTH CARE CENTER, Petitioner, vs. STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. a STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent. Case No. 13-395PH AHCA No. 2013005471 ACHA No. 2013006461 ACHA No. 2013006462 EXHIBIT 2 STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS, SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, Respondent, STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, VS. ; SENIOR CARE GROUP, INC. d/b/a LAKESHORE VILLAS HEALTH CARE CENTER, — Respondent. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. SENIOR CARE GROUP, INC, d/b/a LAKESHORE VILLAS HEAL TH CARE CENTER, Respondent. SETTLEMENT AGREEMENT DOAH No. 14-248 ACHA No. 2013006534 DOAH No. 14-528 ACHA No. 2013007612 DOAH No. 14-521 ACHA No. 2013010196 State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its undersigned representatives, and Senior Care Group, Inc. d/b/a Lakeshore Villas Health Care Center (hereinafter “Lakeshore”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, Lakeshore is a nursing home licensed pursuant to Chapters 400, Part II, and 408, Part II, Florida Statutes, Section 20.42, Florida Statutes and Chapter 59A-4, Florida Administrative Code; and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Lakeshore, pursuant to Chapters 400, Part II, and 408, Part II, Florida Statutes; and WHEREAS, the Agency served Lakeshore with a Notice of Intent to Deny dated May 22, 2013, in Agency case number 2013005471, notifying Lakeshore of the Agency's intent to deny the application for renewal of licensure for Lakeshore; and WHEREAS, the Agency completed a survey of Lakeshore and its Facility on or about April 12, 2013, (hereinafter “April Survey”), during which deficient practice was cited; and WHERMUAS the citation of the above referenced deficient practice subject Lakeshore to the imposition of administrative sanctions of one thousand dollars ($1,000.00) and the imposition of conditional licensure commencing April 12, 2013, in Case Number 2013006461; and WHEREAS, the Agency completed a survey of Lakeshore and its Facility on or about June 4, 2013, (hereinafter “June Survey”), during which deficient practice was cited; and WHEREAS the citation of the above referenced deficient practice subject Lakeshore to the imposition of administrative sanctions of one thousand dollars ($1,000.00) and the continued imposition of conditional licensure in Case Number 2013006462; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about July 26, 2013, in Agency case number 2013006534, notifying Lakeshore of the Agency’s intent to impose administrative sanctions of two thousand five hundred dollars ($2,500.00) and the continued imposition of conditional licensure; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about August 9; 2013, in Agency case number 2013007612, notifying Lakeshore of the Agency's intent to impose administrative sanctions of five thousand dollars ($5,000.00) and the continued imposition of conditional licensure; and WHEREAS, the Agency served Lakeshore with an administrative complaint on or about October 16, 2013, in Agency case number 2013010196, notifying Lakeshore of the Agency’s intent to impose administrative sanctions of ten thousand dollars ($10,000.00), the imposition of a six-month survey cycle and its six thousand dollar ($6,000.00) fee, and the continued imposition of conditional licensure; and WHEREAS, Lakeshore requested a formal administrative proceedings by selecting Option “3” on the Election of Rights form or by the filing of a Petition in Case Numbers 2013005471, 2013006534, 2013007612, and 2013010196; and WHEREAS, the parties have negotiated and agreed that the best interest of all the parties will be served by a settlement of this proceeding; and WHEREAS, Lakeshore has sought inactive licensure for its license, license number 1282096; and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: 1, All recitals herein ave true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Upon full execution of this Agreement, Lakeshore agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited {o, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120,57(1), Florida Statutes, appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court of competent jurisdiction; and agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which they may be entitled, provided, however, that no agreement herein shall be deemed a waiver by the parties of their right to judicial enforcement of this Agreement. Lakeshore specifically waives the necessity of the drafting of or service of an Administrative Complaint(s) for the relief stipulated to in this Agreement as the same relates to the April Survey and June Survey. 4. Upon full execution of this Agreement, the parties agree as follows: a. Lakeshore shall pay nineteen thousand five hundred dollars ($19,500.00) in administrative fines and a survey fee of six thousand dollars ($6,000.00), for a total monetary assessment of twenty-five thousand five hundred dollars ($25,500.00) to the Agency within thirty (30) days of the entry of the Final Order. Respondent also accepts the imposition of a six-month survey cycle and conditional licensure status commencing April 12, 2013. b. Lakeshore shall ensure that, on or before October [, 2014, an independent purchaser not affiliated with Lakeshore shall file a “Change of Ownership” application seeking the licensure currently held by Lakeshore. Lakeshore shall ensure any such applicant possess, at a minimum, the following qualifications: i. The applicant, or a controlling interest’ of the applicant, shall have been licensed, or be a controlling interest in an entity or entities which has been licensed, to operate a nursing home in the State of Florida pursuant to the provisions of Chapters 400, Part II, and 408, Part II, Florida Statutes, and Chapter 59A-4, Florida Administrative Code, for a continuous period of at least three (3) years prior to the filing of the application. ii. The nursing home or nursing homes of the applicant, or the nursing home or nursing homes in which the controlling interest of applicant are licensed as nursing home(s) or in which the controlling interest of applicant holds a - controlling interest in the licensed nursing home(s), shall not have been subject to a Class | or a widespread Class II deficient practice” within a three (3) year period predating the filing of the application for “Change of Ownership” licensure. c. Effective at 5:00 p.m., December 31, 2014, the nursing home license of Lakeshore, license number 1282096, shall be deemed relinquished and cancelled, unless the Agency has issued a "Change of Ownership” license to another person or entity to operate the facility. This date may be extended in the sole discretion of the Agency. Absent such extension, the licensure of Lakeshore shall be deemed relinquished and ‘ “Controlling Interest,” as utilized herein, means as defined in Section 408.803(5), Florida Statutes (2013). 2 “Patterned and widespread Class 1 and Class Il deficient practices” are defined in Section 400,23(8), Florida Statutes (2013). cancelled without regard to the'status, substantive or legal, of any pending licensure application related to the license currently held by Lakeshore, 5. Venue for any action brought to enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie in Circuit Court in Leon County, Florida. 6. By executing this Agreement, Lakeshore denies, and the Agency asserts the validity of the allegations raised in the administrative complaints and the Surveys referenced herein. No agreement made herein shall preclude the Agency from imposing a penalty against Lakeshore for any deficiency/violation of statute or rule identified in a future survey of Lakeshore, pursuant to the provisions of Chapters 400, Part II, 408, Part II, Florida Statutes, and Chapter S9A-4, Florida Administrative Code. In said event, Lakeshore retains the right to challenge the factual allegations related to the deficient practices/ violations alleged in the instant cause. 7. Lakeshore acknowledges and agrees that this Agreement shall not preclude or estop any other federal, state, or local agency or office fiom pursuing any cause of action or taking any action, even if based on or arising from, in whole or in part, the facts raised in the administrative complaints or Surveys, This agreement does not prohibit the Agency from taking action regarding Lakeshore’s Medicaid provider status, conditions, requirements or contract. 8. Upon full execution of this Agreement, the Agency shail enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled cases, 9. Each party shall bear its own costs and attorney’s fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. Lakeshore for itself and for Lakeshore’s related or resulting organizations, successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the State of Florida, Agency for Health Care Administration, and its agents, representatives, and attorneys of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative foram, including any claims arising out of this agreement, by or on behalf of Lakeshore or related facilities. 12. This Agreement is binding upon all parties herein and those identified in paragraph eleven (11) of this Agreement. 13. In the event that Lakeshore was a Medicaid provider at the subject time of the occurrences alleged in the complaint herein, this settlement does not prevent the Agency from secking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule 59G-9,.070, Florida Administrative Code. 14, Lakeshore agrees that if any funds to be paid under this agreement to the Agency are not paid within thirty-one (31) days of entry of the Final Order in this matter, the Agency may deduct the amounts assessed against Lakeshore in the Final Order, or any portion thereof, owed by Lakeshore to the Agency from any present or future funds owed to Lakeshore by the Agency, and that the Agency shall hold a lien against present and future funds owed to Lakeshore by the Agency for said amounts until paid. 15. The undersigned have read and understand this Agreement and have the authority to bind their respective principals to it. 16. This Agreement contains and incorporates the entire understandings and agreements of the parties, 17, This Agreement supersedes any prior oral or written agreements between the parties, 18. This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 19. All parties agree that a facsimile signature suffices for an original signature. The following representatives hereby acknowledge that they are duly authorized to enter into this Agreement, Health Quality Assurance Agency for Health Care Administration 2727 Mahan Drive, Building #1 Tallahassee, Florida 32308 DATED: 3 [vs Im F, Williams, General Counsel Office of the General Counsel Agency for Health Care Administration 2727 Mahan Drive, MS 43 Tallahassee, Florida 32308 Florida Bar No, 670731 DATED: 2G Anna Small, Esquire Allen Dell Counsel for Respondent 202 South Rome Avemue, Suite 100 Tampa, FL 33606 Florida Bar No. 17064 DATED: x04 Title: Name: Katherine idle 7s) Senior Care Group, Inc. DATED: _.3//i fl ¢ 4 7 y ff Thomas J. Walsh IJ, Senior Attorney Office of the General Counsel Agency for Health Care Administration 525 Mirror Lake Drive North, Suite 330G St. Petersburg, Florida 33701 Florida Bar No. 566365 DATED: 5//Z, 7 !
Conclusions THIS CAUSE came before the Agency for Health Care Administration (“the Agency") concerning the denial of Certificate of Need (“CON”) Application No. 10187 submitted by Naples HMA, LLC d/b/a Physicians Regional Medical Center-Collier to establish a 17-bed comprehensive medical rehabilitation unit in District 8, Collier County. 1. On June 7, 2013, the Agency published its decision denying CON Application 10187 submitted by Naples HMA, LLC d/b/a Physicians Regional Medical Center-Collier (“Physicians Regional”) to establish a 17-bed comprehensive medical rehabilitation unit in District 8, Collier County. 2. On June 7, 2013, the Agency published its decision denying CON Application 10188 submitted by Venice HMA, LLC d/b/a Venice Regional Medical Center (“Venice Regional”) to establish a 22-bed comprehensive medical rehabilitation unit in District 8, Sarasota County. 3. On June 28, 2013, Physicians Regional filed a petition for formal administrative hearing challenging the Agency’s denial of CON Application No. 10187. 4. On June 28, 2013, Venice Regional filed a petition for formal administrative hearing challenging the Agency’s denial of CON Application No. 10188. 5. The petitions for formal administrative hearing were referred to the Division of Administrative Hearings (“DOAH”). 6. Pursuant to the order of the Administrative Law Judge, the above-named intervenors were permitted to intervene in their respective actions and the matters were consolidated. 7. On July 7, 2014, Physicians Regional filed a Notice of Voluntary Dismissal. 8. On July 7, 2014, Venice filed a Notice of Voluntary Dismissal. It is therefore ORDERED: 1. The denial of Physicians Regional’s CON Application No. 10187 is upheld. 2. The denial of Venice Regional’s CON Application No. 10188 is upheld. ORDERED in Tallahassee, Florida, on this 4 __ day of ‘uly 2014, Quand l gud fy ElizaMeth Dudek, Secretary / Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE 1 CERTIFY that a true and correct of this Final Onder was served on the below-named persons by the method designated on this 77 day of ee , 2014. Richard J. Shoop, Agency lerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 412-3630 James H. Peterson, III Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Karen A. Putnal, Esquire Robert A. Weiss, Esquire Moyle Law Firm, P.A. 118 N. Gadsden Street Tallahassee, Florida 32301 Kputnal@moylelaw.com Rweiss@moylelaw.com (Electronic Mail) Lorraine M. Novak, Esquire Office of the General Counsel Agency for Health Care Administration (Electronic Mail) R. Terry Rigsby, Esquire Brian A. Newman, Esquire Pennington, P.A. 215 South Monroe Street, Second Floor Tallahassee, Florida 32301 Trigsby@penningtonlaw.com Brian@penningtonlaw.com (Electronic Mail) 3 James McLemore, Supervisor Certificate of Need Unit Agency for Health Care Administration (Electronic Mail) Marisol Fitch Health Services & Facilities Consultant Certificate of Need Unit Agency for Health Care Administration (Electronic Mail) Susan C. Smith, Esquire Corinne T. Porcher, Esquire Geoffrey D. Smith, Esquire Smith and Associates 3301 Thomasville Road, Suite 201 Tallahassee, FL 32308 Susan‘@smithlawtlh.com Corinne@smithlawtlh.com Geoff@smithlawtlh.com (Electronic Mail) Sabrina B. Dieguez, Esquire Smith & Associates 1499 S. Harbor City Blvd., Suite 202 Melbourne, Florida 32091 Sabrina@smithlawtlh.com (Electronic Mail)
Findings Of Fact At all times relevant hereto Daniel Francis Sanchez was licensed as a physician by the Florida Board of Medical Examiners having been issued license number ME0038795. At all times relevant hereto Respondent was Regional Medical Director of IMC which operated HMO offices in Hillsborough and Pinellas Counties. On October 17, 1985, Alexander Stroganow, an 84 year old Russian immigrant and former cossack, who spoke and understood only what English he wanted to, suffered a fall and was taken to the emergency room at Metropolitan General Hospital. He was checked and released without being admitted for inpatient treatment. Later that evening his landlady thought Stroganow needed medical attention and again called the Emergency Medical Service. The ambulance with EMS personnel arrived and concluded Stroganow was no worse than earlier when taken to the emergency room and they refused to transport him again to the hospital. The landlady then called the HRS hotline to report abuse of the elderly. The following morning, October 18, 1985, an HRS case worker was dispatched to the place where Stroganow lived. She was let in by the landlady and found an 84 year old man who was incontinent, incoherent, apparently paralyzed from the waist down, with whom she could not carry on a conversation to find out what condition he was in. She called for a Cares Unit to come and evaluate the client. An HRS Cares Unit is a two person team consisting of a social worker and nurse whose primary function is to screen clients for admission to nursing homes and adult congregate living facilities (ACLF). The nurse on the team carries no medical equipment such as a stethoscope, blood pressure cuff, or thermometer, but makes her determination on visual examination only. Upon arrival of the Cares Unit both members felt Stroganow needed to be placed where he could be attended. A review of his personal effects produced by his landlady showed his income to be over the maximum for which he could qualify for medicaid placement in a nursing home; that he was a member of IMC's Gold- Plus HMO; his social security card; and several medications, some of which had been prescribed by Dr. Dayton, a physician employed by IMC at the South Pasadena Clinic. The Cares team ruled out ACLF placement for Stroganow at the time because he was not ambulatory but felt he needed to be placed where he could be attended to and not left alone over the coming weekend. To accomplish this, they proceeded to the South Pasadena HMO clinic of IMC to lay the problem on Dr. Dayton, the Assistant Medical Director for IMC in charge of the South Pasadena Clinic. Stroganow had been a client of the South Pasadena HMO for some time and was well known at the clinic and by EMS personnel. There were two and sometimes three doctors who treated patients at this clinic and, unless the patient requested a specific doctor, he was treated by the first doctor available. Stroganow had not specifically requested he be treated by Dr. Dayton. When the Cares team met with Dr. Dayton they advised him that Stroganow had been taken to Metropolitan General Hospital Emergency Room the night before but did not advise Dayton that the EMS team had refused to transport Stroganow to the hospital emergency room a second time the previous evening. Dayton telephoned the emergency room at Metropolitan General to ascertain the medical condition of Stroganow when brought in the evening before. With the information provided by the Cares team and the hospital, Dayton concluded that Stroganow should be given a medical evaluation and the quickest way for that to occur was to call the EMS and have Stroganow taken to an emergency room for evaluation. When the Cares team arrived, Dayton was treating patients at the clinic. A doctor's office, or clinic, is not a desirable place to have an incontinent, incoherent, non- ambulatory patient brought to wait with other patients until a doctor is free to see him. Nor is the clinic equipped to do certain procedures frequently needed in diagnosing the illness and determining treatment needed for an acutely ill patient. EMS squads usually arrive within minutes of a call to 911 for emergency medical assistance and it was necessary for someone to be with Stroganow with the EMS squad arrived. Accordingly, Dayton suggested that the Cares team return to Stroganow and call 911 for assistance in obtaining a medical evaluation of Stroganow. If called from the HMO office, the EMS squad would have arrived long before the Cares team could have gotten back to Stroganow. Dr. Dayton did not have admitting privileges at any hospital in Pinellas County at this time. Upon leaving the South Pasadena HMO clinic, the Cares team returned to Stroganow. Enroute, they stopped to call a supervisor at HRS to report that the HMO had not solved their problem. The supervisor then called the Administrator at IMC to tell them that one of their Gold-Plus patients had an emergency situation. Respondent, Dr. Sanchez, called and advised that Dr. Dayton would take care of the problem. Later, around 2:00 p.m. when no ambulance had arrived, the Cares team called 911 from a telephone a block away from Stroganow's residence and arrived back just before the emergency squad. The EMS squad again refused to transport Stroganow to an emergency room and this information was passed back to Sanchez who directed that Stroganow be taken to Lake Seminole Hospital. This was the first time either Dayton or Sanchez was aware that the EMS squad had refused to transport Stroganow to an emergency room. Although Sanchez did not have admitting privileges at Lake Seminole Hospital, IMC had a contractual agreement with Lake Seminole which provided that certain staff doctors at Lake Seminole would admit patients referred to Lake Seminole by IMC. Pursuant to this contractual arrangement, Stroganow was admitted to Lake Seminole Hospital where he was treated for his injuries and evaluated for his future medical needs.
The Issue Whether the certificate of need (CON) applications filed by New Port Richey Hospital, Inc., d/b/a Community Hospital of New Port Richey (Community Hospital) (CON No. 9539), and Morton Plant Hospital Association, Inc., d/b/a North Bay Hospital (North Bay) (CON No. 9538), each seeking to replace and relocate their respective general acute care hospital, satisfy, on balance, the applicable statutory and rule criteria.
Findings Of Fact The Parties AHCA AHCA is the single state agency responsible for the administration of the CON program in Florida pursuant to Chapter 408, Florida Statutes (2000). The agency separately reviewed and preliminarily approved both applications. Community Hospital Community Hospital is a 300,000 square feet, accredited hospital with 345 licensed acute care beds and 56 licensed adult psychiatric beds, located in southern New Port Richey, Florida, within Sub-District 5-1. Community Hospital is seeking to construct a replacement facility approximately five miles to the southeast within a rapidly developing suburb known as "Trinity." Community Hospital currently provides a wide array of comprehensive inpatient and outpatient services and is the only provider of obstetrical and adult psychiatric services in Sub-District 5-1. It is the largest provider of emergency services in Pasco County with approximately 35,000 visits annually. It is also the largest provider of Medicaid and indigent patient days in Sub-District 5-1. Community Hospital was originally built in 1969 and is an aging facility. Although it has been renovated over time, the hospital is in poor condition. Community Hospital's average daily census is below 50 percent. North Bay North Bay is a 122-bed facility containing 102 licensed acute care beds and 20 licensed comprehensive medical rehabilitation beds, located approximately one mile north of Community Hospital in Sub-District 5-1. It serves a large elderly population and does not provide pediatric or obstetrical care. North Bay is also an aging facility and proposes to construct a replacement facility in the Trinity area. Notably, however, North Bay has spent approximately 12 million dollars over the past three years for physical improvements and is in reasonable physical condition. Helen Ellis Helen Ellis is an accredited hospital with 150 licensed acute care beds and 18 licensed skilled nursing unit beds. It is located in northern Pinellas County, approximately eight miles south of Community Hospital and nine miles south of North Bay. Helen Ellis provides a full array of acute care services including obstetrics and cardiac catheterization. Its daily census average has fluctuated over the years but is approximately 45 percent. Mease Mease operates two acute care hospitals in Pinellas County including Mease Dunedin Hospital, located approximately 18 to 20 miles south of the applicants and Mease Countryside Hospital, located approximately 16 to 18 miles south of Community and North Bay. Each hospital operates 189 licensed beds. The Mease hospitals are located in the adjacent acute care sub-district but compete with the applicants. The Health Planning District AHCA's Health Planning District 5 consists of Pinellas and Pasco Counties. U.S. Highway 41 runs north and south through the District and splits Pasco County into Sub- District 5-1 and Sub-District 5-2. Sub-District 5-1, where Community Hospital and North Bay are located, extends from U.S. 41 west to the Gulf Coast. Sub-District 5-2 extends from U.S. 41 to the eastern edge of Pasco County. Pinellas County is the most densely populated county in Florida and steadily grows at 5.52 percent per year. On the other hand, its neighbor to the north, Pasco County, has been experiencing over 15 percent annual growth in population. The evidence demonstrates that the area known as Trinity, located four to five miles southeast of New Port Richey, is largely responsible for the growth. With its large, single- owner land tracts, Trinity has become the area's fuel for growth, while New Port Richey, the older coastal anchor which houses the applicants' facilities, remains static. In addition to the available land in Trinity, roadway development in the southwest section of Pasco County is further fueling growth. For example, the Suncoast Highway, a major highway, was recently extended north from Hillsborough County through Sub-District 5-1, west of U.S. 41. It intersects with several large east-west thoroughfares including State Road 54, providing easy highway access to the Tampa area. The General Proposals Community Hospital's Proposal Community Hospital's CON application proposes to replace its existing, 401-bed hospital with a 376-bed state- of-the-art facility and relocate it approximately five miles to the southeast in the Trinity area. Community Hospital intends to construct a large medical office adjacent to its new facility and provide all of its current services including obstetrical care. It does not intend to change its primary service area. North Bay's Proposal North Bay's CON application proposes to replace its existing hospital with a 122-bed state-of-the-art facility and also plans to relocate it approximately eight miles to the southeast in the Trinity area of southwestern Pasco County. North Bay intends to provide the same array of services it currently offers its patients and will not provide pediatric and obstetrical care in the proposed facility. The proposed relocation site is adjacent to the Trinity Outpatient Center which is owned by North Bay's parent company, Morton Plant. The Outpatient Center offers a full range of diagnostic imaging services including nuclear medicine, cardiac nuclear stress testing, bone density scanning, CAT scanning, mammography, ultrasound, as well as many others. It also offers general and specialty ambulatory surgical services including urology; ear, nose and throat; ophthalmology; gastroenterology; endoscopy; and pain management. Approximately 14 physician offices are currently located at the Trinity Outpatient Center. The Condition of Community Hospital Facility Community Hospital's core facilities were constructed between 1969 and 1971. Additions to the hospital were made in 1973, 1975, 1976, 1977, 1979, 1981, 1992, and 1999. With an area of approximately 294,000 square feet and 401 licensed beds, or 733 square feet per bed, Community Hospital's gross area-to-bed ratio is approximately half of current hospital planning standards of 1,600 square feet per bed. With the exception of the "E" wing which was completed in 1999, all of the clinical and support departments are undersized. Medical-Surgical Beds And Intensive Care Units Community Hospital's "D" wing, constructed in 1975, is made up of two general medical-surgical unit floors which are grossly undersized. Each floor operates 47 general medical-surgical beds, 24 of which are in three-bed wards and 23 in semi-private rooms. None of the patient rooms in the "D" wing have showers or tubs so the patients bathe in a single facility located at the center of the wing on each floor. Community Hospital's "A" wing, added in 1973, is situated at the west end of the second floor and is also undersized. It too has a combination of semi-private rooms and three-bed wards without showers or tubs. Community Hospital's "F" wing, added in 1979, includes a medical-surgical unit on the second and third floor, each with semi-private and private rooms. The second floor unit is centrally located between a 56-bed adult psychiatric unit and the Surgical Intensive Care Unit (SICU) which creates security and privacy issues. The third floor unit is adjacent to the Medical Intensive Care Unit (MICU) which must be accessed through the medical-surgical unit. Neither intensive care unit (ICU) possesses an isolation area. Although the three-bed wards are generally restricted to in-season use, and not always full, they pose significant privacy, security, safety, and health concerns. They fail to meet minimum space requirements and are a serious health risk. The evidence demonstrates that reconfiguring the wards would be extremely costly and impractical due to code compliance issues. The wards hinder the hospital's acute care utilization, and impair its ability to effectively compete with other hospitals. Surgical Department and Recovery Community Hospital's surgical department is separated into two locations including the main surgical suite on the second floor and the Endoscopy/Pain Management unit located on the first floor of "C" wing. Consequently, the department cannot share support staff and space such as preparation and recovery. The main surgical suite, adjacent recovery room, and central sterile processing are 25 years old. This unit's operating rooms, cystoscopy rooms, storage areas, work- stations, central sterile, and recovery rooms are undersized and antiquated. The 12-bay Recovery Room has no patient toilet and is lacking storage. The soiled utility room is deficient. In addition, the patient bays are extremely narrow and separated by curtains. There is no direct connection to the sterile corridor, and staff must break the sterile field to transport patients from surgery to recovery. Moreover, surgery outpatients must pass through a major public lobby going to and returning from surgery. The Emergency Department Community Hospital's existing emergency department was constructed in 1992 and is the largest provider of hospital emergency services in Pasco County, handling approximately 35,000 visits per year. The hospital is also designated a "Baker Act" receiving facility under Chapter 394, Florida Statutes, and utilizes two secure examination rooms for emergent psychiatric patients. At less than 8,000 total square feet, the emergency department is severely undersized to meet the needs of its patients. The emergency department is currently undergoing renovation which will connect the triage area to the main emergency department. The renovation will not enlarge the entrance, waiting area, storage, nursing station, nor add privacy to the patient care areas in the emergency department. The renovation will not increase the total size of the emergency department, but in fact, the department's total bed availability will decrease by five beds. Similar to other departments, a more meaningful renovation cannot occur within the emergency department without triggering costly building code compliance measures. In addition to its space limitations, the emergency department is awkwardly located. In 1992, the emergency department was relocated to the front of the hospital and is completely separated from the diagnostic imaging department which remained in the original 1971 building. Consequently, emergency patients are routinely transported across the hospital for imaging and CT scans. Issues Relating to Replacement of Community Hospital Although physically possible, renovating and expanding Community Hospital's existing facility is unreasonable. First, it is cost prohibitive. Any significant renovation to the 1971, 1975, 1977, and 1979 structures would require asbestos abatement prior to construction, at an estimated cost of $1,000,000. In addition, as previously noted, the hospital will be saddled with the major expense of complying with all current building code requirements in the 40-year-old facility. Merely installing showers in patient rooms would immediately trigger a host of expensive, albeit necessary, code requirements involving access, wiring, square footage, fireproofing columns and beams, as well as floor/ceiling and roof/ceiling assemblies. Concurrent with the significant demolition and construction costs, the hospital will experience the incalculable expense and loss of revenue related to closing major portions, if not all, of the hospital. Second, renovation and expansion to the existing facility is an unreasonable option due to its physical restrictions. The 12'4" height of the hospital's first floor limits its ability to accommodate HVAC ductwork large enough to meet current ventilation requirements. In addition, there is inadequate space to expand any department within the confines of the existing hospital without cannibalizing adjacent areas, and vertical expansion is not an option. Community Hospital's application includes a lengthy Facility Condition Assessment which factually details the architectural, mechanical, and electrical deficiencies of the hospital's existing physical plant. The assessment is accurate and reasonable. Community Hospital's Proposed Replacement Community Hospital proposes to construct a six- story, 320 licensed beds, acute care replacement facility. The hospital will consist of 548,995 gross square feet and include a 56-bed adult psychiatric unit connected by a hallway to the first floor of the main hospital building. The proposal also includes the construction of an adjacent medical office building to centralize the outpatient offices and staff physicians. The evidence establishes that the deficiencies inherent in Community Hospital's existing hospital will be cured by its replacement hospital. All patients will be provided large private rooms. The emergency department will double in size, and contain private examination rooms. All building code requirements will be met or exceeded. Patients and staff will have separate elevators from the public. In addition, the surgical department will have large operating rooms, and adequate storage. The MICU and SICU will be adjacent to each other on the second floor to avoid unnecessary traffic within the hospital. Surgical patients will be transported to the ICU via a private elevator dedicated to that purpose. Medical-surgical patient rooms will be efficiently located on the third through sixth floors, in "double-T" configuration. Community Hospital's Existing and Proposed Sites Community Hospital is currently located on a 23-acre site inside the southern boundary of New Port Richey. Single- family homes and offices occupy the two-lane residential streets that surround the site on all sides. The hospital buildings are situated on the northern half of the site, with the main parking lot located to the south, in front of the main entrance to the hospital. Marine Parkway cuts through the southern half of the site from the west, and enters the main parking lot. A private medical mall sits immediately to the west of the main parking lot and a one-acre storm-water retention pond sits to the west of the mall. A private medical office building occupies the south end of the main parking lot and a four-acre drainage easement is located in the southwest corner of the site. Community Hospital's administration has actively analyzed its existing site, aging facility, and adjacent areas. It has commissioned studies by civil engineers, health care consultants, and architects. The collective evidence demonstrates that, although on-site relocation is potentially an option, on balance, it is not a reasonable option. Replacing Community Hospital on its existing site is not practical for several reasons. First, the hospital will experience significant disruption and may be required to completely close down for a period of time. Second, the site's southwestern large four-acre parcel is necessary for storm-water retention and is unavailable for expansion. Third, a reliable cost differential is unknown given Community Hospital's inability to successfully negotiate with the city and owners of the adjacent medical office complexes to acquire additional parcels. Fourth, acquiring other adjacent properties is not a viable option since they consist of individually owned residential lots. In addition to the site's physical restrictions, the site is hindered by its location. The hospital is situated in a neighborhood between small streets and a local school. From the north and south, motorists utilize either U.S. 19, a congested corridor that accommodates approximately 50,000 vehicles per day, or Grand and Madison Streets, two-lane streets within a school zone. From the east and west, motorists utilize similar two-lane neighborhood streets including Marine Parkway, which often floods in heavy rains. Community Hospital's proposed site, on the other hand, is a 53-acre tract positioned five miles from its current facility, at the intersection of two major thoroughfares in southwestern Pasco County. The proposed site offers ample space for all facilities, parking, outpatient care, and future expansion. In addition, Community Hospital's proposed site provides reasonable access to all patients within its existing primary service area made up of zip codes 34652, 34653, 34668, 34655, 34690, and 34691. For example, the average drive times from the population centers of each zip code to the existing site of the hospital and the proposed site are as follows: Zip code Difference Existing site Proposed site 34652 3 minutes 14 minutes 11 minutes 34653 8 minutes 11 minutes 3 minutes 34668 15 minutes 21 minutes 6 minutes 34655 11 minutes 4 minutes -7 minutes 34690 11 minutes 13 minutes 2 minutes 34691 11 minutes 17 minutes 6 minutes While the average drive time from the population centroids of zip codes 34653, 34668, 34690, and 34691 to the proposed site slightly increases, it decreases from the Trinity area, where population growth has been most significant in southwestern Pasco County. In addition, a motorist's average drive time from Community Hospital's existing location to its proposed site is only 10 to 11 minutes, and patients utilizing public transportation will be able to access the new hospital via a bus stop located adjacent to the proposed site. The Condition of North Bay Facility North Bay Hospital is also an aging facility. Its original structure and portions of its physical plant are approximately 30 years old. Portions of its major mechanical systems will soon require replacement including its boilers, air handlers, and chillers. In addition, the hospital is undersized and awkwardly configured. Despite its shortcomings, however, North Bay is generally in good condition. The hospital has been consistently renovated and updated over time and is aesthetically pleasing. Moreover, its second and third floors were added in 1986, are in good shape, and structurally capable of vertical expansion. Medical Surgical Beds and ICU Units By-in-large, North Bay is comprised of undersized, semi-private rooms containing toilet and shower facilities. The hospital does not have any three-bed wards. North Bay's first floor houses all ancillary and support services including lab, radiology, pharmacy, surgery, pre-op, post-anesthesia recovery, central sterile processing and supply, kitchen and cafeteria, housekeeping and administration, as well as the mechanical, electrical, and facilities maintenance and engineering. The first floor also contains a 20-bed CMR unit and a 15-bed acute care unit. North Bay's second and third floors are mostly comprised of semi-private rooms and supporting nursing stations. Although the rooms and stations are not ideally sized, they are in relatively good shape. North Bay utilizes a single ICU with ten critical care beds. The ICU rooms and nursing stations are also undersized. A four-bed ICU ward and former nursery are routinely used to serve overflow patients. Surgery Department and Recovery North Bay utilizes a single pre-operative surgical room for all of its surgery patients. The room accommodates up to five patient beds, but has limited space for storage and pre-operative procedures. Its operating rooms are sufficiently sized. While carts and large equipment are routinely stored in hallways throughout the surgical suite, North Bay has converted the former obstetrics recovery room to surgical storage and has made efficient use of other available space. North Bay operates a small six-bed Post Anesthesia Care Unit. Nurses routinely prepare patient medications in the unit which is often crowded with staff and patients. The Emergency Department North Bay has recently expanded its emergency department. The evidence demonstrates that this department is sufficient and meets current and future expected patient volumes. Replacement Issues Relating to North Bay While it is clear that areas of North Bay's physical plant are aging, the facility is in relatively good condition. It is apparent that North Bay must soon replace significant equipment, including cast-iron sewer pipes, plumbing, boilers, and chillers which will cause some interruption to hospital operations. However, North Bay's four-page written assessment of the facility and its argument citing the need for total replacement is, on balance, not persuasive. North Bay's Proposed Replacement North Bay proposes to construct a new, state-of-the- art, hospital approximately eight miles southeast of its existing facility and intends to offer the identical array of services the hospital currently provides. North Bay's Existing and Proposed Sites North Bay's existing hospital is located on an eight-acre site with limited storm-water drainage capacity. Consequently, much of its parking area is covered by deep, porous, gravel instead of asphalt. North Bay's existing site is generally surrounded by residential properties. While the city has committed, in writing, it willingness to assist both applicants with on-site expansion, it is unknown whether North Bay can acquire additional adjacent property. North Bay's proposed site is located at the intersection of Trinity Oaks Boulevard and Mitchell Boulevard, south of Community Hospital's proposed site, and is quite spacious. It contains sufficient land for the facilities, parking, and future growth, and has all necessary infrastructure in place, including utility systems, storm- water structures, and roadways. Currently however, there is no public transportation service available to North Bay's proposed site. Projected Utilization by Applicants The evidence presented at hearing indicates that, statewide, replacement hospitals often increase a provider's acute care bed utilization. For example, Bartow Memorial Hospital, Heart of Florida Regional Medical Center, Lake City Medical Center, Florida Hospital Heartland Medical Center, South Lake Hospital, and Florida Hospital-Fish Memorial each experienced significant increases in utilization following the opening of their new hospital. The applicants in this case each project an increase in utilization following the construction of their new facility. Specifically, Community Hospital's application projects 82,685 total hospital patient days (64,427 acute care patient days) in year one (2006) of the operation of its proposed replacement facility, and 86,201 total hospital patient days (67,648 acute care patient days) in year two (2007). Using projected 2006 and 2007 population estimates, applying 2002 acute care hospital use rates which are below 50 percent, and keeping Community Hospital's acute care market share constant at its 2002 level, it is reasonably estimated that Community Hospital's existing hospital will experience 52,623 acute care patient days in 2006, and 53,451 acute care patient days in 2007. Consequently, Community Hospital's proposed facility must attain 11,804 additional acute care patient days in 2006, and 14,197 more acute care patient days in 2007, in order to achieve its projected acute care utilization. Although Community Hospital lost eight percent of the acute care market in its service area between 1995 and 2002, two-thirds of that loss was due to residents of Sub- District 5-1 acquiring services in another area. While Community Hospital experienced 78,444 acute care patient days in 1995, it projects only 64,427 acute care patient days in year one. Given the new facility and population factors, it is reasonable that the hospital will recapture half of its lost acute care market share and achieve its projections. With respect to its psychiatric unit, Community Hospital projects 16,615 adult psychiatric inpatient days in year one (2006) and 17,069 adult inpatient days in year two (2007) of the proposed replacement hospital. The evidence indicates that these projections are reasonable. Similarly, North Bay's acute care utilization rate has been consistently below 50 percent. Since 1999, the hospital has experienced declining utilization. In its application, North Bay states that it achieved total actual acute care patient days of 21,925 in 2000 and 19,824 in 2001 and the evidence at hearing indicates that North Bay experienced 17,693 total acute care patient days in 2002. North Bay projects 25,909 acute care patient days in the first year of operation of its proposed replacement hospital, and 27,334 acute care patient days in the second year of operation. Despite each applicant's current facility utilization rate, Community Hospital must increase its current acute care patient days by 20 percent to reach its projected utilization, and North Bay must increase its patient days by at least 50 percent. Given the population trends, service mix and existing competition, the evidence demonstrates that it is not possible for both applicants to simultaneously achieve their projections. In fact, it is strongly noted that the applicants' own projections are predicated upon only one applicant being approved and cannot be supported with the approval of two facilities. Local Health Plan Preferences In its local health plan for District 5, the Suncoast Health Council, Inc., adopted acute care preferences in October, 2000. The replacement of an existing hospital is not specifically addressed by any of the preferences. However, certain acute care preferences and specialty care preferences are applicable. The first applicable preference provides that preference "shall be given to an applicant who proposes to locate a new facility in an area that will improve access for Medicaid and indigent patients." It is clear that the majority of Medicaid and indigent patients live closer to the existing hospitals. However, Community Hospital proposes to move 5.5 miles from its current location, whereas North Bay proposes to move eight miles from its current location. While the short distances alone are less than significant, North Bay's proposed location is further removed from New Port Richey, is not located on a major highway or bus-route, and would therefore be less accessible to the medically indigent residents. Community Hospital's proposed site will be accessible using public transportation. Furthermore, Community Hospital has consistently provided excellent service to the medically indigent and its proposal would better serve that population. In 2000, Community Hospital provided 7.4 percent of its total patient days to Medicaid patients and 0.8 percent of its total patient days to charity patients. Community Hospital provided the highest percentage and greatest number of Medicaid patient days in Sub-District 5-1. By comparison, North Bay provided 5.8 percent of its total patient days to Medicaid patients and 0.9 percent of its total patient days to charity patients. In 2002, North Bay's Medicaid patients days declined to 3.56 percent. Finally, given the closeness and available bed space of the existing providers and the increasing population in the Trinity area, access will be improved by Community Hospital's relocation. The second local health plan preference provides that "[i]n cases where an applicant is a corporation with previously awarded certificates of need, preference shall be given to those which follow through in a timely manner to construct and operate the additional facilities or beds and do not use them for later negotiations with other organizations seeking to enter or expand the number of beds they own or control." Both applicants meet this preference. The third local health plan preference recognizes "Certificate of Need applications that provide AHCA with documentation that they provide, or propose to provide, the largest percentage of Medicaid and charity care patient days in relation to other hospitals in the sub-district." Community Hospital provides the largest percentage of Medicaid and charity care patient days in relation to other hospitals in Sub-District 5-1, and therefore meets this preference. The fourth local health plan preference applies to "Certificate of Need applications that demonstrate intent to serve HIV/AIDS infected persons." Both applicants accept and treat HIV/AIDS infected persons, and would continue to do so in their proposed replacement hospitals. The fifth local health plan preference recognizes "Certificate of Need applications that commit to provide a full array of acute care services including medical-surgical, intensive care, pediatric, and obstetrical services within the sub-district for which they are applying." Community Hospital qualifies since it will continue to provide its current services, including obstetrical care and psychiatric care, in its proposed replacement hospital. North Bay discontinued its pediatric and obstetrical programs in 2001, does not intend to provide them in its proposed replacement hospital, and will not provide psychiatric care. Agency Rule Preferences Florida Administrative Code Rule 59C-1.038(6) provides an applicable preference to a facility proposing "new acute care services and capital expenditures" that has "a documented history of providing services to medically indigent patients or a commitment to do so." As the largest Medicaid provider in Sub-District 5-1, Community Hospital meets this preference better than does North Bay. North Bay's history demonstrates a declining rate of service to the medically indigent. Statutory Review Criteria Section 408.035(1), Florida Statutes: The need for the health care facilities and health services being proposed in relation to the applicable district health plan District 5 includes Pasco and Pinellas County. Pasco County is rapidly developing, whereas Pinellas County is the most densely populated county in Florida. Given the population trends, service mix, and utilization rates of the existing providers, on balance, there is a need for a replacement hospital in the Trinity area. Section 408.035(2), Florida Statutes: The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant Community Hospital and North Bay are both located in Sub-District 5-1. Each proposes to relocate to an area of southwestern Pasco County which is experiencing explosive population growth. The other general acute care hospital located in Sub-District 5-1 is Regional Medical Center Bayonet Point, which is located further north, in the Hudson area of western Pasco County. The only other acute care hospitals in Pasco County are East Pasco Medical Center, in Zephyrhills, and Pasco Community Hospital, in Dade City. Those hospitals are located in Sub-District 5-2, east Pasco County, far from the area proposed to be served by either Community Hospital or North Bay. District 5 includes Pinellas County as well as Pasco County. Helen Ellis and Mease are existing hospital providers located in Pinellas County. Helen Ellis has 168 licensed beds, consisting of 150 acute care beds and an 18-bed skilled nursing unit, and is located 7.9 miles from Community Hospital's existing location and 10.8 miles from Community Hospital's proposed location. Access to Helen Ellis for patients originating from southwestern Pasco County requires those patients to travel congested U.S. 19 south to Tarpon Springs. As a result, the average drive time from Community Hospital's existing and proposed site to Helen Ellis is approximately 22 minutes. Helen Ellis is not a reasonable alternative to Community Hospital's proposal. The applicants' proposals are specifically designed for the current and future health care needs of southwestern Pasco County. Given its financial history, it is unknown whether Helen Ellis will be financially capable of providing the necessary care to the residents of southwestern Pasco. Mease Countryside Hospital has 189 licensed acute care beds. It is located 16.0 miles from Community Hospital's existing location and 13.8 miles from Community Hospital's proposed location. The average drive time to Mease Countryside is 32 minutes from Community Hospital's existing site and 24 minutes from its proposed site. In addition, Mease Countryside Hospital has experienced extremely high utilization over the past several years, in excess of 90 percent for calendar years 2000 and 2001. Utilization at Mease Countryside Hospital has remained over 80 percent despite the addition of 45 acute care beds in April 2002. Given the growth and demand, it is unknown whether Mease can accommodate the residents in southwest Pasco County. Mease Dunedin Hospital has 189 licensed beds, consisting of 149 acute care beds, a 30-bed skilled nursing unit, five Level 2 neonatal intensive care beds, and five Level 3 neonatal intensive care beds. Its former 15-bed adult psychiatric unit has been converted into acute care beds. It is transferring its entire obstetrics program at Mease Dunedin Hospital to Mease Countryside Hospital. Mease Dunedin Hospital is located approximately 18 to 20 miles from the applicants' existing and proposed locations with an average drive time of 35-38 minutes. With their remote location, and the exceedingly high utilization at Mease Countryside Hospital, neither of the two Mease hospitals is a viable alternative to the applicants' proposals. In addition, the construction of a replacement hospital would positively impact economic development and further attract medical professionals to Sub-District 5-1. On balance, given the proximity, utilization, service array, and accessibility of the existing providers, including the applicants, the relocation of Community Hospital will enhance access to health care to the residents. Section 408.035(3), Florida Statutes: The ability of the applicant to provide quality of care and the applicant's record of providing quality of care As stipulated, both applicants provide excellent quality of care. However, Community Hospital's proposal will better enhance its ability to provide quality care. Community is currently undersized, non-compliant with today's standards, and located on a site that does not allow for reasonable expansion. Its emergency department is inadequate for patient volume, and the configuration of the first floor leads to inefficiencies in the diagnosis and treatment of emergency patients. Again, most inpatients are placed in semi-private rooms and three-bed wards, with no showers or tubs, little privacy, and an increased risk of infection. The hospital's waiting areas for families of patients are antiquated and undersized, its nursing stations are small and cramped and the operating rooms and storage facilities are undersized. Community Hospital's deficiencies will be effectively eliminated by its proposed replacement hospital. As a result, patients will experience qualitatively better care by the staff who serve them. Conversely, North Bay is in better physical condition and not in need of replacement. It has more reasonable options to expand or relocate its facility on site. Quality of care at North Bay will not be markedly enhanced by the construction of a new hospital. Sections 408.035(4)and(5), Florida Statutes, have been stipulated as not applicable in this case. Section 408.035(6), Florida Statutes: The availability of resources, including health personnel, management personnel, and funds available for capital and operating expenditures, for project accomplishment and operation The parties stipulated that both Community Hospital and North Bay have available health personnel and management personnel for project accomplishment and operation. In addition, the evidence proves that both applicants have sufficient funds for capital and operating expenditures. Community Hospital proposes to rely on its parent company to finance the project. Keith Giger, Vice-President of Finance for HCA, Inc., Community Hospital's parent organization, provided credible deposition testimony that HCA, Inc., will finance 100 percent of the total project cost by an inter-company loan at eight percent interest. Moreover, it is noted that the amount to be financed is actually $20 million less than the $196,849,328 stated in the CON Application, since Community Hospital previously purchased the proposed site in June 2003 with existing funds and does not need to finance the land acquisition. Community Hospital has sufficient working capital for operating expenditures of the proposed replacement hospital. North Bay, on the other hand, proposes to acquire financing from BayCare Obligated Group which includes Morton Plant Hospital Association, Inc.; Mease; and several other hospital entities. Its proposal, while feasible, is less certain since member hospitals must approve the indebtedness, thereby providing Mease with the ability to derail North Bay's proposed bond financing. Section 408.035(7), Florida Statutes: The extent to which the proposed services will enhance access to health care for residents of the service district The evidence proves that either proposal will enhance geographical access to the growing population in the service district. However, with its provision of obstetrical services, Community Hospital is better suited to address the needs of the younger community. With respect to financial access, both proposed relocation sites are slightly farther away from the higher elderly and indigent population centers. Since the evidence demonstrates that it is unreasonable to relocate both facilities away from the down-town area, Community Hospital's proposal, on balance, provides better access to poor patients. First, public transportation will be available to Community Hospital's site. Second, Community Hospital has an excellent record of providing care to the poor and indigent and has accepted the agency's condition to provide ten percent of its total annual patient days to Medicaid recipients To the contrary, North Bay's site will not be accessible by public transportation. In addition, North Bay has a less impressive record of providing care to the poor and indigent. Although AHCA conditioned North Bay's approval upon it providing 9.7 percent of total annual patient days to Medicaid and charity patients, instead of the 9.7 percent of gross annual revenue proposed in its application, North Bay has consistently provided Medicaid and charity patients less than seven percent of its total annual patient days. Section 408.035(8), Florida Statutes: The immediate and long-term financial feasibility of the proposal Immediate financial feasibility refers to the availability of funds to capitalize and operate the proposal. See Memorial Healthcare Group, Ltd. d/b/a Memorial Hospital Jacksonville vs. AHCA et al., Case No. 02-0447 et seq. Community Hospital has acquired reliable financing for the project and has sufficiently demonstrated that its project is immediately financially feasible. North Bay's short-term financial proposal is less secure. As noted, North Bay intends to acquire financing from BayCare Obligated Group. As a member of the group, Mease, the parent company of two hospitals that oppose North Bay's application, must approve the plan. Long-term financial feasibility is the ability of the project to reach a break-even point within a reasonable period of time and at a reasonable achievable point in the future. Big Bend Hospice, Inc. vs. AHCA and Covenant Hospice, Inc., Case No. 02-0455. Although CON pro forma financial schedules typically show profitability within two to three years of operation, it is not a requirement. In fact, in some circumstances, such as the case of a replacement hospital, it may be unrealistic for the proposal to project profitability before the third or fourth year of operation. In this case, Community Hospital's utilization projections, gross and net revenues, and expense figures are reasonable. The evidence reliably demonstrates that its replacement hospital will be profitable by the fourth year of operation. The hospital's financial projections are further supported by credible evidence, including the fact that the hospital experienced financial improvement in 2002 despite its poor physical condition, declining utilization, and lost market share to providers outside of its district. In addition, the development and population trends in the Trinity area support the need for a replacement hospital in the area. Also, Community Hospital has benefited from increases in its Medicaid per diem and renegotiated managed care contracts. North Bay's long-term financial feasibility of its proposal is less certain. In calendar year 2001, North Bay incurred an operating loss of $306,000. In calendar year 2002, it incurred a loss of $1,160,000. In its CON application, however, North Bay projects operating income of $1,538,827 in 2007, yet omitted the ongoing expenses of interest ($1,600,000) and depreciation ($3,000,000) from its existing facility that North Bay intends to continue operating. Since North Bay's proposal does not project beyond year two, it is less certain whether it is financially feasible in the third or fourth year. In addition to the interest and depreciation issues, North Bay's utilization projections are less reasonable than Community Hospital's proposal. While possible, North Bay will have a difficult task achieving its projected 55 percent increase in acute care patient days in its second year of operation given its declining utilization, loss of obstetric/pediatric services and termination of two exclusive managed care contracts. Section 408.035(9), Florida Statutes: The extent to which the proposal will foster competition that promotes quality and cost-effectiveness Both applicants have substantial unused capacity. However, Community Hospital's existing facility is at a distinct competitive disadvantage in the market place. In fact, from 1994 to 1998, Community Hospital's overall market share in its service area declined from 40.3 percent to 35.3 percent. During that same period, Helen Ellis' overall market share in Community Hospital's service area increased from 7.2 percent to 9.2 percent. From 1995 to the 12-month period ending June 30, 2002, Community Hospital's acute care market share in its service area declined from 34.0 percent to 25.9 percent. During that same period, Helen Ellis' acute care market share in Community Hospital's service area increased from 11.7 percent to 12.0 percent. In addition, acute care average occupancy rates at Mease Dunedin Hospital increased each year from 1999 through 2002. Acute care average occupancy at Mease Countryside Hospital exceeded 90 percent in 2000 and 2001, and was approximately 85 percent for the period ending June 30, 2002. Some of the loss in Community Hospital's market share is due to an out-migration of patients from its service area to hospitals in northern Pinellas and Hillsborough Counties. Market share in Community's service area by out-of- market providers increased from 33 percent in 1995 to 40 percent in 2002. Community Hospital's outdated hospital has hampered its ability to compete for patients in its service area. Mease is increasing its efforts to attract patients and currently completing a $92 million expansion of Mease Countryside Hospital. The project includes the development of 1,134 parking spaces on 30 acres of raw land north of the Mease Countryside Hospital campus and the addition of two floors to the hospital. It also involves the relocation of 51 acute care beds, the obstetrics program and the Neonatal Intensive Care Units from Mease Dunedin Hosptial to Mease Countryside Hospital. Mease is also seeking to more than double the size of the Countryside emergency department to handle its 62,000 emergency visits. With the transfer of licensed beds from Mease Dunedin Hospital to Mease Countryside Hospital, Mease will also convert formerly semi-private patient rooms to private rooms at Mease Dunedin Hospital. The approval of Community Hospital's relocated facility will enable it to better compete with the hospitals in the area and promote quality and cost- effectiveness. North Bay, on the other hand, is not operating at a distinct disadvantage, yet is still experiencing declining utilization. North Bay is the only community-owned, not-for- profit provider in western Pasco County and is a valuable asset to the city. Section 408.035(10), Florida Statutes: The costs and methods of the proposed construction, including the costs and methods or energy provision and the availability of alternative, less costly, or more effective methods of construction The parties stipulated that the project costs in both applications are reasonable to construct the replacement hospitals. Community Hospital's proposed construction cost per square foot is $175, and slightly less than North Bay's $178 proposal. The costs and methods of proposed construction for each proposal is reasonable. Given Community Hospital's severe site and facility problems, the evidence demonstrates that there is no reasonable, less costly, or more effective methods of construction available for its proposed replacement hospital. Additional "band-aide" approaches are not financially reasonable and will not enable Community Hospital to effectively compete. The facility is currently licensed for 401 beds, operates approximately 311 beds and is still undersized. The proposed replacement hospital will meet the standards in Florida Administrative Code Rule 59A-3.081, and will meet current building codes, including the Americans with Disabilities Act and the Guidelines for Design and Construction of Hospitals and Health Care Facilities, developed by the American Institute of Architects. The opponents' argue that Community Hospital will not utilize the 320 acute care beds proposed in its CON application, and therefore, a smaller facility is a less- costly alternative. In addition, Helen Ellis' architectural expert witness provided schematic design alternatives for Community Hospital to be expanded and replaced on-site, without providing a detailed and credible cost accounting of the alternatives. Given the evidence and the law, their arguments are not persuasive. While North Bay's replacement cost figures are reasonable, given the aforementioned reasons, including the fact that the facility is in reasonably good condition and can expand vertically, on balance, it is unreasonable for North Bay to construct a replacement facility in the Trinity area. Section 408.035(11), Florida Statutes: The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent Community Hospital has consistently provided the most health care services to Medicaid patients and the medically indigent in Sub-District 5-1. Community Hospital agreed to provide at least ten percent of its patient days to Medicaid recipients. Similarly, North Bay agreed to provide 9.7 percent of its total annual patient days to Medicaid and charity patients combined. North Bay, by contrast, provided only 3.56 percent of its total patient days to Medicaid patients in 2002, and would have to significantly reverse a declining trend in its Medicaid provision to comply with the imposed condition. Community Hospital better satisfies the criterion. Section 408.035(12) has been stipulated as not applicable in this case. Adverse Impact on Existing Providers Historical figures demonstrate that hospital market shares are not static, but fluctuate with competition. No hospital is entitled to a specific or historic market share free from competition. While the applicants are located in health planning Sub-District 5-1 and Helen Ellis and the two Mease hospitals are located in health planning Sub-District 5- 2, they compete for business. None of the opponents is a disproportionate share, safety net, Medicaid provider. As a result, AHCA gives less consideration to any potential adverse financial impact upon them resulting from the approval of either application as a low priority. The opponents, however, argue that the approval of either replacement hospital would severely affect each of them. While the precise distance from the existing facilities to the relocation sites is relevant, it is clear that neither applicants' proposed site is unreasonably close to any of the existing providers. In fact, Community Hospital intends to locate its replacement facility three miles farther away from Helen Ellis and 1.5 miles farther away from Mease Dunedin Hospital. While Helen Ellis' primary service area is seemingly fluid, as noted by its chief operating officer's hearing and deposition testimony, and the Mease hospitals are located 15 to 20 miles south, they overlap parts of the applicants' primary service areas. Accordingly, each applicant concedes that the proposed increase in their patient volume would be derived from the growing population as well as existing providers. Although it is clear that the existing providers may be more affected by the approval of Community Hosptial's proposal, the exact degree to which they will be adversely impacted by either applicant is unknown. All parties agree, however, that the existing providers will experience less adverse affects by the approval of only one applicant, as opposed to two. Furthermore, Mease concedes that its hospitals will continue to aggressively compete and will remain profitable. In fact, Mease's adverse impact analysis does not show any credible reduction in loss of acute care admissions at Mease Countryside Hospital or Mease Dunedin Hospital until 2010. Even then, the reliable evidence demonstrates that the impact is negligible. Helen Ellis, on the other hand, will likely experience a greater loss of patient volume. To achieve its utilization projections, Community Hospital will aggressively compete for and increase market share in Pinellas County zip code 34689, which borders Pasco County. While that increase does not facially prove that Helen Ellis will be materially affected by Community Hospital's replacement hospital, Helen Ellis will confront targeted competition. To minimize the potential adverse affect, Helen Ellis will aggressively compete to expand its market share in the Pinellas County zip codes south of 34689, which is experiencing population growth. In addition, Helen Ellis is targeting broader service markets, and has filed an application to establish an open- heart surgery program. While Helen Ellis will experience greater competition and financial loss, there is insufficient evidence to conclude that it will experience material financial adverse impact as a result of Community Hospital's proposed relocation. In fact, Helen Ellis' impact analysis is less than reliable. In its contribution-margin analysis, Helen Ellis utilized its actual hospital financial data as filed with AHCA for the fiscal year October 1, 2001, to September 30, 2002. The analysis included total inpatient and total outpatient service revenues found in the filed financial data, including ambulatory services and ancillary services, yet it did not include the expenses incurred in generating ambulatory or ancillary services revenue. As a result, the overstated net revenue per patient day was applied to its speculative lost number of patient days which resulted in an inflated loss of net patient service revenue. Moreover, the evidence indicates that Helen Ellis' analysis incorrectly included operational revenue and excluded expenses related to its 18-bed skilled nursing unit since neither applicant intends to operate a skilled nursing unit. While including the skilled nursing unit revenues, the analysis failed to include the sub-acute inpatient days that produced those revenues, and thereby over inflated the projected total lost net patient service revenue by over one million dollars.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Community Hospital's CON Application No. 9539, to establish a 376-bed replacement hospital in Pasco County, Sub- District 5-1, be granted; and North Bay's CON Application No. 9538, to establish a 122-bed replacement hospital in Pasco County, Sub-District 5- 1, be denied. DONE AND ENTERED this 19th day of March, 2004, in Tallahassee, Leon County, Florida. S WILLIAM R. PFEIFFER 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 19th day of March, 2004. COPIES FURNISHED: James C. Hauser, Esquire R. Terry Rigsby, Esquire Metz, Hauser & Husband, P.A. 215 South Monroe Street, Suite 505 Post Office Box 10909 Tallahassee, Florida 32302 Stephen A. Ecenia, Esquire R. David Prescott, Esquire Richard M. Ellis, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 Richard J. Saliba, Esquire Agency for Health Care Administration Fort Knox Building III, Mail Station 3 2727 Mahan Drive Tallahassee, Florida 32308 Robert A. Weiss, Esquire Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200 118 North Gadsden Street Tallahassee, Florida 32301 Darrell White, Esquire William B. Wiley, Esquire McFarlain & Cassedy, P.A. 305 South Gadsden Street, Suite 600 Tallahassee, Florida 32301 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308
