The Issue Whether the Agency for Health Care Administration found deficiencies at Cypress Manor sufficient to support issuance of a conditional license.
Findings Of Fact Petitioner, Cypress Manor, is a nursing home in Fort Myers, Florida, licensed by and subject to regulation by AHCA pursuant to Part II, Chapter 400, Florida Statutes. AHCA is the state agency charged with conducting licensure surveys of nursing home facilities in Florida to ensure that nursing homes are in compliance with state regulations. AHCA also surveys nursing homes to ensure that they are in compliance with federal Medicare and Medicaid requirements. The surveys are usually conducted by a team consisting of nurses, dieticians, and social workers from the AHCA. Each survey lasts approximately three days, during which time the AHCA team tours the facility; reviews records; interviews staff, families and residents; and observes care of residents and medication administration. After surveying the facility, AHCA prepares a survey report which lists the deficiencies found at the facility. The survey report is then sent to the nursing home. Each alleged deficiency found by AHCA during a survey is identified by a “tag” number, which corresponds to the regulation AHCA claims to have violated. A federal scope and severity rating is assigned to each deficiency. AHCA conducted a relicensure survey of Cypress Manor in September 1996, and a follow-up survey in November 1996. At both surveys, AHCA tagged the deficiency denominated as Tag F241, and gave this tag a “Class III” designation. The regulation described under Tag F241 states that: The facility must promote care for residents in a manner and in an environment that maintains or enhances each resident’s dignity and respect in full recognition of his or her individuality. AHCA contends that this regulation was violated by the actions of the facility as described in the survey reports. Because these alleged deficiencies were found in both surveys, AHCA contends that the facility should be given a conditional license. A conditional license has a significant adverse effect on a nursing home. It must be posted in a public place and AHCA publicizes this information, in part through issuance of press releases. A conditional rating affects the ability of the facility to attract residents, and causes morale problems among staff and existing residents. The rating makes staff recruiting difficult. The September 1996 survey report has two numbered findings. However, no evidence was presented as to the first finding. Therefore, the only pertinent and remaining allegations with respect to this survey are those listed under the second finding. The September 1996 survey cited the following findings under the Tag 241: (1)three residents at Cypress Manor, Residents 11, 12, and 13, were observed wearing slipper socks with the names of deceased residents written on them; Resident 11’s shoes were too small; and (3) the slipper socks of Resident 12, were twisted so that the bottom of each slipper was on the top of her foot. The policy at Cypress Manor was, and had been for many years, to label clothing of residents upon admission, and to write residents' names on slipper socks in approximately 1/4 inch letters. However, when residents died their family members would often donate the clothing of those individuals to Cypress Manor to be used for other residents who had insufficient clothing of their own. For example, Cypress Manor used these donated clothes for incontinent residents who would needed changes of clothing, including slipper socks, several times a day. This practice had been in place during surveys conducted by the AHCA in prior years, but had never been cited by AHCA surveyors as a deficient practice. There is no indication that either the subject residents or their families objected to this practice. Moreover, with regard to the slipper socks with names written on them, the writing on the socks had faded to the point that they could not easily be read. Nothing in the regulation specifically addresses the standards for footwear and no evidence was provided by the AHCA with respect to generally accepted standards for footwear. Moreover, no evidence or testimony was presented that the practice of allowing residents to wear donated clothing or slippers constituted a failure to treat such residents with dignity and respect. With regard to the finding that Resident 11’s shoes were too small, there was no evidence to support this claim. Rather, Resident 11 had shoes brought in by her husband, but she regularly took them off and left them in various places throughout the facility. The third alleged violation involved Resident 12, the resident whose slipper socks were turned around. According to Cypress Manor staff who know this resident, she was capable of and did, in fact, propel herself in a wheelchair. As a result of Resident 12’s propelling herself in the wheelchair, the slipper socks often turned. The November 1996 survey report contains eight numbered findings, none of which relate to the footwear issues described in the September survey. No evidence was presented by the agency at hearing with respect to findings 1, 2, 3, 4, or 7. In finding number five, AHCA noted that a resident was seen on two consecutive days wearing the same pink flowered gown and pink sweater. Although this was cited as violating the resident's dignity and respect, the AHCA surveyor acknowledged that the resident's clothing was clean and appropriate. Furthermore, the AHCA surveyor never asked the resident if she liked the clothes that she was wearing. Nor did the surveyor attempt to determine the resident's clothing preference. Cypress Manor staff members familiar with this resident were aware that she had favorite clothes and often insisted on wearing the same items of clothing. The pink sweater worn by the resident on the two days she was observed by the surveyor was one of the resident's favorite garments. In finding number six, AHCA indicated that during a tour of the facility with the facility administrator, the surveyor and administrator entered the room of a resident. The finding further noted that while in the resident’s room, the administrator asked the resident to describe her medical condition to the surveyor. In the surveyor's opinion, the resident seemed "surprised” when asked by the administrator to describe her condition to the surveyor. The issue of requesting that residents describe or discuss their conditions with surveyors is not covered in the regulations. However, it is standard practice as part of surveys to ask residents to describe their condition to surveyors, and it is becoming more common for residents to speak directly to surveyors. The resident referred to in finding number six was a relatively young and assertive resident who had lived at Cypress Manor for several years and served as president of the facility's Residents' Council. Also, as a former employee of the Department of Health and Rehabilitative Services, this resident was very familiar with the survey process. In fact, she would often comment to staff to "let those surveyors at me [sic]; I want to talk to them." This resident often spoke openly about her physical condition and, in the opinion of those who knew her well, would not have been offended by a request to describe her medical condition with AHCA surveyors. It was acknowledged by AHCA that dignity can vary depending on the individual, and that what might be considered undignified to one resident might not be undignified to another. While there are some areas that might be considered to violate the standard regarding the dignity of the patient, no general standards as to what constitutes such a violation was presented by AHCA. In finding number eight of the November 1996 survey report, AHCA stated that a resident in the dining room was given his meal, but did not receive eating utensils until approximately ten minutes later. The surveyor acknowledged that the resident did not attempt to eat the meal with his hands, but waited until the utensils were brought to him. At the time this occurred, there was a large number of residents in the dining room, all of whom were being served their meals. This incident appears to be an isolated and inadvertent oversight, and one that was immediately corrected. At the time of the relicensure survey of Cypress Manor, the facility had no Class I or Class II deficiencies; no Class III deficiencies not corrected within the time established by the agency; and was in substantial compliance with established criteria. It is the policy of the AHCA to classify all deficiencies as at least a Class III deficiency, even when, according to the federal evaluation, the facility would be in substantial compliance with the regulation at issue.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration enter a final order issuing a standard rating to Cypress Manor, and rescinding the conditional rating and imposition of the $500 penalty. DONE AND ENTERED this 6th day of January, 1998, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 Filed with the Clerk of the Division of Administrative Hearings this 6th day of January, 1998. COPIES FURNISHED: Donna H. Stinson, Esquire R. Davis Thomas, Jr., Qualified Representative Broad and Cassel 215 South Monroe Street Suite 400 Tallahassee, Florida 32302 Karel Baarslag Agency for Health Care Administration Regional Service Center 2295 Victoria Avenue Room 309 Fort Myers, Florida 33901 Jerome Hoffman General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308
The Issue The issue to be resolved in this proceeding concerns whether the Petitioners may recover certain costs expended for hiring additional staff, related to patient care and operating changes allegedly made to comply with existing state or federal statutes or rules, by means of the requested interim rate increases.
Findings Of Fact The Respondent, Agency for Health Care Administration (AHCA), as successor-in-interest to the Department of Health and Rehabilitative Services, is the state agency responsible for administering the Florida medicaid program. The nursing home section of the medicaid cost reimbursement division is responsible for setting the rates for Florida nursing homes. That section is also responsible for granting or denying interim rate requests. The office of licensure and certification (OLC), a division of the Agency for Health Care Administration, provides overall regulation for the nursing home industry in the State of Florida. The Petitioners were licensed by the State of Florida as nursing homes and certified for participation in the Florida medicaid program at all pertinent times. The Petitioner, Crestview Nursing and Convalescent Center (Crestview), is a 180- bed nursing home certified to and participating in the Florida medicaid program. It is located in Crestview, Florida. The Petitioner, The Bluffs, Inc., d/b/a The Bluffs Nursing Home (The Bluffs), is a 120-bed nursing home certified to and participating in the Florida medicaid program. It is located in Pensacola, Florida. The Florida medicaid Title XIX nursing home plan (reimbursement plan) is a prospective plan. Costs incurred in a cost-reporting period are submitted on a cost report. Medicaid reimbursement rates based upon such cost reports are then limited by a "target rate" which is facility specific. The target rate is based upon the previous semester's rate times 1.50 of the inflationary factor for that time period in the medicaid program- mandated formula. The nursing home then receives the lower of the costs actually incurred plus the true inflation factor or the nursing home target rate. It happens on occasion that a nursing home may incur additional costs for patient care or operating changes in a particular reporting period, as a result of complying with existing state or federal laws or regulations. In order for the nursing home not to suffer financially due to these additional costs, the reimbursement plan has an allowance for an interim rate increase request. If the interim rate provision were not in the reimbursement plan, the nursing home would never be able to fully recover the increased costs because of the prospective nature of the reimbursement plan and the restrictions of the target rate calculation. Thus, if Crestview and the Bluffs were not permitted an interim rate increase, they would lose the cost coverage from the medicaid program for subsequent years because the reimbursement rates are based upon the previous years' costs and are limited by the target rate calculation. The parties have stipulated that Crestview and The Bluffs have met the threshold requirements set out for an interim rate increase since the costs for which reimbursement is requested are at least $5,000.00 of increase and because the requested rate change would be 1 percent or more of the provider's total per diem rates. Crestview was cited by AHCA's OLC for repeat deficiencies in the areas of nutritional care and related weight loss by residents, decubitus care, and restraints utilization, in surveys conducted by that agency in July of 1991, November of 1991, and two surveys in February of 1992. These citations were for quality of care conditions recognized by the inspectors, as well as Lois Petty, director of nursing services for Crestview, as constituting violations of state and federal laws, rules and standards. Crestview maintains that it attempted to correct the cited violations by utilizing its existing staff, but was unsuccessful, and contends that it would not have been possible to come into compliance with the state and federal laws involved concerning quality of care without the costs of the additional staff that it hired and for which it seeks the interim rate increase. Scant evidence was presented to establish what the efforts to come into compliance using existing staff consisted of, however. There is no question that there were significant violations of relevant regulations in the areas found during the AHCA surveys concerning quality of patient care, referenced above. It is significant to note, however, that in the years immediately prior to the year of the beginning of the relevant surveys (1991) or, in essence, from 1987 through 1990, the Crestview facility enjoyed a superior or standard rating with the same numerical staff complement. This indicates that a great deal of inadequacies in quality of patient care resulted from personnel management and operational management problems at the facility, rather than merely that the staff in the relevant nursing positions was numerically inadequate. Corollarily, it is equally noteworthy that no inadequacies in numbers of staff and the required staff positions was noted by the surveyors. Crestview, both before the surveys were made and during the surveys, was staffed with more than the minimal staffing requirements and staff positions provided for in Title 10D, Florida Administrative Code. It thus cannot be found that all of the staff members hired by Crestview in response to the surveys and deficiencies noted by AHCA were necessary to come into compliance with the state and federal laws involved. Some additional staffing was necessary for this purpose however, because of the recent increase in resident population. After the November, 1991 survey by AHCA, Crestview added two licensed practical nurse (LPN) positions in response to the deficiencies cited by AHCA and based upon Ms. Petty's observations. The primary functions of one of the LPNs was to monitor and evaluate restraint use, and the other LPN position was created to address the nutritional status of the residents, including monitoring the dining room, meal intakes, and assuring that dietary supplements were given. These two positions were approved by the agency, as set forth in Mr. Hughes' letter of September 9, 1992. Mr. Hughes is the agency official charged with approving interim rate requests. These two positions were approved September 9, 1992. Crestview added a third nurse position to address the problem of decubitus or "pressure sores" experienced by many residents in the nursing home. This nurse was to monitor the new pressure sore prevention program instituted by Crestview, doing skin observation "rounds" and skin reports. The nursing home had been cited by AHCA for its high decubitus rate and lack of proper treatment of the pressure sores. Ms. Petty opined that the nurse position was needed in order to attend to the significant decubitus rate and to bring the facility into compliance with state and federal laws. Crestview also hired seven certified nursing assistants (CNA). The Department, in granting interim rates, allowed for the equivalent of three of those positions at the cost that Crestview attributed to those positions, as set forth in Mr. Hughes' letter of September 9, 1992. That cost represents the cost for hiring such personnel at the contract nursing pool rate obtainable through the nursing home operation consulting firm which Crestview retained and paid and for which expense it also sought interim rate reimbursement increases. In fact, the amount allowed for three such positions and the two nurse positions by the agency, in its free-form decision by Mr. Hughes, would actually pay for all of the positions sought for rate approval by Crestview if they were paid at what Mr. Hughes established to be a reasonable cost level, meaning what a "prudent and cost- conscious buyer" seeking to hire such personnel in the nursing home industry would typically pay for such a given service. The seven CNA positions were created by Crestview to provide the resident care services and functions depicted in paragraphs 13-16 of the Petitioners' proposed findings of fact and shown by Ms. Petty's testimony. Crestview maintains that these positions were created so as to bring the facility into compliance with the state and federal laws addressing the various quality of care deficiencies for which the facility was cited by AHCA. It was not proven, however, for the reasons found above, that, indeed, all of those positions were necessary in order to bring the facility into such compliance. It has not been demonstrated by a preponderance of the evidence that the five equivalent positions approved by the Department for Crestview would not have been sufficient to bring the facility into compliance with existing state or federal laws, rules or standards. In fact, sufficient evidence was not adduced to establish that proper performance by the director of nursing, in supervising personnel and operations of the facility, by the facility's administrator, and the entity owning and managing the facility, could not have brought the facility into compliance with pertinent laws and standards with little or no additional staff. The facility had enjoyed superior or standard ratings without the additional staff in the years immediately prior to the year in which the problems were found. In any event, Mr. Hughes's testimony, and to some extent, that of Ms. Gonzales, as well as the testimony of the Petitioner's witnesses upon cross- examination, establish that the five position equivalencies approved by the Department would be sufficient to bring Crestview into compliance with pertinent laws and rules, especially in view of the testimony of Mr. Hughes, which is accepted, that the amount approved for the positions would, in reality, fund all ten positions requested if the nursing home hired them at ordinary, reasonable and accepted rates in the industry, rates commonly approved by the medicaid system and plan. Crestview contends that because of the isolated and small labor market for such nursing personnel in the Crestview vicinity, it had to resort to the nursing home consulting firm and "nursing pool" in order to obtain, at the contract costs proposed, the nursing personnel in question. The Petitioners' evidence does not establish that it made significant efforts to hire the personnel itself, at the rates which the Department showed are ordinary and reasonable, without resort to the greater cost attributable to obtaining personnel through the consulting firm and contract nursing labor pool. Consequently, a preponderance of the evidence establishes that the interim rate request approval level determined by the Department in the free-form stage of this dispute is, indeed, an appropriate level under the circumstances established by the evidence of record. This is particularly appropriate because of the finding by the agency, established in this record, that an across-the- board wage increase of over $100,000.00 had been granted its employees by Crestview in the summer of 1992, shortly before the interim rate increase request was submitted. The interim rate increase request was not submitted until Crestview also became liable for significantly-increased costs for contract pool labor, which began to increase in June and July of 1992. In fact, all of the personnel contended by Crestview to be necessary had been hired and on the job since March of 1992 and yet the interim rate increase was not applied for until after the contract labor costs and the wage increases occurred. The agency thus granted an interim rate increase of some $223,000.00 out of approximately $500,000.00 requested, which was shown to cover the cost of ten regularly-compensated personnel of this type, based upon the reasonable cost basis for that kind of labor, as shown by the testimony of Mr. Hughes. The medicaid reimbursement plan only pays "allowable costs", which are those costs shown by Mr. Hughes, which should not exceed what a prudent and cost-conscious buyer would pay for a given service. The Bluffs was cited by the OLC to be deficient under licensure regulations for failing to properly document injuries to various residents and for failing to document decubitus ulcers (pressure sores) and nutritional problems among the nursing home residents. The deficiencies cited did not include any determination by the surveyors that additional staff was needed. Although the deficiencies involved record-keeping errors, whereby The Bluffs was failing to document and track residents with decubitus ulcers and residents with weight-loss problems, if a nursing home is not adequately tracking and recording such problems, then it tends to overlook and fail to adequately treat them. The lack of proper records concerning decubitus ulcers and nutritional deficiency makes it difficult to institute and consistently follow a treatment regimen for the decubitus ulcers and the weight loss problems and a consistently-effective prevention program, involving "skin rounds" and regular "turning" of patients who are unable to turn over in bed. The Bluffs was not cited for failing to treat pressure sores but, rather, for failure to document their presence, which can make it difficult to consistently monitor and treat them. Both before and after the citations, The Bluffs employed a director of nursing who is responsible for ascertaining that residents' injuries, weight loss, or decubitus ulcer problems are documented and that treatment therefor is obtained. Although The Bluffs was not directly cited for failing to maintain good nutritional status or because residents had pressure sores, the testimony of Ms. Petty establishes that the facility was not in compliance with existing state or federal laws, rules or standards in the area of maintaining good nutritional status and insuring that residents were receiving necessary treatment to promote healing and prevention of pressure sores. In the belief that it was unable to correct the deficiencies with its existing staff, The Bluffs hired a registered nurse (RN), an LPN, and a CNA. The CNA position was created to obtain weights and to assist with the feeding, including supplements, to offer alternatives for nourishment to residents, as well as to assist with daily skin rounds and to assist with the "positioning program" in order to bring the facility into compliance in the view of The Bluffs, concerning deficiencies in nutritional care and decubitus care. An LPN position was created in order to take care of the nutritional status of the residents, to assess weight variances in residents, to monitor meal and nourishment intake and also to act as a dining room supervisor. This position was created, according to The Bluffs, in order to bring the facility into compliance with good nutritional status for the residents and to address the problem of pressure sores. The Bluffs also created an RN position, responsible for the pressure sore prevention program and treating existing decubitus. This person makes daily skin rounds on all residents and is responsible for identifying those at risk of developing decubitus and assessing and evaluating the process of healing and notification of physicians if treatment alternatives are needed. This person is also responsible for monitoring the positioning program to make sure that the residents are placed in proper positions and that pressure-relieving devices are employed. This RN also does weekly assessments of pressure sores. In response to the deficiencies cited and those observed by Ms. Petty, there was developed at The Bluffs and Crestview a pressure sore positioning program and a meal monitoring program. There is no doubt, as shown by the testimony of Ms. Petty, that there was a serious problem with the provision of patient and nursing care to the residents at each facility. The Petitioners each were given conditional licenses after the initial inspection and notice of deficiencies. After the addition of the above- mentioned personnel and program corrections The Bluffs has brought its rating up to a standard rating. It will likely achieve a superior rating on its license this upcoming year. Crestview has moved from a conditional rating to a superior rating. The Petitioners maintain that the individuals hired at the facilities were hired prior to the request for an interim rate increase, have been maintained during the time of that increase request and are full-time positions. It was not shown, however, that the positions added at The Bluffs actually were required to be hired in order for the facility to maintain compliance with state or federal laws, rules, and relevant standards. While there is no doubt that the addition of these personnel and the hiring of the quality assurance consulting firm, at $6,000.00 per year, helped bring the two facilities into compliance with existing laws and included the imposition of systems devised by the consulting firm designed to provide training for the staffs, it was not actually demonstrated to be required in order to bring the facilities into compliance. The record reveals, as was the case with Crestview, that The Bluffs enjoyed superior or standard ratings in the years immediately prior to the year when the deficiencies were noted in the survey. It was not demonstrated by preponderant evidence that the standards became significantly more stringent in the year when the deficiencies were found. There is evidence from which an inference can be drawn that the director of nursing and the administration of the nursing home at The Bluffs was not managing and operating the facility correctly and efficiently in terms of nutrition and prevention and treatment of decubitous ulcers. All of these duties, which were assigned to the three new personnel in order to remove the "cloud" on The Bluffs' license, were duties that existing staff were required to perform in the first place. The evidence reveals, given the prior superior ratings, with the same original amount of staff, that had The Bluffs' staff been managed and trained properly, the deficiencies would not have occurred. If there was a problem with individual staff members, including the director of nursing, then those people could be removed from the staff complement, moved to other positions or simply trained and admonished in how to perform their job correctly so as to prevent the referenced deficiencies. It was not shown that the additional staff to correct the deficiencies was actually necessary in order to bring the facility into compliance with relevant law. The additional staff no doubt had that effect; but the extra expense to alleviate the deficiencies by that method, including the fee paid to the consulting firm, was not justified. Consequently, the interim rate increase for The Bluffs should be denied.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is RECOMMENDED that a Final Order be entered denying the interim rate request by The Bluffs Nursing Home and granting a rate increase to Crestview Nursing and Convalescent Center in the amount and in the manner found and concluded above. DONE AND ENTERED this 1st day of April, 1994, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 93-0915 AND 93-1542 Petitioners' Proposed Findings of Fact 1-8. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and as not supported by the preponderant evidence of record. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, to the extent that it depicts the duties of the additional nurse and Ms. Petty's view of the necessity but subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not to the extent that it is a finding that all seven CNAs were necessary. 13-16. Accepted, to the extent that these findings of fact depict what the duties of the personnel hired were, but not to the extent that it establishes that all were necessary to bring the facility into legal compliance. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and as not being supported by the preponderant evidence of record. Accepted. Rejected, as not being supported by the preponderant evidence of record. 20-24. Accepted, but not to the extent that it is found that the positions were actually necessary in order to bring the facility into legal compliance. Rejected, as contrary to the preponderant weight of the evidence and the Hearing Officer's findings of fact on this subject matter. Rejected, as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not itself dispositive of any material issues. 28-30. Accepted. 31. Rejected, as not being in accordance with the preponderant weight of the evidence. 32-33. Accepted. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and not entirely supported by the preponderant evidence of record. Accepted, as to the motivation of the nursing home administration in terms of why the hiring was done but not to the extent that it is agreed by the Hearing Officer that the hiring was necessary. Accepted. Rejected, as contrary to the preponderant weight of the evidence and the Hearing Officer's findings of fact on this subject matter. Rejected, as contrary to the preponderant weight of the evidence and subordinate to the Hearing Officer's findings of fact on this subject matter. 39-40. Accepted. 40-48. Accepted, but not necessarily as to the material import advanced by the Petitioners. 49. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Respondent's Proposed Findings of Fact 1-22. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. 23-33. Accepted. COPIES FURNISHED: Jonathan S. Grout, Esquire GOLDSMITH & GROUT, P.A. 307 West Park Avenue Post Office Box 1017 Tallahassee, Florida 32302-1017 Gordon B. Scott, Esquire Agency for Health Care Administration 1317 Winewood Boulevard Building Six, Room 271 Tallahassee, Florida 32399-0700 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Harold D. Lewis, Esquire General Counsel Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303
The Issue Which of three competing applicants for a certificate of need to construct a nursing home in health planning District 4, Subdistrict 3, best meets the statutory and rule criteria for approval.
Findings Of Fact The Agency for Health Care Administration (AHCA) is the department of state government which administers the certificate of need (CON) program for health care facilities and services in Florida, pursuant to Section 408.034, Florida Statutes. For the planning horizon beginning July 2001, AHCA published a numeric need for an additional 121 community nursing beds in nursing home planning District 4, Subdistrict 3, for southeast Duval and St. Johns Counties. Sawgrass Care Centers, Inc. (Sawgrass), Woodlands Extended Care, Inc. (Woodlands), and National Healthcare Corporation (NHC) are competing, mutually exclusive applicants for a CON to construct a 120-bed nursing home in District 4, Subdistrict 3. After reviewing the applications, AHCA preliminarily approved the issuance of CON No. 9125 to NHC. In the Prehearing Stipulation, filed on November 2, 1999, the parties agreed that the following criteria are either not applicable or are not in dispute: Subsections 408.035(1)(d), (e), (f), (g), (j), and (k), and Subsections 408.035(2)(a), (b), (c), and (d), Florida Statutes; Rule 59C- 1.036, Florida Administrative Code; and allocation factors 1, 3, 4, and 9 of the local health plan. During the final hearing, the parties also stipulated that all letters of intent were legally sufficient. The issues requiring resolution in this proceeding, the parties agreed, are: Subsections 408.035(1)(a), (b), (c), (h), (i), (l), (m), (n), and (o); and Subsection 408.035(2)(e), Florida Statutes; allocation factors 2, 5, 6, 7, and 8 of the local health plan; and Section 408.037, Florida Statutes. Sawgrass is the applicant for CON No. 9126 to construct a 120-bed nursing home in northern St. Johns County for approximately $3,967,000 in construction costs for a 56,800 square-foot building. The total project will cost approximately $6.4 million. Mr. S. W. Creekmore, Jr., who is the sole shareholder and president of Sawgrass, has been in the nursing home business over 30 years. Currently, Mr. Creekmore owns and operates between 30 and 40 nursing homes in Arkansas, California, Missouri, New York, Tennessee, Texas, and Nevada. Sawgrass is currently constructing Sawgrass Care Center of North Duval, an 84-bed addition to a 60-bed facility in Duval County. If CON No. 9126 is issued to Sawgrass, it will be on condition that Sawgrass: locate the 120-bed nursing home in northern St. Johns County within zip codes 32082, 32092, 32095, and 32259, in District 4, Subdistrict 3; provide a minimum of 63.51 percent total annual patient days to Medicaid patients; establish a 20-bed Alzheimer's care unit, a 20-bed Medicare unit, hospice services and respite care; admit AIDS patients; and construct the facility according to the schematic drawings. Sawgrass contends that its application should be approved primarily because of its proposed location in northern St. Johns County. An increase of beds in St. Johns County will correct what Sawgrass' expert health planner described as a maldistribution of nursing home beds within the district. Sawgrass also presented evidence questioning the financial feasibility of NHC's proposal. Woodlands is the applicant for CON No. 9123 to construct a 120-bed nursing home in southeast Duval County for approximately $5.2 million in construction costs for 53,155 gross square feet, and $7.9 million in total project costs. Woodlands currently operates Woodlands Terrace Extended Care Center (Woodlands-Deland), a 120-bed nursing home located in Deland, Florida. Woodlands is owned by Mr. Morris Esformes, who also owns EMI Enterprises, Inc. (EMI), a nursing home management company, with its headquarters in Illinois. EMI manages almost 3,000 nursing home beds in Missouri, Illinois, and Florida, including Woodlands-Deland. EMI provides bookkeeping, payroll, purchasing, insurance and other contract negotiation services for the nursing homes it manages. If its CON application is approved, Woodlands is committed to constructing the facility in southeast Duval County, to serving 63.01 percent Medicaid, 1 percent AIDS, and .5 percent indigent care, and to establishing units of 24 beds for subacute care and 20 beds for Alzheimer's care. Woodlands contends that existing nursing home occupancy levels support its decision to build and to condition its CON on a location in southeast Duval County. Woodlands presented evidence intended to demonstrate that the design of its Alzheimer's unit, and its proposed staffing levels are superior to those of NHC. Woodlands also maintained that its estimated construction cost is more reasonable and its design preferable to that of Sawgrass. Woodlands presented evidence to support the accuracy of Schedule 2 of its application and of its projected financing costs. NHC, the applicant for CON No. 9125, started in 1971, with fourteen nursing homes. Currently, NHC owns or manages approximately 100 facilities in nine states, 42 of those in Florida. Ten of the 42 Florida facilities are also owned by NHC. The new facility, NHC HealthCare, St. Augustine, will cost approximately $6.7 million to construct the building with 63,104 gross square feet, and $10.2 million in total project costs. NHC's CON would be issued on condition that NHC (1) provide 63.05 percent of total facility patient days to Medicaid at stabilized occupancy; (2) establish, as special programs, a 16-bed subacute unit and a 30-bed Alzheimer's/Dementia unit, provide adult day care through an existing provider, and offer respite and HIV/AIDS care. In addition, NHC commits to selecting a highly accessible site within one mile of a major artery or within three blocks of a bus stop. Although NHC presented evidence that St. Johns County is the preferable location for a new nursing home, it is not willing to have a condition on the county in which it will build as a condition for the CON. NHC, through the testimony of its assistant vice president for health planning, specifically reserved the right to locate anywhere within the subdistrict so long as the location complies with the local health plan description of a highly accessible site. NHC contends that approval of its CON will bring possibly the first and, among the competing applicants, the largest Alzheimer's unit to St. Johns County. NHC also challenged the financial feasibility of the Sawgrass and Woodlands proposals. 408.035(1)(a) - need for the facility and services proposed in relation to the district plan At issue in this proceeding, from the district health plan for District 4, are the following preferences or allocation factors: 2) For urban areas, applicants who will locate in an area highly accessible in terms of public and private transportation - within one mile from a major artery or within three blocks from a bus stop. Applicants who include in their CON application specific plans detailing how they intend to address the mental health needs of their clients, including having a provider skilled in the recognition and treatment of mental health problems. Applicants who document that their project addresses an unmet need for the nursing home placement of persons with a specific debilitating illness. Applicant must document that a need exists. (In November 1992, hospital discharge planners reported having difficulty placing ventilator and tracheotomy patients). Applicants who have JCAHO accreditation and superior ratings from AHCA in existing facilities. Applicants who propose to locate in a county or defined subcounty area within a subdistrict (such as north, southwest or southeast Duval; east or west Volusia) with a licensed bed occupancy rate of at least 91 percent for the most recent six-month period (January-June or July-December) prior to the start of the current CON review cycle and no additional beds are approved. Sawgrass described the area of St. Johns County in which it will locate as not urban and concluded, therefore, that allocation factor two is inapplicable to the Sawgrass application. Woodlands, which proposed locating in southeast Duval County, identified three alternative sites, all within a mile of major county, state, or interstate roads and highways, and within three blocks of public bus stops. Woodlands is not, however, committed to selecting any of those three sites. NHC's CON would include compliance with preference two as a condition for approval. If it chooses to locate in St. Johns County, NHC cannot comply with the alternative of locating within three blocks of a bus stop because there is no public transportation system in St. Johns County, but NHC can meet the preference by choosing a site in the County which is near a major artery. The three applicants included, in their CON applications, letters from mental health services providers who are willing to enter into agreements to care for residents of the facilities. While an expert witness raised an issue regarding the dates of the supporting letters, which are 1998 and early 1999 for Sawgrass, early in 1999 for Woodlands and, by contrast, late 1997 for NHC, there is no evidence that the services proposed are not still available. Overlapping to some extent with allocation factor five, for providing mental health services, is six, for meeting unmet needs of persons with specific debilitating illnesses, such as Alzheimer's/Dementia. The proposed 20-bed units dedicated to Alzheimer's/Dementia care at Sawgrass and Woodlands, and 30-bed unit at NHC comply with the that factor. Sawgrass and NHC, based on their evaluations of the subdistrict, particularly of St. Johns County, noted an absence of Alzheimer's care in a dedicated unit. There was credible evidence, however, that 40 residents have been placed in a locked 60-bed dedicated dementia unit, established at a facility called Bayview in St. Johns County, subsequent to the filing of these CON applications. There was also evidence that an estimated 50 percent of all nursing home residents suffer from some form of dementia. Ratings by AHCA and the Joint Commission on Accreditation of Health Organizations (JCAHO), are not yet available for the 84-bed Sawgrass facility in Duval County, because it is still under construction. Sawgrass relied on the experience of its principal, Mr. Creekmore, and of Mr. Donald Fike, the president and owner of RFMS, a corporation which manages nursing homes in Florida, Nevada and Illinois. RFMS has an agreement with Mr. Creekmore to manage Sawgrass. Mr. Creekmore, who resides in St. Johns County, owns facilities in Tennessee, California, New York, Nevada, Arkansas, Texas, and Missouri, none of which has had a license revoked or suspended or been in receivership within 36 months prior to the hearing. Currently, RFMS manages and Mr. Fike has a controlling interest in partnerships that own two nursing homes in Florida, 120-bed Surrey Place of Ocala (Surrey Place), which also has 36 assisted living units, and Hawthorne Care Center of Brandon (Brandon) with 90 existing beds, 30 approved beds, and 64 assisted living units which are under construction. An additional facility managed by RFMS and owned by Mr. Fike is under construction in Lakeland. RFMS' employees at its corporate headquarters in Galesburg, Illinois, provide management, budgetary, accounting, and recruiting services. RFMS has never managed a facility for Sawgrass or Mr. Creekmore, but its two Florida facilities, Surrey Place and Brandon, were rated superior until the state eliminated superior licenses on July 1, 1999. Woodlands operates one Florida facility, Woodlands- Deland, which had been rated superior as long as it was eligible for that designation. Woodlands-Deland is not JCAHO-accredited. Woodlands relied on the experience of its owner, Mr. Esformes, and his management company, EMI. Mr. Esformes has been in the nursing home business for approximately 30 years. No specific information on the ratings of the facilities owned by Mr. Esformes or managed by EMI was provided. Of the 42 Florida nursing homes operated by NHC, ten are also owned by NHC. Three of the ten were rated superior, one was not yet eligible, and one was also JCAHO-accredited at the time the CON application was submitted. By February 1999, five of the ten NHC owned and operated facilities in Florida were rated superior. Twenty-eight of the 32 NHC-operated Florida nursing homes were rated superior. From January through June 1998, the average occupancy was 90.84 percent in the subdistrict, 91.3 percent for southeast Duval County, and 89.36 percent for northern St. Johns County. Woodlands is committed to establishing its facility in southeast Duval County, Sawgrass is committed to the northern four zip codes in St. Johns County, and NHC is not committed to either but, in general, supported the need for a nursing home in St. Johns County. Subsequent data on occupancy shows consistency with past levels. In the second six months of 1998, the occupancy levels in nursing homes in St. Johns County was 88 percent, and in southeast Duval, 93 percent. From January through June 1999, St. Johns was 89 percent and southeast Duval was 92.8 percent occupied. Suggesting that occupancy percentages are not the sole indicators of the availability of beds, a health planning expert for Sawgrass noted that significantly more empty beds are available in southeast Duval County as compared to St. Johns County due to the larger total number of beds in the Duval area. Three CONs were issued in 1998 and 1999 to Vantage Health Care Corporation, which was identified as a Beverly Corporation, the first one for 60 beds in St. Johns County, a second one to add 56 beds to the first CON with Duval/St. Johns as the county on the face of the CON, and the third to add four skilled nursing beds to the first two CONs, or a total of 120 beds all together. Although, counties are indicated on each CON, none is specifically conditioned on a particular location within the subdistrict. AHCA lists the Vantage beds in its inventory for St. Johns County, which is supported by the testimony of the Executive Director of the Health Planning Council of Northeast Florida and by the most restrictive location on the face of the first 60-bed CON. Although of questionable value due to the arbitrariness of using zip codes for health planning purposes and due to the relatively minor, 2 percent difference in occupancy rates, preference eight favors a proposal to locate in southeast Duval County. More important in determining the preference for a southeast Duval location is the prior approval of 120 beds for St. Johns County, even though Vantage could build its facility in southern St. Johns County. 408.035(1)(b) - availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of existing facilities and services in the district In addition to the comparison of occupancy levels in St. Johns and Duval Counties, other factors affecting the availability and utilization of nursing beds have been considered. The total population 65 and over in Duval county was 79,986 as compared to 17,294 for St. Johns County in 1995. Population growth, however, has been and is projected to be greater in St. Johns than in Duval County. From 1998 to 2003, the population 65 years and older is expected to increase from 36,988 to 39,790, or 7.5 percent, in southeast Duval County, and from 8,506 to 9,922, or 17 percent, in the northern four zip codes in St. Johns County. Despite the fact that St. Johns is relatively sparsely populated currently, the data supports a conclusion that the trend from 1990 to 1995, when the over 65 population increased by 12 percent in Duval County and by 26.3 percent in St. Johns County, is continuing. The lower occupancy in St. Johns County was attributed, in part, to two facilities with occupancy rates consistently in the 87 to 88 range which occupy over 30 year-old concrete block buildings with survey problems. Although, in 1998, all of the facilities in St. Johns County were rated superior. Another explanation was the fact that one 57-bed facility, in northern St. Johns County, reserves five beds for residents of its retirement community. A second nursing home, near Ponte Vedra Beach in St. Johns County, is also a sheltered facility, which is limited to residents of the retirement community. Migration patterns, in a study done around 1996, showed significantly more St. Johns County residents placed in Duval County facilities than Duval County residents in St. Johns County facilities. Bed-to-population ratios in St. Johns and southeast Duval Counties are also factors which may indicate the relative availability and accessibility of nursing home services. The health planning experts for Sawgrass and NHC determined that a maldistribution of beds is indicated by the bed-to-population ratio, showing that St. Johns County is underserved as compared to the rest of the district. NHC's health planner testified that, for every one thousand people over the age of 65, there are 32 beds in St. Johns County as compared to 42 beds in Duval County. Sawgrass' health planner noted that 72 percent of the beds but only 66 percent of the district population is located in southeast Duval County, while four percent of the beds and 15 percent of the population are in northern St. Johns County. The discrepancy in bed-to-population ratio is more significant, according to the experts for Sawgrass and NHC, than the two percent difference in occupancy levels between the two areas of the subdistricts. Bed-to-population ratio analyses, however, assume uniform need which is not necessarily valid due to demographic variances in the population. The bed-to-population analysis also assumed that what was, at the time, 116 approved beds for Vantage would be constructed in southern St. Johns County. Considering the Vantage CONs together, the more reasonable conclusion is that Vantage could build the new nursing home anywhere in the County. Woodlands' proposed location was criticized by the health planner for NHC as contributing to a clustering of facilities in Duval County. As a part of that cluster, Woodlands might not greatly enhance accessibility although it does meet the local health plan preferences related to accessibility and occupancy. In addition, NHC argued, that the area is growing in young families not older people due in part to its proximity to Mayport Naval Station, and as indicated by the construction of three new elementary schools in the last six years. Accessibility and availability to specialty programs was another consideration evaluated by the health care planners. There is a need for more complex subacute care in nursing homes. The evidence indicated that Alzheimer's care in a dedicated unit was available in St. Johns County at the time of hearing although it had not been at the time the applications were filed. See also Finding of Fact 18. 408.035(1)(c) - history of providing and ability to provide quality of care As a legal entity, the applicant Sawgrass has no history of providing nursing home care in Florida. Sawgrass, however, through the experiences of Mr. Creekmore and Mr. Fike, has established that the owner and operator have histories of providing high quality of care. Based on the descriptions of operational styles and the policies of RFMS, Mr. Fike's management company, Sawgrass demonstrated the ability to provide a high quality of care if its CON application is approved. See Findings of Fact 20. Woodlands, as to a legal entity operating in Florida, has a limited but excellent history, with a superior rating at Woodlands-Deland beginning in 1997. Woodlands asserted, but without specific information on their other facilities, that its principal, Mr. Esformes, and his management company, EMI, have the ability to provide a high quality of care if CON 9123 is approved. See Findings of Fact 21. NHC has a more inconsistent but improving history, based on licensure, of providing quality of care in its Florida facilities. It is the only applicant with JCAHO accreditation but in only one of its ten Florida nursing homes. NHC has significantly more experience operating nursing homes than either of the other two applicants. See Findings of Fact 22. To determine quality of care, an additional factor urged for consideration is staffing, which overlaps with the following critera: 408.035(1)(h) - availability of resources, including health personnel, management personnel On Schedule 6, the table in the CON application which shows staffing patterns, NHC showed a total of 11.2 full-time equivalent (FTE) registered nurses (RNs). On Schedule 8, which listed the projected income and expenses for the proposal, NHC allocated RN salaries for 7.0 FTEs. NHC's 7.0 FTEs for RNs providing direct patient care is comparable to 5.6 for Sawgrass, and 8.4 for Woodlands. The comparison is valid because NHC included administrative as well as direct care positions in the total of 11.2 FTEs for RNs, including unit directors or managers and an assistant director of nursing. An NHC witness conceded that the RNs in these positions do not, as a routine responsibility, provide direct care. NHC also included a central supply clerk and nursing secretary in the FTEs for nurses aides or CNAs. NHC's regional administrator for Florida, Tennessee and Kentucky testified that staff in these positions also do not, as a routine, provide direct care to patients. NHC included one FTE for a medical director on Schedule 6, but indicated, at hearing, that the position is not full time. When the administrative positions are excluded, NHC's total direct hours of care per patient day (ppd) is approximately 3.18 hours, not 3.29 as described in the CON, as compared to 3.39 for Woodlands, and 3.29 for Sawgrass. When broken down based on the type of nurse providing the care, NHC's 3.18 total hours combines 2.38 hours by certified nurse assistants (CNAs) and 0.8 by licensed nurses (RNs and LPNs). Woodland's total of 3.39, combines 2.32 hours by CNAs and 1.07 hours by licensed nurses. For the Alzheimer's unit, NHC, in the CON application, erroneously described its proposal as providing 5.0 hours of care per resident day, but that was corrected at hearing by NHC's expert in health care financial feasibility and reduced to 2.58 hours. Woodlands provided at its current facility and proposed to provide at a new one approximately 3.9 hours ppd in the Alzheimer's unit. The staffing levels proposed by Sawgrass, NHC, and Woodlands all exceed the minimum state requirements of .06 ppd for licensed staff and 1.7 ppd for CNA, or 2.3 hours ppd total. Direct care staff at NHC perform some functions which would be performed by different personnel in the other two proposals. These duties include evening housekeeping, setting up and cleaning dining tables in the Alzheimer's unit, and answering evening telephone calls. Another indication of the demands on staff time is reflected in NHC's proposal to employ 7 FTEs in housekeeping for a 63,000 square foot building, as contrasted to Woodlands' use of 8 FTEs in its housekeeping department for 53,000 square feet. The staff at Woodlands will provide more direct resident care by higher level staff and reasonably, therefore, presumptively a higher quality of care than Sawgrass or NHC. NHC asserted that it can attract and retain quality staff by paying higher salaries. Using NHC's salary levels, NHC's expert determined that Sawgrass and Woodlands underestimated salary expenses by $573,000 and $522,000 respectively. NHC's total for projected salaries is $2,864,000, as compared to $2,386,653 for Woodlands and $2,318,119 for Sawgrass, although NHC will have seven fewer FTEs than Woodlands and six more than Sawgrass. NHC's comparison used 1998 average salaries, inflated forward, from Palm Gardens of Jacksonville (Palm Gardens), a facility managed by NHC for the owner, Florida Convalescent Centers (FCC). The average salary, for example for nurses, including administrators, such as the assistant director of nursing and Alzheimer's director, was applied to each nurse's position proposed by Woodlands and Sawgrass. NHC's methodology, particularly without any comparison of patient mix and acuity at Palm Gardens to that projected by the applicants, and the use of five percent annual inflation as compared to an actual annual inflation rate of three percent, when two statistical outliers are excluded, renders the analysis unreliable. The testimony of NHC's witness that the opening of new centers forces salaries to go up also indicates that the salary comparison includes some factor over and above actual inflation. 408.035(1)(h) - funds for capital and operating expenses, for project accomplishment and operation; 408.037(1)(a)1. - listing of all capital projects; and 408.035(1)(i) - immediate and long term financial feasibility The ability of Sawgrass to fund and finance the project was, in part, established by the deposition testimony of Jackie Garrett, Vice President, for Commercial Lending, First National Bank, Fort Smith, Arkansas, who is accepted as an expert in banking and finance as well as a fact witness. Having been involved for 30 years in financing projects for the Sawgrass owner, Mr. Creekmore, Ms. Garrett, in her letter of December 28, 1998, and in her testimony expressed the interest of the Bank in financing the Sawgrass project. Ms. Garrett also confirmed the possibility of financing up to 100 percent of the cost at better than an 8 percent fixed rate, as well as providing working capital as long as the loan is guaranteed by Mr. Creekmore. Ms. Garrett's letter to Mr. Creekmore offering to work out any contingencies with him and the inclusion of his personal financial statement in the application, lead to a reasonable conclusion that he can and will guarantee the financing for Sawgrass. Although a specific letter of commitment or the testimony of Mr. Creekmore could have provided a clearer commitment on his part, the documents in the application are sufficient to establish the short-term financial feasibility of Sawgrass. The accuracy of Schedule 2 of the Sawgrass CON application was questioned because it does not include an assisted living facility (ALF) for Duval County, which was proposed for construction on the campus with the nursing home. A financial expert for Sawgrass testified that the ALF is no longer planned, although AHCA was led to believe, in the prior nursing home CON, that an ALF would be built in conjunction with the nursing home. Comparing the historical payer mix and occupancy rates from similar facilities in the service area to staffing, salaries, and other fixed and variable expenses, the financial expert for Sawgrass demonstrated that the project is also financially feasible in the long term. To develop Woodlands-Deland, the general partner, Mr. Esformes, obtained financing primarily from AmSouth Bank in Orlando. The AmSouth loan was guaranteed by Mr. Esformes, who proposes similarly to finance the new Woodlands facility. In a letter dated December 30, 1998, and in her deposition testimony of October 26, 1999, an AmSouth assistant vice president indicates the availability of a loan to cover 75 to 85 percent of the total project cost. On behalf of EMI Enterprises, Inc., Mr. Esformes committed to funding the equity and working capital required from funds which are on deposit. AmSouth's lending limit for a borrower with Mr. Esformes' assigned risk rating is $15 million. NHC argued that Woodlands is not financially feasible in the short term because Mr. Esformes cannot borrow $8 million given his outstanding debt of $12,669,382. That position erroneously ignores the testimony of the bank officer when she stated that such projects, with liquidation of the property as a secondary source of repayment, can be treated separately, not grouped together and not aggregated to come to the $15 million total. She specifically considered Woodlands-Deland, saying, "And his other loan with the Deland property would be isolated for the same reason." See Deposition of Melissa Ann Ledbetter, October 26, 1999, page 11. In addition to the letter from AmSouth Bank, Woodlands presented a letter from and the testimony of Mr. Esformes on his commitment to the project. The evidence showed that Mr. Esformes has sufficient funds available to honor that commitment. Woodlands' proposal is, therefore, financially feasible in the short term. Woodland's long-term financial position was criticized based on Woodlands-Deland's not having achieved the utilization projected as quickly as projected. Utilization goals were adversely affected by the opening or expansion of other nursing homes at approximately the same time in the Deland area, an undesirable consequence which the District 4 health plan seeks to avoid. At the time of the hearing, Woodlands had a 1999 year-to-date profit of $106,000. Considering projected revenues and expenses, based on actual reimbursement rates at Woodlands- Deland, which are extremely high for Medicare, Woodlands' proposal is expected to be profitable in the long term. An expert for Sawgrass questioned NHC's short-term financial feasibility based on the sufficiency, commitment dates and changing investment policies of its funding sources. Schedule 2 of the NHC application lists total capital projects exceeding $436.6 million with approximately $397 million in "funds assured but not in hand and funds currently being sought." The application also includes letters of commitment establishing lines of credit from related companies National Health Investors, Inc. (NHI) for $260 million, and National Health Realty, Inc. (NHR) for $200 million. The letters are expressly valid through December 31, 1999, although what Sawgrass' expert estimated as the 12-month construction period for this project would begin approximately May 1, 2000, to end when operations commence on May 1, 2001. In addition, an examination of documents filed with the Securities and Exchange Commission (SEC) by NHI and NHR, according to the expert for Sawgrass, shows declining available funds and changing company objectives. As real estate investment trust (REIT) companies, NHI and NHR identify their typical financing arrangements mortgages and lease-back agreements, but do not specifically mention the extending of lines of credit. The SEC documents also indicate that NHI had approximately $136.9 million, available to fund health care real estate projects as of December 1998, not $260 million as committed for the line of credit to NHC. By June 1999, the SEC disclosures report a decrease to approximately $15.3 million available to fund health care real estate projects, of which approximately $12 million was available for the next 12 months. NHR's disclosures also indicate that the company will maintain its existing portfolio, not expand further. NHC's net income after taxes decreased from $23.7 million in 1997, to $8.2 million in 1998, adversely affected by declining Medicare reimbursements and increased taxes. The decline in profit from $37 million in 1997 to the projected $14 million for 1999 resulted largely from the expiration, on December 31, 1997, of special tax benefits for corporations. SEC disclosures indicate possible additional declines due to lawsuits over management contracts and a former employee, "whistle-blower" action, neither of which had been finalized at the time of the hearing. NHC's plan to reduce its taxes included the transfer of assets to NHI and NHR. NHC has also off-set losses by providing some therapies in-house and by group purchasing of pharmacy entical and medical supplies. In response to the loss of management agreements with FCC, NHC has successfully secured other management contracts and has eliminated certain regional positions. Reserves of approximately $31 million have been set aside for potential liability resulting from pending litigation, with FCC and in the former employee's qui tam action related to Medicare costs. Despite the efforts of NHC to adjust to changes in its financial position, the termination dates in the NHR and NHI letters of credit are troubling. The position of NHC, as investment advisor to NHI and NHR, and the ability of their Boards of Directors to change investment policies, without stockholder approval, suggests the likelihood of their funding the NHC project, if approved. Stronger support for a determination that at least NHR continues to be a source of funds for NHC comes from the deposition testimony of NHR's Senior Vice President, who signed the NHR line of credit letter. He noted that any projects submitted by NHC in the past have been approved by NHR and thinks it unquestionable that NHC would obtain financing for this project. That testimony rises to the level of the letters of interest by lending institutions submitted on behalf of the other applicants and establishes the short-term financial feasibility of the NHC proposal. NHC projected a net operating profit of $57,000 in year two which, with depreciation of about $350,000, results in a cash flow in excess of $400,000. NHC's proposal is financially feasible in the long term. 408.035(1)(l) - impact on costs; and 408.035(1)(m) - costs and methods of construction The estimated construction cost for Sawgrass is $70 a square foot for a 56,800 square foot building. By comparison NHC's estimated construction cost is $106 a square foot for the nursing home and a separate storage/maintenance building, totaling 63,104 square feet. Woodlands' 53,000 square foot facility will cost an estimated $98 a square foot. Sawgrass' construction costs were considered unreasonably low by some expert. The construction costs were developed by an expert in construction supervision and costs, who works for Medical Holdings Limited, another company which is owned by the Sawgrass President, Mr. Creekmore. The architects for the project work for another related wholly owned subsidiary of Medical Holdings Limited, Healthcare Builders, Incorporated (Healthcare Builders). Healthcare Builders is also owned by and only builds facilities for Mr. Creekmore. The estimated cost, $70 per square foot, is based on the use of local materials and subcontractors and excludes any profit, which alone would add from 8 to 10 percent to the cost. All of the salaries for the supervisors of the project, the general construction superintendent, the regular superintendent, and bookkeeper are paid by Healthcare Builders and excluded from constructions costs. Only one Sawgrass project, over the past 15 years, has required an application for a cost overrun. On this basis, Sawgrass established the reasonableness of the costs for its company. NHC's building is the largest and most expensive, with 71 resident rooms and 9-foot wide corridors, as compared to 66 rooms and 8-foot wide corridors for Woodlands and Sawgrass. NHC has 22 private rooms, but Woodlands and Sawgrass have 12 private rooms in each of their designs. NHC's private rooms range in size from 196.8 to 277 net square feet, as compared to 220 net square feet for Sawgrass, and 194 net square feet for Woodlands. Semiprivate rooms range in size from 196 to 246.7 net square feet for NHC, 198 to 218 for Woodlands, and 220 for Sawgrass. All three exceed the state minimums of 100 square feet for private rooms, and 160 square feet for semiprivate rooms. The schematics for NHC and Woodlands demonstrate more concern for safe outside spaces, with two separate enclosed courtyards, one designated for wandering which is typical of Alzheimer's residents. Woodlands' design also provides for two separate entrances, one for the main facility and one for the subacute unit. The subacute entrance is particularly desirable because the busier pattern of visitors is more akin to that in a hospital setting. NHC has 57 rooms with showers in the bathrooms, as compared to 53 for Woodlands and 18 for Sawgrass. The experts debated the benefits of privacy and the enhanced dignity and the reality that safety necessitates, for many, assistance in bathing. On the one extreme, NHC has unnecessarily included showers on the Alzheimer's unit for residents who are least likely to use them safely and most likely to need assistance, but Sawgrass has so few that the use of central bathing facilities will be necessary for most of its residents and will not enhance their privacy and dignity. Woodlands' design for the purposes intended, is the most reasonable, and its type of construction is the highest rated of the three. Despite the differences in size and construction costs, all three applicants propose relatively similar charges in a very narrow range of lows for Sawgrass and highs for NHC, from $105 to $115 a day for semiprivate rooms to $120 to $130 for private rooms. Reimbursement rates, primarily from Medicare, differ based on differences in acuity levels. 408.035 (1)(n) - past and proposed Medicaid and indigent care Sawgrass has received one CON in Florida with a Medicaid commitment of 87.4 percent of total resident days. Other CON applications prepared for Mr. Creekmore have offered to meet or exceed the prevailing community Medicaid occupancy levels. Woodlands committed to providing a minimum of 63.01 percent Medicaid and 0.5 percent indigent resident days. Woodlands has reached 63 percent but not its committed level of 66 percent Medicaid in its Deland facility, although it expected to do so when final data at full occupancy becomes available for 1999. NHC's proposal includes the provision of 63.05 percent of total resident days to Medicare. AHCA has determined that NHC is not in compliance with its Medicaid commitment in two of its facilities, located in Daytona and on Merritt Island, but due to its extensive operations in Florida, NHC provides substantial Medicaid care. 408.035(1)(o) - continuum of care in multilevel system All three of the applicants plan to offer Alzheimer's hospice, respite and subacute care. Sawgrass included a 60-unit ALF on its schematic design and on its Schedule 2 for a cost of $4 million. The ALF will be connected to the nursing home by a covered entrance. Sawgrass also planned but is not constructing an ALF with its Duval County project. See Finding of Fact 45. Woodlands stated its intention to build an ALF on the same campus with the proposed nursing home in a misleading narrative on page 114 of the application, but did not include it as part of the project in either the schematics or on Schedule 2 of the CON application. At the hearing, Woodlands' witness conceded that an ALF would not be built, if at all, for several years until the nursing home proves to be financially viable and then, by a separate corporation. In addition to the services provided by the other applicants, NHC plans to offer adult day care through existing providers. Only Sawgrass meets the criterion for proposing a multilevel system of care, based on the assumption that it will build the ALF as planned. 408.035(2)(e) - consisting with plans of other state agencies responsible for providing or financing long term care All three proposals are consistent with the policies of other responsible state agencies, including the Department of Elder Affairs. Summary Comparison of Applications This case is difficult, in part, because there is not a great difference among the applicants based on any one of the criteria. In terms of location, southeast Duval has a slight advantage due to its larger population, occupancy levels, and the approved CON for St. Johns County. Woodlands promises to provide a higher quality of care than NHC and Sawgrass based on proposed staffing, but has only operated one other Florida facility, albeit a superior one. Woodlands provided less detailed information on its owner's and manager's operations of out-of-state facilities. All three applicants have what appear to be at this relatively early stage of the process, reliable funding sources and plans to operate profitably. Woodlands' construction cost and design are the most reasonable for the purposes intended, although no appreciable differences in patient room charges were demonstrated. Based on past history and current proposals, all of the applicants will provide adequate and appropriate levels of Medicaid care. Only Woodlands will also provide a small percentage of indigent care. Sawgrass, by offering to construct an ALF in conjunction with nursing home and by designating a funding source to do so, offers the greatest continuum of care in a multilevel setting. On balance, the application submitted by Woodlands is superior.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order of the Agency for Health Care Administration issue CON No. 9123 to Woodlands Extended Care, Inc. to construct a 120-bed nursing home in southeast Duval County on the conditions set forth in the application and in Findings of Fact 10 of this Recommended Order; and deny CON No. 9125 to National Healthcare Corporation, and CON No. 9126 to Sawgrass Care Center, Inc. DONE AND ENTERED this 14th day of August, 2000, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (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 14th day of August, 2000. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Richard Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Robert D. Newell, Jr., Esquire Newell & Terry, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 Gerald B. Sternstein, Esquire Frank P. Rainer, Esquire Sternstein, Rainer & Clarke, P.A. 314 North Calhoun Street Tallahassee, Florida 32301-7606 Theodore E. Mack, Esquire Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303
The Issue The issue for determination is whether the Agency for Health Care Administration found deficiencies at Wellington Specialty Care and Rehab Center sufficient to support the change in its licensure status to a conditional rating.
Findings Of Fact Wellington is a nursing home located in Tampa, Florida, licensed by and subject to regulation by the Agency pursuant to Chapter 400, Florida Statutes. The Agency is the licensing agency in the State of Florida responsible for regulating nursing facilities under Part II of Chapter 400, Florida Statutes. On September 10, 1998, the Agency conducted a complaint investigation at Wellington in a matter unrelated to the issues that are the subject of this proceeding. On that same date, the Agency also conducted an appraisal survey that focused on six areas of care for which Wellington had been cited as deficient in past surveys. After the investigation and survey were completed, the Agency determined that there was no basis for the complaint, and further determined that Wellington was not deficient in any of the six areas of care which were the subject of the appraisal survey. Notwithstanding its findings that the complaint against Wellington was unfounded and that there were no deficiencies in the targeted areas of care being reviewed, the Agency determined that Wellington was deficient in an area not initially the subject of the September 1998 survey. Specifically, the Agency found that Wellington had failed to provide adequate supervision and assistance devices to two residents at the facility in violation of the regulatory standard contained in 42 C.F.R. s. 483.25(h)(2). Based on its findings and conclusions, the Agency issued a survey report in which this deficiency was identified and described under a "Tag F324." The basis for the Agency’s findings were related to observations and investigations of two residents at the facility, Resident 6 and Resident 8. During the September 1998 survey and complaint investigation, the surveyors observed that Resident 6 had a bruise on her forehead and that Resident 8 had bruises on the backs of both of her hands. Resident 6 suffered a stroke in May 1998 and had left-side neglect, a condition that caused her to be unaware of her left side and placed her at risk for falls. Moreover, Resident 6's ability to recall events was impaired. The Agency's investigation revealed that Resident 6 sustained the bruise on her forehead when she fell from the toilet on August 31, 1998. The Agency determined that Resident 6 fell because she was left alone by the staff of the facility and further concluded that Wellington was responsible for causing this fall. The Agency believed that given Resident 6's left-side neglect, the facility staff should have known not to leave the resident unattended during her trips to the toilet. The Agency suggested that Wellington should have provided constant supervision to Resident 6, although it acknowledged that such supervision may have created privacy violations. In making its determination and reaching its conclusions, the Agency relied exclusively on an interview with Resident 6, notwithstanding the fact that her ability to recall events was impaired. Since Resident 6 was admitted to the facility in May 1998, Wellington appropriately and adequately addressed her susceptibility to falls, including falls from her toilet. After Resident 6 was initially admitted to the facility in May 1998, she received occupational therapy to improve her balance. In late June 1998, following several weeks of occupational therapy, Wellington’s occupational therapist evaluated Resident 6’s ability to sit and to control the balance in the trunk of her body and determined that the resident was capable of sitting upright without support for up to 40 minutes. Based upon that assessment, Resident 6 was discharged from occupational therapy on June 25, 1998, and her caregivers were provided with instructions on how to maintain her balance. At the time Resident 6 was discharged from occupational therapy, a care plan was devised for her which provided that the facility staff would give her assistance in all of her activities of daily living, but would only provide stand-by assistance to Resident 6 while she was on the toilet, if such assistance was requested. In light of the occupational therapist's June 1998 assessment of Resident 6, this care plan was adequate to address her risk for falls, including her risk for falls while on the toilet. Wellington also provided Resident 6 with appropriate assistance devices. In Resident 6's bathroom, Wellington provided her with a right-side handrail and an armrest by her toilet to use for support and balance, and also gave her a call light to alert staff if she felt unsteady. These measures were effective as demonstrated by the absence of any falls from the toilet by Resident 6 over the course of June, July, and August 1998. The Agency's surveyor who reviewed Resident 6’s medical records was not aware of and did not consider the June 1998 Occupational Therapy Assessment of Resident 6 before citing the facility for the deficiency. Resident 8 was admitted to Wellington in February 1998 with a history of bruising and existing bruises on her body. At all times relevant to this proceeding, Resident 8 was taking Ticlid, a medication which could cause bruising and also had osteopenia, a degenerative bone condition that could increase Resident 8's risk for bruising, making it possible for her to bruise herself with only a slight bump. After observing the bruising on the backs of both of Resident 8's hands during the September 1998 survey, the Agency asked facility staff about the bruising and also reviewed the resident’s medical records. Based on her interviews and record review, the Agency surveyor found that these bruises had not been ignored by Wellington. Rather, the Agency found that when facility staff initially observed these bruises on Resident 8's hands, (1) staff had immediately notified Resident 8's physician of the bruises; and (2) the physician then ordered an X-ray of Resident 8 to determine whether there was a fracture. The X-ray determined that there was not a fracture but that there was evidence of a bone loss or osteopenia, which indicated that Resident 8 had an underlying structural problem which could increase the resident's risk for bruising. The Agency surveyor found nothing in Resident 8's medical record to indicate that the facility had investigated the bruising on the resident’s hands, identified the cause of the bruising, or identified any means to prevent the bruising from reoccurring. Based on the absence of this information in Resident 8's records, the Agency cited the facility for a deficiency under "Tag F324." The Agency's surveyor made no determination and reached no conclusion as to the cause of the bruising. However, she considered that the bruising on Resident 8 may have been caused by the underlying structural damage, medication, or external forces. With regard to external forces, the surveyor speculated that the bruising may have occurred when Resident 8 bumped her hands against objects such as her chair or bed siderails. During the September 1998 survey, when the Agency surveyor expressed her concerns about the cause of the bruising on Resident 8's hands, Wellington’s Director of Nursing suggested to the surveyor that the bruising could have been the result of the use of improper transfer techniques by either Resident 8’s family or the facility staff, or Resident 8’s medications. Despite the surveyor's speculation and suggestions by the facility's Director of Nursing, the Agency surveyor saw nothing that would indicate how the bruising occurred. In fact, the Agency surveyor's observation of a staff member transferring Resident 8 indicated that the staff member was using a proper transfer technique that would not cause bruising to the resident’s hands. The Agency surveyor made no other observations and conducted no investigation of the potential causes of the bruising on Resident 8's hands. During the September 1998 survey, after the Agency surveyor inquired as to the cause of the bruises on Resident 8's hands, the facility conducted an investigation to try to identify the potential causes for the bruising. The investigation was conducted by the facility’s Care Plan Coordinator, a licensed practical nurse who was also the Unit Manager for the unit on which Resident 8 was located. Included in the Care Plan Coordinator's investigation was a thorough examination of the potential causes suggested by the Agency's surveyor. The Agency surveyor’s speculation that the bruising was caused when Resident 8 hit her hands against her chair or bed siderails was ruled out as a cause for the bruises because Resident 8 was unable to move around in her bed or chair. More importantly, there were no bedrails on Resident 8's bed and her chair was a heavily padded recliner. Also, as a part of her investigation, the Care Plan Coordinator observed the transfer techniques employed by both Resident 8's family members and facility staff. During these observations, she did not see any indication that the techniques used were improper or would otherwise cause Resident 8 to bruise her hands. Based upon her thorough investigation, the Case Plan Coordinator determined that there were no identifiable causes of the bruising and, thus, there were no care plan interventions that the facility could have implemented then or in September 1998 to prevent the bruising suffered by Resident 8. Instead, the Care Plan Coordinator reasonably concluded that the bruising was most likely an unavoidable result of Resident 8's medications and her osteopenia. The Agency is required to rate the severity of any deficiency identified during a survey with two types of ratings. One of these is "scope and severity" rating which is defined by federal law, and the other rating is a state classification rating which is defined by state law and rules promulgated thereunder. As a result of the September 1998 survey, the Agency assigned the Tag F324 deficiency a scope and severity rating of "G" which, under federal regulations, is a determination that the deficient practice was isolated. The Tag F324 deficiency was also given a state classification rating of "II" which, under the Agency’s rule, is a determination that the deficiency presented "an immediate threat to the health, safety or security of the residents." Because the Agency determined that there was a Class II deficiency at Wellington after the September 1998 survey, it changed Wellington’s Standard licensure rating to Conditional, effective September 10, 1998. At the completion of the September 1998 survey, the Agency assigned the Class II rating to the deficiency although the surveyors failed to determine and did not believe that there was an immediate threat of accidents to other residents at Wellington. In fact, at the time of the September 1998 survey, the number of falls at Wellington had declined since the last survey. The Agency returned to Wellington on November 6, 1998, to determine if the facility had corrected the Tag F324 deficiency cited in the September 1998 survey report. After completing that survey, the Agency determined that the deficiency had been corrected and issued Wellington a Standard License effective November 6, 1998.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the Agency for Health Care Administration enter a final order issuing a Standard rating to Wellington and rescinding the Conditional rating. DONE AND ENTERED this 17th day of May, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 17th day of May, 1999. COPIES FURNISHED: R. Davis Thomas, Jr., Esquire Qualified Representative Broad and Cassel 215 South Monroe, Suite 400 Post Office Drawer 11300 Tallahassee, Florida 32302 Thomas Caufman, Esquire Agency for Health Care Administration 6800 North Dale Mabry Highway Suite 200 Tampa, Florida 33614 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Paul J. Martin, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
Findings Of Fact Under the methodology in effect at the time these applications were submitted there were 74 beds available in the Polk County area according to the 1982 Health Systems Plan of the now defunct South Central Florida Health Systems Council. Based upon this plan, and without further study of the need for additional nursing home beds, Petitioner Haines City Health Care Center on October 14, 1982 filed an application for a certificate of need to add 72 beds to a nursing home under construction in Haines City, Florida (Exhibit 1) and Petitioner, Health Care Associates, on October 15, 1982, filed an application for a certificate of need to construct a 120-bed skilled nursing home in Lakeland, Florida (Exhibit 3). This was amended to request a certificate of need to construct a 74-bed nursing home. Effective November 15, 1982 Chapter 10-5, Florida Administrative Code was amended and Rule 10-5.11(21)(b) established a new methodology for determining need for nursing home beds in both the regions and the sub-regions. Using this methodology and counting the beds approved but not yet in service, DHRS found an excess of 517 nursing home beds in Polk County through 1985 in lieu of the 74 additional beds reported as needed in the Health Systems Plan. (Exhibit 6). Projecting the need to 1986 and using the methodology of Rule 10- 5.11(21)(b), Florida Administrative Code and counting those beds approved but not yet licensed results in an excess of of 367 beds in Polk County and an excess of 464 beds districtwide (T p.79). Both Petitioners presented testimony indicating they are experienced nursing home operators and capable of operating nursing homes. Although no specific cost figures were presented to support the testimony of either Petitioner that it would be a cost effective operator, it is obvious, but not here relevant, that it would be less expensive per bed to add beds to the facility under construction at Haines City than to acquire property and construct a new facility at Lakeland. Exhibit 1 reflects costs of $1,250,000 for the 72 bed addition at Haines City while Exhibit 3 reflects costs of $2,738,000 for a new 120-bed nursing home at Lakeland. No competent evidence was submitted by either Petitioner to establish a need for any additional nursing home beds. Petitioner's Quality Health Facilities, Inc., witness acknowledged no study had been done by his organization to demonstrate a need for additional beds in Polk County, while Petitioner's Health Care Associates, witness relied upon his expertise in operating nursing homes in Florida and general observations of the population growth to conclude additional nursing home beds could be utilized. No statistical information was submitted to support this bare opinion.
The Issue Whether Respondent’s nursing home license should be disciplined, and whether Respondent’s nursing home license should be changed from a Standard license to a Conditional license.
Findings Of Fact Bayside Manor is a licensed nursing home located in Pensacola, Florida. On June 14, 2003, Resident No. 4 climbed out of her bed without assistance to go to the bathroom. She fell to the floor and sustained a bruise to her forehead and lacerations to her cheek and chin. Her Foley catheter was pulled out with the bulb still inflated. The fall occurred shortly after Resident No. 4 had finished eating. No staff was in her room when she climbed out of her bed. She was found on her side on the floor by staff. According to the June 14 Bayside’s Nurses' notes, Resident No. 4 stated, "Oh, I was going to the bathroom." In the hour prior to her fall, Resident No. 4 was seen at least three times by nursing assistants, which was more than appropriate monitoring for Resident No. 4. On June 20, 2002, AHCA conducted a survey of Bayside Manor’s facility. In its survey, AHCA found one alleged deficiency relating to Resident No. 4. The surveyor believed that Resident No. 4 should have been reassessed for falls by the facility and, based upon that reassessment, offered additional assistive devices and/or increased supervision. The surveyor also believed that the certified nursing assistant had left Resident No. 4 alone with the side rails to her bed down. The deficiency was cited under Tag F-324. Tag F-324 requires a facility to ensure that “[e]ach resident receives adequate supervision and assistance devices to prevent accidents.” The deficiency was classified as a Class II deficiency. On October 9, 2001, and January 14, 2002, Bayside Manor assessed Resident No. 4 as having a high risk for falls, scoring 9 on a scale where scores of 10 or higher constitute a high risk. In addition to the June 14, 2002, fall noted above, Resident No. 4 had recent falls on November 30, 2001, April 19, 2002, and May 12, 2002. Resident No. 4's diagnoses included end-stage congestive heart failure and cognitive impairment. She had periods of confusion, refused to call for assistance, and had poor safety awareness. Resident No. 4 had been referred to hospice for palliative care. Because hospice care is given when a resident is close to death, care focuses on comfort of the resident rather than aggressive care. Additionally, the resident frequently asked to be toileted even though she had a catheter inserted. She frequently attempted to toilet herself without staff assistance, which in the past had led to her falls. Often her desire to urinate did not coincide with her actual need to urinate. She was capable of feeding herself and did not require assistance with feeding. Bayside Manor addressed Resident No. 4’s high risk of falls by providing medication which eliminated bladder spasms that might increase her desire to urinate and medication to alleviate her anxiety over her desire to urinate. She was placed on the facility’s falling stars program which alerts staff to her high risk for falls and requires that staff check on her every hour. The usual standard for supervision in a nursing home is to check on residents every two hours. The facility also provided Resident No. 4 with a variety of devices to reduce her risk of falling or any injuries sustained from a fall. These devices included a lap buddy, a criss-cross belt, a roll belt while in bed, a low bed, and a body alarm. Some of the devices were discontinued because they were inappropriate for Resident No. 4. In December 2001, the roll belt was discontinued after Resident No. 4, while attempting to get out of bed, became entangled in the roll belt and strangled herself with it. On May 6, 2002, the low bed and fall mat were discontinued for Resident No. 4. The doctor ordered Resident No. 4 be placed in a bed with full side rails. The doctor discontinued the low bed because it could not be raised to a position that would help alleviate fluid build-up in Resident No. 4’s lungs caused by Resident No. 4’s congestive heart failure. Discontinuance of the low bed was also requested by hospice staff and the resident’s daughter to afford the resident more comfort in a raised bed. The fact that placement in a regular raised bed potentially could result in an increase in the seriousness of injury from a fall from that bed was obvious to any reasonable person. The May 5, 2002, nurses’ notes indicate that there was a discussion with Resident No. 4’s daughter about returning the resident to a high bed for comfort. On balance, the placement of Resident No. 4 in a regular raised bed was medically warranted, as well as reasonable. The placement in a regular bed with side rails was not noted directly in the care plan but was contained in the doctor’s orders and was well known by all the facility’s staff. There was no evidence that directly mentioned the regular bed in the formal care plan was required or that the failure to do so had any consequence to Resident No. 4’s care. Even a lack of documentation clearly would not constitute a Class II deficiency. Moreover, the bed with side rails was not ordered to protect or prevent falls by Resident No. 4. The facility does not consider a bed with side rails of any sort to be a device which assists in the prevention of falls. Indeed rails often cause falls or increase the injury from a fall. In this case, the rails were ordered so that the resident could more easily position herself in the bed to maintain a comfortable position. Again, the decision to place Resident No. 4 in a regular raised bed with side rails was reasonable. The focus is on comfort as opposed to aggressive care for hospice residents. The evidence did not demonstrate that Bayside Manor failed to adequately supervise or provide assistive devices to Resident No. 4. There was no evidence that reassessment would have shown Resident No. 4 to be at any higher risk for falls, since she was already rated as a high risk for falls. Nor did the evidence show that reassessment would have changed any of the care given to Resident No. 4 or changed the type bed in which she was most comfortable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order restoring the Respondent’s licensure status to Standard and dismissing the Administrative Complaint. DONE AND ENTERED this 3rd day of June, 2003, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 3rd day of June, 2003. COPIES FURNISHED: Joanna Daniels, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Donna H. Stinson, Esquire R. Davis Thomas, Jr., Esquire Broad & Cassel 215 South Monroe Street, Suite 400 Post Office Box 11300 Tallahassee, Florida 32302 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue The issue for consideration in this hearing is whether Respondent should be issued a Conditional License rating for the period effective April 9, 1999 through October 31, 1999, because of deficiencies alleged as a result of an Agency survey conducted on April 9, 1999.
Findings Of Fact At all times pertinent to the issues herein the Agency was the state agency responsible for the licensing and regulation of health care facilities, including long-term care nursing homes in Florida. Respondent, Beverly Enterprises-Florida, operated a licensed long-term care nursing home under the name Emerald Oaks, located at 1507 South Tuttle Avenue in Sarasota, Florida. On April 9, 1999, as a result of a complaint of lack of supervision resulting in injury to residents, Mary Patricia O'Connell, a surveyor for the Agency, visited Respondent's facility to inquire into the injury to two residents that took place in early April 1999. Ms. O'Connell is a registered nurse with in excess of 25 years' experience in nursing homes, including ten years as a director of nursing. She has been a surveyor for the Agency for the past six years. During the course of her survey of the facility, Ms. O'Connell examined the records pertaining to Residents 1 and 2, the individuals regarding whose injuries the complaint was filed. Ms. O'Connell's review indicated that the incidents in question constituted failures to meet the standards set up under Tags F224 and F324, as identified on the Form 2567-L of the U.S. Department of Health and Human Services' Health Care Financing Administration. Tag F224, reflecting the requirements of Section 483.13(c)(1)(I), Florida Statutes, requires a facility to develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents. Tag F-324, reflecting the requirements of Section 483.25(h)(2), Florida Statutes, requires a facility to ensure that each resident receives adequate supervision and assistance devices to prevent accidents. Petitioner limited its evidence to the facts and circumstances surrounding Tag F324, contending that the evidence regarding this tag applies to Tag F224 as well. Ms. O'Connell, the only witness for the Petitioner, was asked her opinion only regarding the facility's compliance with the requirements of Tag F324. The nursing notes and medical records upon which she relied in part were not written by her, and were, in some cases, not the personal knowledge of the author. As such they are clearly hearsay evidence. Resident 2 was, at the time of the incident, an 85-year- old female suffering from hypertension and dementia. On February 10, 1999, the facility completed a Minimum Data Set (MDS) on the resident which described her as requiring extensive assistance with one person to physically assist for transferring and dressing, using full bed rails on all open sides of her bed. Her medical records reflected that she had fallen on March 12, April 13, April 25, May 9, May 14, July 24, August 16 and 23, November 19, and December 11, 1998, and on March 12, 1998, her physician ordered two bed rails as an enabler while the resident was in bed. The doctor subsequently also directed the use of a wedge cushion for wheelchair positioning on April 12, 1998, and a TABS unit an alarm system in bed and in the wheelchair, in the event the resident tried to get out of the chair or bed unassisted. During the course of her investigation, Ms. O'Connell spoke with the Certified Nursing Assistant (CNA) assigned to care for Resident 2 on April 3, 1999, who related that she had removed the TABS unit and placed Resident 2 on the side of the bed with the bed rails down and turned away from the resident to call out to another CNA for help in moving Resident 2 to her chair. When the assigned CNA turned back to the resident, she found the resident on the floor. The resident did not complain at the time, and the only injury found at that time was a light abrasion to both knees. She was placed into her wheel chair. The resident's records reflect that although she was observed several times in the interim, as late as 2:00 a.m., on April 6, 1999, without complaint or evidence of any problem, at 9:30 a.m., on April 6, 1999, a swelling in the area of the resident's knees was noticed. X-rays of both legs were taken which reflected fractures of both femurs. The resident was taken to the hospital where surgery was done to reduce the fractures. In Ms. O'Connell's opinion, and based on the information the facility had on the resident to the effect she had a low safety awareness and needed total supervision, the facility, through its employee, was negligent in placing the resident on the side of the bed with the rails down and thereafter turning away from her. Amy Weyant, the facility’s assistant director of nursing, also reviewed the facility’s records regarding the residents in issue here. These records, as to Resident 2, reflect that on February 12, 1999, when she first came to the facility, she was evaluated for risk of falls and found to be at risk. A care plan was developed for this resident which provided that whenever the resident was to be moved, two individuals were required to do so. The evaluation also considered the resident’s stability while in a sitting position and it was noted that the resident maintained her balance for sitting without any difficulty, but had poor standing balance and was unable to walk. Resident 3 was also, at the time of the incident, an 85-year-old female diagnosed with osteoarthritis and degenerative joint disease. A quarterly MDS was completed for this resident on January 29, 1999, which described her as requiring extensive assistance with one person to physically assist with transferring and ambulation. The care plan developed for this resident on November 13, 1998, noted the resident had a history of falls and was a risk for further falls due to her poor safety awareness and chronic pain in her back and knees. After the resident sustained a fall on August 24, 1998, an approach calling for her to be supervised when out of bed was identified. The resident was to be placed in a wheel chair when out of bed so that she could be kept at or near the nurses’ station. Unfortunately, this procedure was not added to the prevention care plan. Review of the nurses’ notes regarding this resident reveals that she fell in the bathroom on March 5, 1999. Investigation into the incident indicated that the CNA responsible for this resident was in the resident’s room getting clothes for her from her closet at the time of the fall. As a result of this fall, the resident sustained a fractured hip, for which she was transported to the hospital. According to Ms. Weyant, this resident was also assessed for stability in a sitting position prior to the fall and was found to require physical support because she was unable to follow directions. The resident’s rest room was equipped with hand rails and a call bell. Since the incident in question, the resident has again been evaluated for stability in a sitting position and found to be able to sit without fear of falling. Ms. Weyant also noted that both the residents in issue sustained their falls from a sitting position. While their stability while sitting was questionable, at no time, prior to the falls in issue here had either fallen from a sitting position. Ms. Weyant reports that even notwithstanding the falls sustained, the families or doctor/caregivers of these residents considered the facility reliable enough for the residents to be returned there after release from the hospital. The facility was resurveyed on May 17, 1999, and was found to have cleared all deficiencies as of that date or even earlier. The facility earlier had made a "credible allegation" that it would be in compliance by May 9, 1999. On the May 17, 1999, follow-up, it was found to be in compliance with an effective date of compliance of May 9, 1999. It is a goal of nursing homes to provide necessary care in an environment that is "as normal as possible." The facility must balance the residents’ need for care with the residents’ desire for independence. One of the issues faced by nursing home personnel is to balance restraint against freedom. This requires the facility to develop a method of care designed to prevent falls and injury. Respondent contends that the Administrative Complaint is based on the fact that two falls occurred, and urges that falls are common in nursing homes. The mere fact that an fall occurred does not form the basis for an inspection write-up. The write-up, when done, is based on the qualified surveyor’s determination that there was a lack of necessary supervision. If a facility has done an appropriate assessment and developed a plan to provide necessary supervision, and if the facility has complied with all the provisions called for in the care plan, a subsequent injury to a resident would not result in a deficiency write-up. To ensure as best as is possible against injuries, most nursing homes assign a CNA to every resident. In both cases in issue here, a CNA was assigned to each resident. Sometimes a CNA remains assigned to a particular resident for an extended period. When that happens, a relationship often develops between them through which the CNA gets to know the needs and peculiarities of the resident. In these cases, Ms. O’Connell opines that the facility’s fault lay in its failure to use its own identified interventions: In the one case, the failure to use side rails as called for in the care plan; and in the other, the failure of the CNA to remain in the bathroom with the resident providing the constant supervision called for. In both cases, this translates to an inappropriate lack of supervision, and Ms. O’Connell classified both incidents as Class II deficiencies.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care Administration enter a final order rescinding the issuance of the Class II deficiencies noted and the Conditional license issued, and determining that Emerald Oaks is entitled to the issuance of a standard rating for the period from April 9, 1999 to May 9, 1999. DONE AND ENTERED this 26th day of May, 2000, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of May, 2000. COPIES FURNISHED: Karel L. Baarslag, Esquire Agency for Health Care Administration Post Office Box 60127 Fort Myers, Florida 33906-6127 Jay Adams, Esquire Broad & Cassel 215 South Main Street, Suite 400 Post Office Box 11300 Tallahassee, Florida 32302 Julie Gallagher, General Counsel Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308
