Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, petitioner University Home Foundation, Inc., d/b/a Convalescent Center of Gainesville, was a nursing home providing skilled nursing care to Medicaid eligible patients. Petitioner was certified to participate in the Florida Medicaid Program. Respondent is the agency responsible for the administration and payment of Medicaid funds. An eligible entity is required to maintain adequate business records capable of audit by the respondent. Fiscal Year 1975 Petitioner filed with the respondent its cost report for the fiscal year January 1, 1975 to December 31, 1975, claiming reimbursable expenses of some $737,000. After an audit of the cost report by respondent, petitioner was informed in January of 1979 that adjustments amounting to approximately $131,000 were necessary and that petitioner was responsible for an overpayment of $56,183. Petitioner was advised by the respondent that its accounting records for the 1975 fiscal year were maintained in an incomplete and unsatisfactory manner. At the time petitioner's Administrator, Paul C. Allen, received this audit report, he did not have access to the work papers of the certified public accountant who prepared the cost report, but he did have access to the nursing home's financial records. As noted in the Introduction, petitioner is not contesting all the audit adjustments made by the respondent to its 1975 cost report. It is contesting only those disallowances of expenses relating to two automobiles and a mobile telephone, life and general insurance, a $20,000 bonus to the owner, social security taxes, a directory advertisement, interest, food and depreciation. Automobiles and mobile telephone. While allowing automobile expenses claimed for a 1969 Dodge Dart (used by the kitchen and maintenance staff for purchasing supplies) and a 1973 Ford station wagon (used mainly to transport patients), the respondent's auditor disallowed expenses claimed for a 1973 Cadillac (11 months) and a 1975 Lincoln Continental (1 month), as well as the expenses related to a telephone in these cars. The auditor concluded that these automobiles were used by the owner for personal use, were not related to patient care and that the expenses claimed were not documented. Administrator Paul C. Allen admitted that he drove these cars between the nursing home and his residence located 22 miles away and that he did not keep mileage logs for those vehicles. He estimates that 52 percent of the use of the automobiles was directly related to the nursing home business and patient care, and reimbursement is sought for this amount. This estimate is derived from starting with an average of 25,000 miles per year which the cars were driven, and deducting the 44 mile round trip to and from the Administrator's residence for 260 working days in a calendar year, resulting in 11,440 miles of the car's use for personal purposes. The remaining mileage, 13,560 (52 percent of 25,000) is claimed as being used for nursing home business or patient care. A telephone in these cars was also claimed as a reimbursable expense inasmuch as it was used like a "pager" when the Administrator was not on the nursing home premises. This mobile telephone expense, as well as the interest claimed, was disallowed by the respondent's auditor on the basis that it was an unnecessary cost of running a nursing home and was not directly related to patient care. Insurance. On its cost report, petitioner claimed expenses for a general hospitalization insurance policy on its employees and a life insurance policy on the Administrator. No supporting documentation was offered on the general insurance, and this expense was consequently disallowed because there was no indication that such insurance coverage was ever furnished. According to the Administrator, the mortgage loan commitment for the nursing home required that a $100,000 life insurance policy be maintained on the owner/Administrator to secure repayment of the loan in the event of his death. The documentation for such a requirement was not available to the Administrator because the nursing home was refinanced in 1976. Expenses claimed for life insurance on Mr. Allen was disallowed because the $100,000 life insurance policy constituted a fringe benefit to the owner, and the nursing home was at least an indirect beneficiary of an insurance policy on the Administrator. Bonus to owner and taxes. While petitioner contests the respondent's disallowance of a $20,000 bonus to the owner and $3,893 claimed as expenses related to the payment of social security taxes, no competent evidence was presented by the petitioner on these two items. In fact, Administrator Allen could not recall whether or not he received a bonus in 1975, and petitioner's expert accountant did not know what was actually paid to petitioner's staff in 1975. The $20,000 bonus was adjusted out by the respondent because it exceeded the amount allowable as an owner's salary. The tax expenses disallowed were those which exceeded the comparison between petitioner's general ledger and the payroll tax returns. Food expenses. While the respondent's auditors were able to verify from invoices approximately $63,800 claimed by petitioner as food expenses, there was no supporting documentation for the remaining $848 claimed. Petitioner was unable to provide such documentation at the hearing. Depreciation expense. Normally, an asset is capitalized and expensed or depreciated when it is incurred or installed. The fire sprinkler system for the petitioner's nursing home was capitalized in May of 1974, but payment on the system was expensed again in 1975. The petitioner provided no supporting documentation for this expenditure. Directory advertisement. According to Mr. Allen, the petitioner spent $317 for an advertisement in the yellow pages of a local telephone directory. The ad consisted of a small box to show the address of the facility for the benefit of the families of present and future patients. The ad itself was not produced as evidence at the hearing. Expenses for yellow page advertisements are allowed when the ads inform the public of the services which are provided. Such expenses are not allowed when the contents of the ad are not related to patient care or when the ad is in excess of what other nursing homes in the same geographic location are using. No evidence was produced as to other nursing home directory advertisements in the area. Fiscal Year 1979 Apartment rental. For the 1979 fiscal year, the petitioner claimed as an allowable expense the sum of $1,190 paid as apartment rental for the Administrator's son who performed maintenance duties for the nursing home. The Administrator testified that the apartment was near the facility, that a maintenance person needed to be on call 24 hours a day, and that the rental amount was considered part of the son's compensation for his duties with the nursing home. This expense was disallowed by the respondent inasmuch as there was not sufficient supporting documentation to illustrate that the rental costs were part of the services provided to the nursing home. Since the $1,190 was paid to a related party for the cost of apartment rental, it must be demonstrated that such costs do not exceed the price of comparable services or supplies which could be purchased elsewhere. There was nothing in the rental agreement to indicate that payment of the rent was considered part of the lessee's salary by the nursing home to assure 24 hours of maintenance care, nor was any other documentary evidence adduced to this effect. Travel. In its 1979 cost report, petitioner claimed travel expenses for trips taken by the Administrator and his wife to Hawaii, Mexico and Australia. It was alleged that these trips were taken for educational purposes. While expenses for the Hawaii program were allowed, respondent did not allow $3,528 claimed as expenses for the trips to Australia and Mexico. Petitioner presented an agenda of the program relating to the Australia trip which revealed that the program was in connection with the annual meeting of INTERCARE, an international nonprofit association dedicated to the improved quality of life for the convalescent and chronically ill. No evidence was produced relating to the trip to Mexico. The respondent disallowed expenses relating to the trips to Mexico and Australia taken by the Administrator and his wife on the basis that such expenses were unreasonable and unnecessary. It was not considered prudent for a nursing home administrator to travel this extensively and claim reimbursement in his Medicaid nursing home cost report. Respondent also considered the fact that a portion of the expenses claimed were for a party related to the owner/Administrator. Business entertainment. The respondent disallowed $565 claimed by petitioner as business entertainment, because this amount related to liquor purchased for an employee Christmas party. Expenses claimed for food for that social function were allowed by the respondent. Loss on sale of fixed asset. Petitioner claimed as an expense the loss it realized from a wrecked 1979 Lincoln automobile. It was requested that the loss be added to the cost of the new replacement vehicle, also a 1979 Lincoln, for depreciation purposes and recovered over the useful life of such vehicle through depreciation write-offs. Whether or not either of the 1979 Lincoln's were allowed for reimbursement purposes was not established at the hearing. According to the Health Insurance Manual 15, gains or losses realized from the exchange or trade-in of depreciable assets are not included in the determination of allowable costs. Proprietor's compensation. The respondent disallowed the amount of $15,000 claimed by the petitioner as compensation for the Director of Social Services for the third and fourth quarters of 1979. That position was held by the Administrator's wife, Marjorie Allen, who also was a 95 percent stockholder in the corporation which owned the nursing home. According to Mrs. Allen, the duties she performed as social services director, a full-time position, included the transporting of patients to medical appointments, the taking of social histories from newly admitted patients, working with the patients and their families and working with different organizations and agencies. The petitioner's facility also had an Activities Director in 1979, who assisted in such things as crafts and sewing and cooking classes. The $15,000 was disallowed by respondent because there was no supporting documentation produced that the salary related to patient care, because Mrs. Allen was a related party and because there appeared to be a duplication of services between the Activities Director and the Social Services Director. Medicare adjustment. Adjustments for Medicare can be made to reflect changes resulting from Medicare audits in the year that the differences become known. The recomputation is performed in the provider's cost report for the year in which the difference becomes known. Petitioner did introduce evidence that the Medicare adjustment for 1979 should be $119,398 in lieu of the respondent's adjustment of $123,648. As of the date of the hearing, respondent had not been afforded the opportunity to review the final adjusted Medicare cost report.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that a Final Order be entered finding the petitioner liable for the overpayments set forth in the final audit reports of the petitioner's Medicaid cost reports for 1975 and 1979, less any adjustment required for the 1979 Medicare cost report. Respectfully submitted and entered this 22nd day of June, 1983, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of June, 1983. COPIES FURNISHED: Mitzie Cockrell Austin, Esquire Scruggs & Carmichael One Southeast First Avenue Post Office Drawer C Gainesville, Florida 32602 Joseph L. Shields, Esquire Office of Audit & Quality Control Services Department of Health and Rehabilitative Services Building One, Room 406 1323 Winewood Blvd. Tallahassee, Florida 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
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 In an attachment to the joint prehearing stipulation filed on February 18, 1996, the parties describe their resolution of all issues in these consolidated cases with the exception of this issue: Whether the Agency for Health Care Administration, through audit adjustments, properly removed working capital interest from the patient care cost centers and reallocated those costs to the operating cost centers of the individual providers.
Findings Of Fact Petitioners are individual nursing homes participating in the Florida Medicaid program. They are separate providers in the program but are all owned by Florida Convalescent Centers, Inc. (FCC). Respondent, State of Florida Agency for Health Care Administration (AHCA) is the agency responsible for administration and implementation of the Medicaid program in Florida. Title XIX of the Social Security Act (Title XIX) is the matching entitlement program, now known as Medicaid, which provides medical assistance for eligible low-income persons. Within broad federal guidelines, states are given the authority to establish eligibility standards, define the scope of services, establish reimbursement rates and generally administer their own program. One requirement of Title XIX is that a state plan for medical assistance must provide for payment of nursing facility services through rates that "are reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities..." (42 USC 1396(a)). Florida's reimbursement methodology has been approved by the Health Care Financing Administration of the U.S. Department of Health and Human Services. Florida's Medicaid reimbursement methodology requires that a provider file an annual cost report which summarizes all costs by cost centers for a given reporting period. The three Medicaid cost centers are: operating costs, patient care costs and property costs, which are defined, respectively, in the Florida Title XIX Long Term Care Reimbursement Plan: Medicaid Nursing Home Operating Costs: [Those costs not directly related to patient care or property costs], such as administrative, plant operation, laundry and housekeeping costs. Return on equity or use allowance costs are not included in operating costs. Medicaid Nursing Home Patient Care Costs: Those costs [directly] attributed to nursing services, dietary costs, and other costs [directly] related to patient care, such as activity costs, social services, and all medically-ordered therapies. Medicaid Nursing Home Property Costs: Those costs related to the ownership or leasing of a nursing home. Such costs may include property taxes, insurance, interest and depreciation, or rent. [Petitioners' exhibit no. 5, page 85, emphasis added] The historical costs reported by the provider are used to compute a separate per-patient day cost for each of the three cost centers. The per diem rates are then added to create a comprehensive per diem rate which is used to prospectively compensate the provider. For example, a provider's costs for 1992, reported in its 1992 cost report, are used to set the 1993 per diem rate. Among the regulatory objectives of the reimbursement plan is cost containment. To further this objective, the plan provides for cost ceilings and targets in each of the cost centers. The ceilings and targets are derived from data collected from all providers in Florida's Medicaid program. The ceiling rates are the maximum amount any provider can be reimbursed, based on its geographical location and size. Provider reimbursement is also limited by facility-specific target rates based on historical data and rates for the individual facility. Year to year increases in the per diems for the three cost centers are permitted to reflect the inflation rate above an established base rate. In compliance with the reporting requirements of the reimbursement plan, FCC's in-house controller, Charles Wysocki, prepared Petitioners' 1992 cost reports. They were then reviewed and signed by a Florida CPA, Joseph Mitchell. In the cost reports, on Schedule C, Mr. Wysocki with the concurrence of Mr. Mitchell, reclassified working capital interest from the property cost center to the patient care and operating cost centers based on the ratio of the total salaries in each to the total salaries for the provider facility. This salary-based allocation method was selected because salaries account for the single largest expenditure in a nursing home, generally 65 - 70 percent, and as high as 86 percent of the total costs for some FCC providers. As part of AHCA's routine review, the agency engaged a nationally- recognized accounting firm, DeLoitte and Touche, to audit the Medicaid cost reports submitted by FCC. The purpose of the review and audits is to assure that only allowable costs are included, that the costs have been properly classified and that the data used to calculate future reimbursement is correct in all material respects. The treatment of working capital interest was one of several issues identified in the audit of FCC's 1992 cost report, but it is the only issue remaining now for resolution. At the time of the audit DeLoitte and Touche was under the impression that the working capital loans were "related party" loans which are treated differently for reimbursement purposes than loans that are "arms-length" between non-related parties. The working capital interest cost was disallowed altogether. After review by the agency an audit report was issued with citations to the authorities supporting the adjustment in the audit. Later in the audit review process the agency conceded that the problem was not "related party" loans and that the working capital interest was a reimbursable cost. However, the agency disputed the allocation of the interest and adjusted Petitioners' cost reports to allocate the interest to the operating cost center. There are three authorities for treatment of Florida Medicaid nursing home costs. The parties concur that the first and primary authority is the Florida Title XIX Long Term Care Reimbursement Plan (Plan). If an issue is not addressed in the Plan, then the next resort is to the Provider Reimbursement manual (HIM-15). Finally, if the issue remains unresolved, providers and the Agency rely on Generally Accepted Accounting Principles (GAAP). The Plan does not specifically address allocation of working capital interest, although it does provide some guidance in the definitions described in paragraph 4, above, and in this language: B. Setting prospective reimbursement per diems and ceilings. The department shall: * * * 4. Determine allowable Medicaid property costs, patient care costs, and return on equity or use allowance. Patient care costs include those costs directly attributable to nursing services, dietary costs, activity costs, social services costs, and all medically- ordered therapies. All other costs, exclusive of property cost and return on equity or use allowance costs, are considered operating costs. . . . (Petitioners' exhibit no. 5, page 45) The guidance found in HIM-15 is much more specific. For example, Section 2806.2 provides: Costs Excluded from Capital-Related Costs. This section sets forth some of the costs that are excluded from capital-related costs. To the extent that these costs are allowable they may be included in determining each provider's operating costs. Exclusions from capital-related costs include: * * * c. interest expense incurred to borrow working capital [for working expenses]; * * * [emphasis added] HIM-15, Section 2338, cited in the agency's audit report, provides: C. Interest expense incurred on funds borrowed for operating expenses must be allocated with administrative and general expenses. . . . Definitions found in Section 2102 of HIM-15 establish that reasonable costs take into account both direct and indirect costs of providers of services and that costs related to patient care include administrative costs. Costs that are neither directly nor indirectly related to patient care are not allowable in computing reimbursable costs. (Petitioners' exhibit number 2, Sections 2102.1, 2102.2 and 2102.3). The loans which generated the interest costs at issue here were obtained by the provider facilities to meet operating shortfalls. When a new facility opens there are almost all the expenses of a fully-staffed nursing home, but until the patient beds are filled, there is insufficient revenue to cover the expenses. FCC's methodology of allocating working capital interest based on salaries resulted in allocating those interest costs to both the patient care cost center and operating cost center, with most going to the patient care cost center. For example, 86 percent of salaries on the cost report for Palm Garden of Ocala for the year ending 12/31/92 were in the patient care cost center, so 86 percent of the working capital interest was allocated to patient care rather than the operating cost center. There is a substantial incentive for providers to shift costs from one center to another to avoid the ceilings. If the provider's reimbursement for operating cost is capped, but its patient care cost is not yet at the ceiling, then shifting costs from operating to patient care increases the total reimbursement to the provider. From the record it is impossible to determine exactly how the loan funds were expended by each provider. The monies were deposited into the general operating accounts of the providers and were used to cover operating shortfalls. In 1989, 1990 and 1991, the three years preceding the year at issue, the agency permitted FCC to allocate working capital interest in the same manner that FCC allocated that cost in its 1992 cost reports. However, the three preceding years' treatment was the outcome of a settlement agreement between the parties wherein each gave up some issues. Except in the context of settlement, the agency has steadfastly maintained its position that working capital interest must be allocated in the operating cost center. Prior cases with other providers have involved adjustments to move the working capital interest costs from the property cost center rather than from the patient care cost center.
Recommendation Based on the foregoing it is hereby: RECOMMENDED: That the Agency for Health Care Administration enter its Final Order adopting the parties' settlement agreement and approving the agency's audit adjustments related to allocation of working capital interest. DONE and RECOMMENDED this 26th day of April, 1996, in Tallahassee, Florida. MARY CLARK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of April, 1996. APPENDIX TO RECOMMENDED ORDER, CASES NOS. 94-6893 - 94-6906 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Adopted in paragraph 8. Rejected as unnecessary. 3.-4. Adopted in part in paragraph 11, otherwise rejected as irrelevant or immaterial. 5.-7. Adopted in part in paragraph 9, otherwise rejected as irrelevant or immaterial. 8. Rejected as irrelevant or immaterial. 9.-10. Adopted in substance in paragraph 18. Rejected as unnecessary. Rejected as unnecessary and argument. Rejected as contrary to the weight of evidence. Rejected as contrary to the weight of evidence. Moreover, it is immaterial since HIM-15 and the Plan are applied, not general principles in this case. Adopted in paragraph 13. Adopted in paragraph 4. Adopted in paragraph 5. Adopted in paragraph 6. Adopted in paragraph 7. 20.-23. Adopted in part in paragraph 14, otherwise rejected as immaterial. Rejected as unnecessary. Adopted in part in paragraph 17, otherwise rejected as unnecessary. 26.-31. Rejected as immaterial. 32. Adopted in part in paragraph 16, otherwise rejected as unnecessary. 33.-34. Rejected as unnecessary or immaterial. The interest addressed in paragraphs A and B is distinguished from working capital interest. Rejected as an interpretation not supported by the greater weight of evidence. Rejected as immaterial. Addressed in conclusion of law, paragraph 29. 38.-39. Rejected as argument and contrary to the greater weight of evidence. Rejected as argument or unnecessary. Rejected as argument. 42.-45. Rejected as immaterial. It is unnecessary to apply GAAP here. Rejected as unnecessary. Adopted in paragraph 22. 48.-51. Rejected as argument that is unsupported by the weight of evidence. 52. Adopted in summary in paragraph 20. 53.-54. Rejected as immaterial. Respondent's Proposed Findings of Fact. Adopted in paragraphs 1 and 2. Adopted in paragraph 4. Adopted in paragraph 9. Adopted in paragraph 10. 5.-6. Adopted in substance in paragraph 11. Adopted in paragraph 13. Adopted in substance in paragraphs 14 and 15. Adopted in paragraph 16. Addressed in conclusion of law, paragraph 29. Adopted in paragraph 15. Adopted in part in paragraph 6, otherwise rejected as unnecessary. Adopted in part in paragraph 4. Rejected as unnecessary. 15.-18. Adopted in paragraph 4. Adopted in substance in paragraph 6. Rejected as unnecessary. COPIES FURNISHED: Gerald B. Sternstein, Esquire RUDEN, BARNETT, MCCLOSKY, SMITH SHUSTER & RUSSELL, P.A. 215 South Monroe Street, Suite 815 Tallahassee, Florida 32301 Harold M. Knowles, Esquire KNOWLES & RANDOLPH 528 East Park Avenue Tallahassee, Florida 32301 Jerome Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308-5403 Sam Power, Agency Clerk Agency for Health Care Administration Ft. Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403
The Issue The issues for determination are: (1) whether the noncompliance as alleged during the August 30, 2001, survey and identified as Tags F324 and F242, were Class II deficiencies; (2) whether the "Conditional" licensure status, effective August 30, 2001, to September 30, 2001, based upon noncompliance is appropriate; and (3) whether a fine in the amount of $5,000 is appropriate for the cited noncompliance
Findings Of Fact Charlotte is a nursing home located at 5405 Babcock Street, Northeast, Fort Myers, Florida, with 180 residents and is duly licensed under Chapter 400, Part II, Florida Statutes. AHCA is the state agency responsible for evaluating nursing homes in Florida pursuant to Section 400.23(7), Florida Statutes. As such, in the instant case it is required to evaluate nursing homes in Florida in accordance with Section 400.23(8), Florida Statutes (2000). AHCA evaluates all Florida nursing homes at least every 15 months and assigns a rating of standard or conditional to each licensee. In addition to its regulatory duties under Florida law, AHCA is the state "survey agency," which, on behalf of the federal government, monitors nursing homes that receive Medicaid or Medicare funds. On August 27 through 30, 2001, AHCA conducted an annual survey of Charlotte's facility and alleged that there were deficiencies. These deficiencies were organized and described in a survey report by "Tags," numbered Tag F242 and Tag F324. The results of the survey were noted on an AHCA form entitled "Statement of Deficiencies and Plan of Correction." The parties refer to this form as the HCFA 2567-L or the "2567." The 2567 is the document used to charge nursing homes with deficiencies that violate applicable law. The 2567 identified each alleged deficiency by reference to a Tag number. Each Tag on the 2567 includes a narrative description of the allegations against Charlotte and cites a provision of the relevant rule or rules in the Florida Administrative Code violated by the alleged deficiency. To protect the privacy of nursing home residents, the 2567 and this Recommended Order refer to each resident by a number (i.e., Resident 24) rather than by the name of the resident. AHCA must assign a class rating of I, II or III to any deficiency that it identifies during a survey. The ratings reflect the severity of the identified deficiency, with Class I being the most severe and Class III being the least severe deficiency. There are two Tags, F242 and F324 at issue in the instant case, and, as a result of the August 2001 survey, AHCA assigned each Tag a Class II deficiency rating and issued Charlotte a "Conditional" license effective August 30, 2001. Tag F242 Tag F242 generally alleged that Charlotte failed to meet certain quality of life requirements for the residents, based on record review, group interviews, and staff interviews, and that Charlotte failed to adequately ensure that the residents have a right to choose activities that allow them to interact with members of the community outside the facility. On or about August 24, 2001, AHCA's surveyors conducted group interviews. During these interviews, 10 of 16 residents in attendance disclosed that they had previously been permitted to participate in various activities and interact with members of the community outside the facility. They were permitted to go shopping at malls, go to the movies, and go to restaurants. Amtrans transportation vans were used to transport the residents to and from their destinations. The cost of transportation was paid by Charlotte. An average of 17 to 20 residents participated in those weekly trips to dine out with other community members at the Olive Garden and other restaurants. During those trips, Charlotte would send one activity staff member for every four to six residents. The record contains no evidence that staff nurses accompanied those select few residents on their weekly outings. The outings were enjoyed by those participants; however, not every resident desired or was able to participate in this particular activity. Since 1985, outside-the-facility activities had been the facility's written policy. However, in August 2000, one year prior to the survey, Matthew Logue became Administrator of the facility and directed his newly appointed Activities Director, Debbie Francis, to discontinue facility sponsored activities outside the facility and in its stead to institute alternative activities which are all on-site functions. Those residents who requested continuation of the opportunity to go shopping at the mall or dine out with members of the community were denied their request and given the option to have food from a restaurant brought to the facility and served in-house. The alternative provided by the facility to those residents desiring to "interact with members of the community outside the facility" was for each resident to contact the social worker, activity staff member, friends or family who would agree to take them off the facility's premises. Otherwise, the facility would assist each resident to contact Dial-A-Ride, a transportation service, for their transportation. The facility's alternative resulted in a discontinuation of all its involvement in "scheduling group activities" beyond facility premises and a discontinuation of any "facility staff members" accompanying residents on any outing beyond the facility's premises. As described by its Activities Director, Charlotte's current activities policy is designed to provide for residents' "interaction with the community members outside the facility," by having facility chosen and facility scheduled activities such as: Hospice, yard sales, barbershop groups for men and beautician's day for women, musical entertainment, antique car shows, and Brownie and Girl Guides visits. These, and other similar activities, are conducted by "community residents" who are brought onto the facility premises. According to the Activities Director, Charlotte's outside activities with transportation provided by Amtrans buses were discontinued in October of 2000 because "two to three residents had been hurt while on the out trip, or on out-trips."1 Mr. Logue's stated reason for discontinuing outside activities was, "I no longer wanted to take every member of the activities department and send them with the resident group on an outing, thereby leaving the facility understaffed with activities department employees." The evidence of record does not support Mr. Logue's assumption that "every member of the facility's activities department accompanied the residents on any weekly group outings," as argued by Charlotte in its Proposed Recommended Order. Charlotte's Administrator further disclosed that financial savings for the facility was among the factors he considered when he instructed discontinuation of trips outside the facility. "The facility does not sponsor field trips and use facility money to take people outside and too many staff members were required to facilitate the outings." During a group meeting conducted by the Survey team, residents voiced their feelings and opinions about Charlotte's no longer sponsoring the field trips on a regular basis in terms of: "feels like you're in jail," "you look forward to going out," and being "hemmed in." AHCA's survey team determined, based upon the harm noted in the Federal noncompliance, that the noncompliance should be a State deficiency because the collective harm compromised resident's ability to reach or maintain their highest level of psychosocial well being, i.e. how the residents feel about themselves and their social relationships with members of the community. Charlotte's change in its activities policy in October of 2000 failed to afford each resident "self- determination and participation" and does not afford the residents the "right to choose activities and schedules" nor to "interact with members of the community outside the facility." AHCA has proved the allegations contained in Tag F242, that Charlotte failed to meet certain quality of life requirements for the residents' self-determination and participation. By the testimonies of witnesses for AHCA and Charlotte and the documentary evidence admitted, AHCA has proven by clear and convincing evidence that Charlotte denied residents the right to choose activities and schedules consistent with their interests and has failed to permit residents to interact with members of the community outside the facility. Tag F324 As to the Federal compliance requirements, AHCA alleged that Charlotte was not in compliance with certain of those requirements regarding Tag F324, for failing to ensure that each resident receives adequate supervision and assistance devices to prevent accidents. As to State licensure requirements of Sections 400.23(7) and (8), Florida Statutes (2000), and by operation of Florida Administrative Code, Rule 59A-4.1288, AHCA determined that Charlotte had failed to comply with State established rules, and under the Florida classification system, classified Tag F324 noncompliance as a Class II deficiency. Based upon Charlotte's patient record reviews and staff interviews, AHCA concluded that Charlotte had failed to adequately assess, develop and implement a plan of care to prevent Resident 24 from repeated falls and injuries. Resident 24 was admitted to Charlotte on April 10, 2001, at age 93, and died August 6, 2001, before AHCA's survey. He had a history of falls while living with his son before his admission. Resident 24's initial diagnoses upon admission included, among other findings, Coronary Artery Disease and generalized weakness, senile dementia, and contusion of the right hip. On April 11, 2001, Charlotte staff had Resident 24 evaluated by its occupational therapist. The evaluation included a basic standing assessment and a lower body assessment. Resident 24, at that time, was in a wheelchair due to his pre-admission right hip contusion injury. On April 12, 2001, two days after his admission, Resident 24 was found by staff on the floor, the result of an unobserved fall, and thus, no details of the fall are available. On April 23, 2001, Resident 24 was transferred to the "secured unit" of the facility. The Survey Team's review of Resident 24's Minimum Data Set, completed April 23, 2001, revealed that Resident 24 required limited assistance to transfer and to ambulate and its review of Resident 24's Resident Assessment Protocols (RAPs), completed on April 23, 2001, revealed that Resident 24 was "triggered" for falls. Charlotte's RAP stated that his risk for falls was primarily due to: (1) a history of falls within the past 30 days prior to his admission; (2) his unsteady gait; (3) his highly impaired vision; and (4) his senile dementia. On April 26, 2001, Charlotte developed a care plan for Resident 24 with the stated goal that the "[r]esident will have no falls with significant injury thru [sic] July 25, 2001," and identified those approaches Charlotte would take to ensure that Resident 24 would not continue falling. Resident 24's care plan included: (1) place a call light within his reach; (2) do a falls risk assessment; (3) monitor for hazards such as clutter and furniture in his path; (4) use of a "Merry Walker" for independent ambulation; (5) placing personal items within easy reach; (6) assistance with all transfers; and (7) give Resident 24 short and simple instructions. Charlotte's approach to achieving its goal was to use tab monitors at all times, to monitor him for unsafe behavior, to obtain physical and occupational therapy for strengthening, and to keep his room free from clutter. All factors considered, Charlotte's care plan was reasonable and comprehensive and contained those standard fall prevention measures normally employed for residents who have a history of falling. However, Resident 24's medical history and his repeated episodes of falling imposed upon Charlotte a requirement to document his records and to offer other assistance or assistive devices in an attempt to prevent future falls by this 93-year-old, senile resident who was known to be "triggered" for falls. Charlotte's care plan for Resident 24, considering the knowledge and experience they had with Resident 24's several falling episodes, failed to meet its stated goal. Charlotte's documentation revealed that Resident 24 did not use the call light provided to him, and he frequently refused to use the "Merry Walker" in his attempts of unaided ambulation. On June 28, 2001, his physician, Dr. Janick, ordered discontinuation of the "Merry Walker" due to his refusal to use it and the cost involved. A mobility monitor was ordered by his physician to assist in monitoring his movements. Charlotte's documentation did not indicate whether the monitor was actually placed on Resident 24 at any time or whether it had been discontinued. Notwithstanding Resident 24's refusal to cooperatively participate in his care plan activities, Charlotte conducted separate fall risk assessments after each of the three falls, which occurred on April 12, May 12, and June 17, 2001. In each of the three risk assessments conducted by Charlotte, Resident 24 scored above 17, which placed him in a Level II, high risk for falls category. After AHCA's surveyors reviewed the risk assessment form instruction requiring Charlotte to "[d]etermine risk category and initiate the appropriate care plan immediately," and considered that Resident 24's clinical record contained no notations that his initial care plan of April 23, 2001, had been revised, AHCA concluded that Charlotte was deficient. On May 13, 2001, Dr. Janick visited with Resident 24 and determined that "there was no reason for staff to change their approach to the care of Resident 24." Notwithstanding the motion monitors, on June 17, 2001, Resident 24 fell while walking unaided down a corridor. A staff member observed this incident and reported that while Resident 24 was walking (unaided by staff) he simply tripped over his own feet, fell and broke his hip. Charlotte should have provided "other assistance devices," or "one-on-one supervision," or "other (nonspecific) aids to prevent further falls," for a 93-year-old resident who had a residential history of falls and suffered with senile dementia. Charlotte did not document other assistive alternatives that could have been utilized for a person in the condition of Resident 24. AHCA has carried its burden of proof by clear and convincing evidence regarding the allegations contained in Tag F324.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Agency enter a final order upholding the assignment of the Conditional licensure status for the period of August 30, 2001 through September 30, 2001, and impose an administrative fine in the amount of $2,500 for each of the two Class II deficiencies for a total administrative fine in the amount of $5,000. DONE AND ENTERED this 13th day of February, 2003, in Tallahassee, Leon County, Florida. FRED L. BUCKINE 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 13th day of February, 2003.
Findings Of Fact Petitioner, Indigo Manor, is a Florida licensed nursing home and Medicaid provider. Petitioner is a long term provider, and the successor in interest in the facility originally built by Health Care and Retirement Corporation of America (HCRC). Petitioner's address is 595 Williamson Boulevard, Daytona Beach, Florida. Respondent is the single state agency responsible for administering the Florida Medicaid program pursuant to Section 409.913, Florida Statutes, and rules promulgated thereunder. Reimbursement to nursing homes is governed by the Florida Title XIX Long-Term Care Reimbursement Plan (the Plan). The Plan is adopted by reference by Rule 10C-7.0482, Florida Administrative Code. Under the Plan, long-term care providers are reimbursed under a prospective reimbursement methodology. Rates are projected for a rate semester based on historical cost data. The provider is either reimbursed for depreciation and interest or is reimbursed under the Fair Rental Value System ("FRVS") for the property cost component of the provider's rate. Under FRVS, reimbursement is based on the acquisition costs of a capital asset. These acquisition costs are indexed forward based on a portion of the rate of increase in the Dodge Construction Index. (See Long-Term Care Reimbursement Plan at Section V.E.I.a.) Nursing homes participating in the Medicaid program on October 1, 1985, when the FRVS was implemented, were allowed to base their reimbursement on depreciation of actual property and interest costs. Most facilities entering the program after October 1, 1985, were put on FRVS. To prevent any facility from receiving lower reimbursement under the FRVS method as opposed to the depreciation plus interest method, there was a transition period during which some facilities continued to be paid depreciation plus interest payments until the FRVS payments exceeded the depreciation and interest payments as specified in Section V.E.1.h. of the Plan. At that time, a facility would receive reimbursement under the FRVS method. (See Long-Term Care Reimbursement Plan at Section IV.D.) Frank D. Hughes, an expert in Medicaid reimbursement to nursing homes, testified in behalf of the Department. He identified a chart, Respondent's Exhibit 1, which shows that costs reimbursement to a provider may start at a higher reimbursement per diem than FRVS, but that component of the provider's total reimbursement rate will decline over time; and FRVS will start a provider at a lower initial rate, but the property component of the total reimbursement rate will increase over time. Section IV.D. of the Department's Plan limits applicability of the hold harmless/payback clause to facilities entering the Medicaid program after October 1, 1985, which had committed to construction or purchase loans prior to October 1, 1985. The Department's witness clarified that the Department interpreted the language "committed to construction or purchase loans" in the disjunctive, i.e., "committed to construction" or "committed to purchase loans" prior to October 1, 1985. Further, the witness clarified that the Department interpreted the language "committed to construction" to be limited to providers who were subject to legally enforceable agreements for construction or financing. The Department's rationale was that only those providers who were subject to legally enforceable agreements would be adversely effected by the Plan's new method, and needed that protection of the hold harmless/payback clause. Mr. Hughes clarified that, if enforceable commitments had been made for loans, the Department would consider the entity to have met the "commitment" requirement. Mr. Hughes also clarified that, if a provider was able to finance a construction project without loans and accomplish the construction itself, the Department would consider the provider "committed" to construction at the point it entered into subcontracts for the project, or alternatively, at the point actual construction of the facility was begun. A stated intent to build a nursing home or nonbinding preparation prior to October 1, 1985 was insufficient to establish a commitment to construction. In September through November 1985, Health Care and Retirement Corporation of America (HCRC) began the permitting process to construct the subject nursing home on property it owned in Daytona Beach, Volusia County, Florida. The Department conceded that HCRC, the predecessor of Indigo Manor, had taken certain actions towards constructing the facility to include purchasing the property, architectural and engineering drawings and plans, obtaining building permits, and obtaining a Certificate of Need. In November 1985, construction on the project actually began. On November 25, 1985, HCRC entered into a construction contract with a subsidiary of HCRC to construct the nursing home. Funds for construction were obtained through internal transfers at HCRC via lines of credit available to HCRC. It was conceded by Petitioner that there were no loans obtained for the construction of the facility. The facility was completed and enrolled in the Medicaid program in July 1987. At that time, it was placed on the FRVS for its property costs. Subsequently, in December of 1987, the facility was transferred to the cost reimbursement system, effective retroactively to its date of entry in July. There is no documentation in the Department's files to indicate the reason the change was made, and no documentation to indicate additional or revised information was submitted to the Department to justify the change. The facility remained on the cost basis until February 1992, when the Department reviewed the audits in the facility's reimbursement file and determined the facility should not have been changed to cost, but instead should have remained on FRVS. Revised rate sheets dated February 20, 1992, covering all rate setting periods since July 22, 1987, were provided to the Petitioner that advised Petitioner would have its rate recalculated using the FRVS method and indicated the amended rates. On June 1, 1992, Petitioner's accounting firm sent a letter to the Department's Medicaid Cost reimbursement Administrator stating the facility believed the Department made a mistake by recalculating the rates. The letter asked that the matter be reviewed and the "error" corrected. On June 22, 1992, Petitioner was advised that the Department had determined the amount of overpayment received by Indigo Manor based upon the recalculated rates. Petitioner was directed to repay $250,935.46 which represented the difference between the actual rate paid which used the cost reimbursement method, and the rate that should have been paid using the correct FRVS method. By letter dated June 23, 1992, Mr. Hughes explained that, based on the Florida Title XIX Long-Term Care Reimbursement Plan, facilities entering the Medicaid program after October 1, 1985, would have their property costs recognized under the FRVS method. The letter pointed out that the Plan held harmless only those new facilities that had committed to facility construction or purchase loans prior to October 1, 1985. The letter, Petitioner Exhibit 1-B, also stated: The Department has consistently interpreted "committed" to mean enforceable agreements regarding facility construction or purchase loans specific to the facility in question, e.g. a contract for construction or an agreement for purchase loans specific to the facility in question. Based on the Department's June 23, 1992 letter, Petitioner filed a request for formal proceedings pursuant to Section 120.57(1), Florida Statutes, to challenge the Department's determination it should be on FRVS. Subsequent to the filing of that petition, Indigo Manor filed the instant petition alleging the Department is relying on non-rule policy. As of the date of the hearing, the Department had not initiated rulemaking regarding its challenged statement of policy, and the Department offered no evidence showing that rulemaking was not feasible or practicable. Petitioner conceded the phrase "committed to construction or purchase loans" is found within 109C-7.0482, Section IV, D., Florida Administrative Code. Petitioner does not allege that 10C-7.0482, Florida Administrative Code, is not a validly promulgated rule. Petitioner further concedes that contracts were not executed for construction of the facility, and actual construction was not begun until after October 1, 1985. At the formal hearing, the Department did not dispute that Petitioner was substantially affected by the Department's action. The Department did argue, however, that Petitioner did not have standing to bring the instant action as it did not actually own the property or facility at issue, nor did it have a contract in effect with the owner, Health Care and Retirement Corporation (HCRC), prior to October 1, 1985. While the Petitioner did not own the facility, the Department recognizes that Petitioner is the successor in interest to HCRC and is the entity impacted by the Department's rule and Department's policy of construing the term "committed to construction" to be limited to enforceable contracts for construction or purchase loans. HCRC has no present interest in the facility, and the Department's action.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the stipulation of facts "entered into by all parties, the following relevant facts are found: Along with six other applicants, the petitioner, Health Quest Corporation, d/b/a Lake Pointe Woods Health Center, and the respondent, Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center, submitted applications for a Certificate of Need to construct and operate new nursing homes in Sarasota County, In June of 1982, the respondent Department of Health and Rehabilitative Services (HRS) determined to issue the application of Sarasota Health Care Center and deny the remaining seven applications. For the purposes of this proceeding, the parties have stipulated that there is a need for at least a 120-bed skilled and intermediate care nursing home in the Sarasota, Florida area. In November, 1982, respondent HRS adopted Rule 10- 5.11(21) , Florida Administrative Code, which provides a formula methodology for determining the number of nursing home beds needed in areas throughout the State. Briefly summarizing, this formula begins with a bed to population ratio of 27 per thousand population age 65 and over, and then modifies that ratio by applying a poverty ratio calculated for each district. The theoretical bed need ratio established for Sarasota County by this portion of the Rule's formula is 23.2 nursing home beds per thousand elderly population projected three years into the future. The population figures to be utilized in the formula are the latest mid-range projections published by the Bureau of Economic and Business Research (BEBR) at the University of Florida. After determining the theoretical need for nursing home beds in an area, the Rule purports to determine the actual demand for beds by determining the current utilization of licensed community nursing home beds, establishing a current utilization threshold and, if this is satisfied, applying a prospective utilization test too determine the number of beds at any given time. Applying the formula methodology set forth in Rule 10- 5.11(21) to Sarasota County results in a finding that there are currently 807 excess nursing home beds in that County. The need for sheltered nursing home beds within a life care facility are considered separately in Rule 10-5.11(22), Florida Administrative Code. Generally speaking, need is determined on the basis of one nursing home bed for every four residential units in the life care facility. Elderly persons 75 years of age and older utilize nursing homes to a greater extent than those persons between the ages of 65 and 74. Persons under the age of 65, particularly handicapped individuals, also utilize nursing home beds. The formula set forth in Rule 10-5.11(21) does not consider those individuals under the age of 65, and it does not provide a weighted factor for the age 75 and over population. In the past, the BEBR mid-range population projections for Sarasota County, compared with the actual census reached, have been low. Petitioner Health Quest, an Indiana corporation, currently owns and/or operates some 2,400 existing nursing home beds in approximately 13 facilities in Indiana. It holds several Certificates of Need for nursing homes in Florida and construction is under way. Petitioner owns 53 acres of land on the South Tamiami Trail in Sarasota, upon which it is constructing a 474-unit retirement center. It seeks to construct on six of the 53 acres a 120-bed nursing home adjacent to the retirement center. Of the 120 beds, it is proposed that 60 will be for intermediate care and 60 will be for skilled care. The facility will offer ancillary services in the areas of speech, hearing, physical, occupational, and recreational therapy. Thirty-five intermediate care beds would be classified as beds to be used for Medicaid recipients and the facility would be Medicare certified. Retirement center residents will have priority over nursing home beds. The total capital expenditure for the petitioner's proposed nursing home project was estimated in its application to be $3.1 million, with a cost per square foot of $46.29 and a cost per bed of approximately $26,000,00. As of the date of the hearing, the estimated capital expenditure for the petitioner's project as $3.9 million. The respondent Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center (QHF), is a Mississippi corporation and owns nursing homes in Tennessee, North Carolina and Haines City, Florida, the latter site having been opened in August of 1983. It also holds three other outstanding Certificates of Need. QHF proposes to construct a 120-bed nursing home containing intermediate and skilled care beds which will be equally available to all members of the community. It is anticipated that it will have approximately 65 percent Medicaid usage and 5 percent Medicare usage. Though it has not yet selected its site, QHF plans to utilize a four-acre site near the City of Venice in Sarasota County. At the time of the application, the total capital expenditure for QHF's proposed project was estimated to be $2.3 million. Its construction costs were estimated at $1.16 million or $33.14 per square foot. QHF's recently constructed Haines City nursing home facility was completed at a construction cost of $1.22 million, or $31.00, per square foot. The Sarasota County facility will utilize the same basic design as the Haines City facility. At the current time, the cost of construction would be increased by an inflation factor of about ten percent. As of the date of the hearing, the projected capital expenditure for QHF's Sarasota County proposed facility was approximately $2.6 million or about $21,000.00 per bed. The owners of QHF are willing and able to supply the necessary working capital to make the proposed nursing home a viable operation. As depicted by the projected interest and depreciation expenses, the QHF facility will have lower operating expenses than the facility proposed by petitioner, Health Quest. In Sarasota County, there is a direct correlation between high Medicaid utilization and high facility occupancy. The long term financial feasibility of a 120-bed nursing home in Sarasota County is undisputed, as is the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services in the health service area.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the application of Health Quest Corporation d/b/a Lake Pointe Woods Health Care, Inc. for a Certificate of Need to construct a 120-bed nursing home in Sarasota County be DENIED. It is further RECOMMENDED that the application of Quality Health Facilities Inc. d/b/a Sarasota Health Care Center for a Certificate of Need to construct a 120-bed nursing home facility in Sarasota County be GRANTED. Respectfully submitted and entered this 31st Day of October, 1983, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1983. COPIES FURNISHED: John M. Laird, Esquire 315 West Jefferson Blvd. South Bend, Indiana 46601 John T. C. Low, Esquire Paul L. Gunn, Esquire Low & McMullan 1530 Capital Towers Post Office Box 22966 Jackson, Mississippi 39205 James M. Barclay, Esquire Assistant General Counsel 1317 Winewood Blvd. Suite 256 Tallahassee, Florida 32301 David Pingree, Secretary Department of Health & Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
Findings Of Fact The Petitioner owns property in Dade County, Florida, located at 47 Northwest 32nd Place, Miami, Florida. Improvements have been erected on the property. The Petitioner leases the property and improvements to Flordean Nursing Home, Inc., a Florida corporation. The corporation operates a skilled nursing home on the premises, and pays a monthly rent of five hundred dollars to the Petitioner for the exclusive occupation of the property and improvements. The Petitioner is the president and majority stockholder of the corporation, and the administrator of the nursing home. The nursing home is licensed by the Florida Department of Health and Rehabilitative Services. The corporation provides extended care treatment and skilled nursing home services to its clients or patients. The clients pay a single charge for the services which include a room, nursing care, laundry, meals, activities, and medical attentions. Activities include movies, religious services, birthday and other holiday celebrations, and similar functions. The corporation does not and has never simply rented a room to any client. The nursing home is a commercial venture for profit, and it in fact makes a profit. The average age of the nursing home guests is 84. Typically they are admitted through physicians. They become permanent residents. They receive their mail at the home and typically do not leave until they die. The average stay is three years, five months. At the time of hearing the nursing home housed 52 guests in 19 rooms. The rooms are private, semiprivate and three in a room. The petitioner applied for a certificate of registration from the Florida Department of Revenue in June, 1968. The certificate was issued under sales tax number 23-08-102316-82. The Petitioner has paid sales taxes on the monthly rental payments that she has received from the corporation. She is seeking a refund of these taxes for the period from March 1, 1972 through and including May 30, 1978. The corporation does not collect sales taxes from the nursing home guests.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby, RECOMMENDED: That the Respondent enter a final order denying the petitioner's refund application. DONE and ORDERED this 9th day of January, 1979, in Tallahassee, Florida. G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph C. Mellichamp, III, Assistant Attorney General The Capitol, Rm. LL04 Tallahassee, Florida 32304 Jack R. Rice, Jr., Esquire P. O. Box 350838 2424 N. W. First Street Miami, Florida 33135
The Issue The issue presented for determination herein is whether or not F.A.C. Health Care, Inc., d/b/a Spring Hill Health Facility (Petitioner) is entitled to a Certificate of Need to establish a 60-bed nursing home to serve Hernando County.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at hearing, including the pre-hearing stipulation, the following relevant facts are found. F.A.C. Health Care, Inc. is a wholly-owned subsidiary of First American Corporation. First American Corporation has owned, operated and developed approximately 75 long-term care and retirement facilities over the past 15 years. These operations are primarily located in the southeastern United States. At present, First American Corporation operates 20 facilities and has seven Certificates of Need in the developmental stages. (TR. 35, Fulmer) On January 14, 1984, Petitioner filed an application with the Respondent for a Certificate of Need to construct and operate a community nursing home in the City of Spring Hill in Hernando County, at a total cost of $3,180,000. (Petitioner's Exhibit 1) The letter of denial accompanying the state agency action report dated April 30, 1984, noted the basis for denial as follows: Existing and approved bed capacity in Citrus/Hernando Counties is sufficient to satisfy projected need for 1986. There are 60 nursing home beds that have been approved but have not been constructed at the present time, which, when added to the existing nursing home bed supply in Citrus/Hernando Counties, will serve to satisfy a portion of the projected need for skilled nursing home beds in the sub-district through 1986. The proposed 120 beds are in excess of the 37 beds needed to reduce the prospective base utilization rate to a reasonable level by 1986. (TR. 36, Fulmer; Petitioner's Exhibit 2) On September 26, 1984, Petitioner amended its original application to reflect a reduction from 120 to 60 nursing home beds. Documents reflecting the corresponding reduction in project costs from 53,180,000 to 51,780,000 were submitted with the amended proposal. (Petitioner's Exhibit 3) FINANCIAL FEASIBILITY OF THE PROPOSED SPRING HILL FACILITY The immediate and long-term financial feasibility of a project is one criteria considered during the Certificate of Need review process. Section 381.494(6)(c)9., Florida Statutes. The total cost of the project of 51,780,000 appears reasonable and in line with similar projects. Funds for full 100 per cent financing of the project are available through industrial revenue bonds at 14 per cent interest over 30 years. In order to acquire an industrial revenue bond application, Petitioner would maintain a $150.000 debt service reserve fund. (Petitioner's Exhibit 3) Other methods of financing available to finance the subject project include conventional financing, syndicated equity programs and insurance investment programs. (Testimony of Fulmer at TR. 39-40) Due to the largely rural setting, projected utilization for the first year would be 81 per cent Medicaid, 5 per cent Medicare and 14 per cent private pay. Occupancy is projected to reach 97 per cent by the fifth full month of operation and would be supported in part by the increased utilization of nursing home beds as a direct result of the implementation of diagnostic related groupings. Pro forma statements for the first and second years of operation show a net operating profit beginning in the ninth month and continuing through the second year. The equipment costs, staffing patterns and personnel budget also appear reasonable for this type of project. METHODS AND CONSTRUCTION COSTS Another issue in this proceeding was whether Spring Hill satisfied the criteria in Section 381.494(6)(c)13., Florida Statutes, regarding the cost and methods of construction. Spring Hill's proposed facility will provide 11,981 square feet devoted to patient care and 9,710 square feet for administrative and common service areas at a construction cost of $41.50 per square foot. (Petitioner's Exhibit 3) Proposed construction costs and methods of construction efficiently minimize square footage space requirements and related construction costs and will permit the most efficient operation of the facility at a low per diem cost. The construction cost appears reasonable and is also supportive of a primarily Medicaid based facility. Finally, Respondent offered no evidence to controvert the reasonableness of construction costs and methods proposed by Petitioner. IMPACT ON HEALTH CARE COSTS Section 381.494(6)(c)12., Florida Statutes provides that as part of the Certificate of Need review, probable impact of the proposed project on the cost of providing health care services be considered. Petitioner's expert, Fulmer, urges that there would either be no impact on the cost of care or due to the availability of additional Medicaid beds, costs would be reduced since the private pay demands of family and relatives having to pay for the care of an individual rather than participating in the Medicaid program would reduce the costs of health care to the community rather than increase the financial burden. In this regard, Petitioner offered no evidence to substantiate the claim that the demand for Medicaid beds exceeded the supply, or that Medicaid patients had been refused health services by the available Medicaid health care providers. AVAILABILITY AND ACCESSIBILITY OF EXISTING SERVICES Hernando County lies within HRS District III which is composed of 16 counties in north-central Florida, stretching from the Gulf of Mexico north of Tampa to the Georgia border. (Petitioner's Exhibit 6) The District is further divided into sub-districts. Hernando County represents a separate sub-district. Petitioner's facility is proposed to be located in the City of Spring Hill, located in the fastest growing area of Hernando County. (Petitioner's Exhibits 1 and 2) The latest bulletin (No. 69) from the University of Florida, Bureau of Economic and Business Research, shows a 90 per cent projected growth between 1980 and 1990. Much of the population in the Spring Hill area falls in the 65 and older age bracket. County age group projections released by HRS on September 24, 1984, reveal that the elderly population of 65 and over in Hernando County in 1985 is projected as 17,616, or approximately 27 per cent of total population. By 1990, those projections will grow to 24,887 or approximately 29 per cent of total population. (Respondent's Exhibit 2) The growth trend in Hernando County is an extension of the rapid coastline development occurring in the New Port Richey- Clearwater areas and the counties to the south of Hernando. Previously, the only major development in Hernando County was centered in Brooksville, the middle of the county. Consequently, the existing community nursing home services in Hernando County are concentrated in the Brooksville area. Although Petitioner, through its expert (Konrad) testified that there is a mal-distribution of existing beds and community nursing home services which renders them neither available nor accessible to the rapidly growing elderly population in the southwestern Hernando County corridor and that high occupancy rates in existing community nursing homes in the area and the existence of waiting lists corroborates the lack of availability and accessibility of community nursing home services in the area, the evidence introduced herein failed to establish either the existence of waiting lists or that the existing community nursing homes in the area were overcrowded. SHELTERED VERSUS COMMUNITY NURSING HOME BEDS Petitioner contends that certain nursing home beds associated with the adult congregate living facility at Evergreen Woods in the Spring Hill area are not actually available and accessible to the general public but instead are functioning as sheltered nursing home beds. Respondent, on the other hand, considers the 60 nursing home beds associated with Evergreen Woods to be available and accessible to the general public. A review of the entire record compiled herein failed to substantiate Petitioner's claim that those beds at Evergreen Woods are unavailable and/or inaccessible to the general public. DETERMINATION OF NEED, SECTION 381.494(6)(c)1., FLORIDA STATUTES. In determining need for nursing home beds, a Certificate of Need project is reviewed on a 3-year planning horizon. In this case, predicted need for nursing home beds in District III and the sub-district of Hernando County is calculated through 1987. Hernando County is a single county sub-district located within in HRS planning District III in north central Florida. HRS has determined the overall nursing home bed need for District III as well as sub-district allocations by applying the uniform nursing home bed need methodology for community nursing home services contained in Florida Administrative Code Rule 10- 5.11(21). (Petitioner's Exhibit 5) Respondent provided a step-by-step application of the community nursing home bed need rule and introduced their exhibits supporting the calculation period (Testimony of expert medical facilities consultant, R. Jaffe and Respondent's Exhibits 1 and 2). Briefly stated, application of the pertinent rules reveals an extrapolated need for 31 beds which are available for CON approval based on data available to Respondent on June 29, 1984 and that 36 beds are available based on later data released on September 24, 1984. (TR. 91, Conrad; TR. 130, Jaffe and Petitioner's Exhibit 6) The census report applicable herein reflects that there were 360 licensed beds in the Hernando sub-districts and no approved beds for a total of 360 beds. 2/ Application of the nursing home bed need methodology is not the sole factor used in determining whether a CON application should be granted. Other factors, such as access, high occupancy rates, chronically underserved population and high Medicaid utilization are definite factors in approval of additional beds in cases where the rule shows either no need or only slight need. Respondent has, on several occasions, granted 60-bed applications where accessibility issues justified the grant of a minimum-sized facility in spite of the lesser numerical need indicated under the rules. 3/ Petitioner referred to instances wherein Respondent had granted approval for CON's in other districts where there were unusual circumstances such as accessibility issues as referred to herein above. A review of those cases reveals that a departure from the usual bed-need methodology is warranted in cases of extremely high occupancy rates (95 per cent or higher) or the facilities with lower occupancy rates, e.g. 85.7 per cent for homes in Sarasota County, which were located in inaccessible distances away from the population concentration. Petitioner has not demonstrated sufficient basis herein to warrant a departure from the usual bed need rule methodology. The instances wherein a departure from the usual bed need rule methodology has occurred are distinguishable, inasmuch as in the instant case, there are three existing facilities presently in Hernando County offering 360 nursing home beds. Current occupancy rate has been shown to be reasonable and is standing at or below average for District III. Additionally, Respondent introduced a "Stipulation of Settlement" dated September 28, 1984 which was entered into by and between Evergreen Woods Health Care Center and Respondent. The substance of that stipulation reveals that during October of 1983, Evergreen Woods Health Care Center (EWHCC) as Petitioner, filed an application with Respondent for a Certificate of Need to add 60 beds to its existing 60-bed nursing home located in Spring Hill, Hernando County, Florida. The application sought 45 community beds and 15 sheltered beds. As a means of amicably resolving that proceeding and based on available need data based on applicable quarterly census reports and application of the need criteria, EWHCC, as Petitioner in that proceeding, amended its Certificate of Need application filed October, 1983, to add a total of 60 beds to its existing facility; 31 beds to be designated as community beds and 29 to be designated as sheltered beds. A review of the public records reveal that the Certificate of Need has been issued (amended CON No. 2959 issued early October, 1984) pursuant to that stipulation of settlement. 4/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that: The application of First American Corporation d/b/a Spring Hill Health Facility for establishment of a 60-bed nursing home facility in Hernando County, Florida, be DENIED. RECOMMENDED this 14th day of February, 1985, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 1985.
Findings Of Fact Lake and Sumter Counties comprise a subdistrict of District III. Both the district and subdistrict have a sufficiently high occupancy rate of nursing homes to indicate a need for additional bed capacity considering both licensed and approved beds. This subdistrict has an above average percentage of elderly (over age 65) living in poverty and thereby qualifying for Medicaid. This increases the bed need ratio from 27 per 1,000 to 35.6 per 1,000 in this subdistrict. Applying the provisions of Rule 10-5.11(21), Florida Administrative Code, to the projected population over age 65 of this subdistrict results in a need for 1,522 beds in 1987. There are 931 licensed and approved beds in this subdistrict including the 15 beds approved for Eustis Limited Partnership in June, 1984. Since the current utilization of nursing home beds in the subdistrict exceeds 85 percent and both subdistrict and district indicate a need for additional bed capacity, the prospective base rate of utilization is 80 percent. From January through March, 1984, there were 684 licensed nursing home beds in this subdistrict. From April through June, this number increased by 120 to 804 licensed beds. In July 35 licensed beds were added and in August an additional 17 licensed beds were added. From these undisputed figures Respondent contends there is no need for additional beds, although its witness testified to a need for 41 additional beds when the bed need methodology of Rule 10-5.21 was applied to the latest data available (TR. Vol. II, page 253, 270) , and Petitioners contend that the application of this formula indicates a need from 41 to 85 additional beds. The formula in the rule which is used to determine prospective utilization and number of additional beds needed is: Up = PC where: Eb + Pb Up is prospective utilization of community nursing home beds (in this case not less than 80 percent) PC is the average patient census within the area during the T.est recent six months' period prior to the filing of the CON application(s) under consideration for which the Department has data available. Eb is the current number of licensed and approved community nursing home beds within the area (here 931). Pb is the number of additional beds being pro posed. (Pb must be low enough to keep Up at or above 0.80). Nursing homes submit monthly census reports to DHRS showing the number of patients in the nursing home on the first day of the month. A summary of those reports for this subdistrict is shown in Exhibit 30. The only factor in the formula on which there is any dispute is PC, the average census for the preceding six months. At the hearing DHRS contended that the definition in the rule respecting the census during the most recent six- month period prior to the filing of the CON application was controlling in this case; however, this position has now been abandoned by DHRS as not consistent with the concept of de novo proceedings and their customary practice of using the latest six-month data available prior to the hearing. If we use the latest six months data of patient census in this subdistrict available to DHRS to determine the average patient census for this period, those figures are shown on Exhibit 30 for 1/1/84 through 6/1/84. The average patient census for these six months is 4289 divided by 6 or 715. Since the latest nursing home beds approved in this subdistrict was the 15 approved in June, 1984, these 15 should be deducted from the 931 beds currently licensed and approved because they were authorized after this six-month period for which the average patient census is determined. Therefore, when using this average census figure, the beds licensed and authorized should be 916. Applying these figures to the prospective utilization formula in Finding of Fact No. 6 above, we have .80 = 715 916 + Pb Pb = 893-916 = 0 If, as proposed by Petitioners, we use the average patient census for the six-month period for which Petitioners submitted data, viz., 3/1/84 through 8/1/84, the average patient census is 4556 divided by 6 or 759. When this figure for PC is used in the utilization formula, we have .80 = 759 931 + Pb Pb = 949-931 = 18 Although it does not affect the total number of beds licensed and approved, during the month of July, 1984, 35 more beds were licensed and in August, 1984, an additional 17 beds were licensed. Petitioners obtain a different number for Pb by ignoring the definition of PC as given in Rule 10-5.11(21). To determine PC they would take the latest number of licensed beds, here 856, and multiply this by the occupancy rate of 93.3 percent to arrive at a patient census of 799 which, by reason of the arithmetic used to get the percentage of licensed beds occupied, is exactly equal to the patient census submitted by Petitioner for August 1, 1984. Applying this one-month patient census to the prospective utilization formula, they would show 67 additional beds are needed as follows: .80 = 799 931 + Pb Pb = 998.75 - 931 = 67 The methodology used by DHRS's witness to obtain a bed need of 41 from the data available to DHRS was not shown. However, during the six-month period January-June 1984, the occupancy rate in this subdistrict was 96 percent. If the average census for the six-month period can be determined by taking 96 percent of the 804 licensed beds, this number (PC) is 772. Applying a PC of 772 to the prospective utilization formula we have .80 = 772 916 + Pb Pb = 965 - 916 = 49 (Again, 916 is used instead of 931 because the additional 15 beds were not authorized until after June 1, 1984.) QUALIFICATIONS OF PETITIONERS Although no need for additional beds has been shown, the following facts are found respecting the Petitioners' qualifications. Both FLC and HCR are qualified to provide the proposed service. FLC is a management company owned by six individuals comprising two groups, each of which own one-half. FLC is a Subchapter S corporation which means all earnings flow to the shareholders and are taxable to these shareholders. Each nursing home built to be operated by FLC is also a Subchapter S corporation owned by the owners of FLC. Construction of nursing homes to be managed by Florida is done by Living Care Constructors, a partnership comprised of the same six investors. FLC plans to finance construction of the proposed facility by conventional financing from Barnett Bank or through industrial revenue bonds. Barnett Bank will provide the necessary financing. The net worth of the six investors is in excess of $37 million dollars. Four of the six investors are Harold Puckett and his three sons, Hal, Thomas, and James. Each of these own 12-1/2 percent of the nursing homes operated by FLC in Florida while John Cather and E.R.N. Kuzendorf own the other 50 percent. FLC currently operates 10 nursing homes in Florida all of which were constructed by Living Care Contructors. The Puckett family owns some 20 nursing homes in states other than Florida which they have operated for many years. FLC has received citations and has been fined by DHRS for violations of various regulations at the nursing homes it operates in Florida. FLC has also received superior ratings for the nursing homes it operates in Florida. FLC estimated total cost of construction for the 60-bed facility proposed is $1,342,000. Both FLC and HCR propose to have a patient mix comprising approximately 50 percent Medicaid. HCR is a public corporation which, for many years before going public, constructed nursing homes in Indiana, Ohio, Missouri, and West Virginia before moving some operations to Florida. Most of those were built for others or sold to others after construction. HCR currently has three nursing homes under construction in Florida but, to date, none is operational. HCR plans to finance the proposed facility with industrial development bonds. No evidence was presented relative to alternate financing if industrial revenue bonds are not available although evidence was presented that, if desired, HCR is sufficiently liquid to finance these construction costs. HCR's estimated costs to construct and furnish the proposed nursing home is $1,645,000. Its pro forma estimated interest costs are 12 percent. Most of the nursing homes built by HCR were built for or sold to others. Those nursing homes presently under construction by HCR in Florida are intended to be operated by HCR. HCR has several other applications pending for certificates of need to construct nursing homes in Florida. Some of these, if approved, may be sold by HCR rather than be operated by HCR. HCR presented witnesses who extolled the virtues of HCR's program for training personnel and the operating procedures to be followed by HCR in operating the proposed nursing home. However, HCR has no track record in Florida and the management of HCR is certainly no more, and probably less, qualified by experience to operate nursing homes than is the management of FLC.
The Issue The issues for consideration in these cases are: as to Case Number 00-3497, whether the Agency for Health Care Administration should impose an administrative fine against the Respondent's license to operate Beverly Savana Cay Manor, a nursing home in Lakeland; and, as to Case Number 00-2465, whether the Agency should issue a conditional license to the Respondent's facility effective April 28, 2000.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Agency for Health Care Administration, was the state agency in Florida responsible for the licensing of nursing homes and the regulation of the nursing home industry in this state. It is also the agency responsible for conducting surveys to monitor the compliance of nursing homes with the conditions of Medicare and Medicaid participation. Respondents, Beverly Savana Cay Manor, Inc., d/b/a Beverly Healthcare Lakeland, and Beverly Enterprises - Lakeland, are licensed by the Agency to operate a skilled nursing home at 1010 Carpenter's Way in Lakeland. On August 31, 1999, the Agency conducted an investigation into a complaint that Savana Cay had failed to provide sufficient nursing service and related services to allow residents to attain or maintain the highest practicable physical, mental, and psychosocial well-being as required by Federal rules governing Medicare and Medicaid. The Agency surveyor, Patricia Mills, observed several residents who did not have their call buttons within reach so that they could summon help if needed. Ms. Mills also talked with residents and family members and from these interviews determined that even when the resident could reach the call button and summon help, the response time was excessively long or, in some instances, the call went unheeded. This sometimes resulted in resident's suffering from the results of their incontinence because the staff did not timely respond to the help calls. Ms. Mills concluded, based on her extensive experience in surveying nursing homes, that the number of staff on duty was not sufficient to meet the residents' needs. It did not allow for the best possible well-being of the residents. Though the information related by Ms. Mills came from her interviews with residents and their families and was clearly hearsay testimony, it was admissible and considered as corroborative of her direct observation. The parties stipulated that a follow-up survey of the facility was conducted on October 13, 1999, at which time the deficiency described was deemed to have been timely corrected. The Respondent, by stipulation, does not concede the validity of this discrepancy on the August 19, 1999, survey, and the Agency does not rely on it to support the administrative fine sought to be imposed herein. Another survey of the facility was conducted by the Agency on April 26-28, 2000. On this occasion, surveyor Patricia Gold interviewed residents regarding the everyday life of the facility and reviewed resident council reports to follow up on any resident or family concerns which did not appear to have been addressed by the facility staff. During the resident interviews, Ms. Gold was advised that call lights were not answered in a timely fashion. In that connection, early on the morning of April 28, 2000, Ms. Gold observed a resident request a nurse to bring something to drink. The nurse was overheard to tell the resident the request would have to wait until she finished her report. Ms. Gold also noted on April 28, 2000, that dirty dishes were left uncollected over night in the facility common corridor and that one resident had two dirty trays left in the room. The dishes in the corridor were also seen by surveyors Donna Edwards and Marie Maisel. Based on their observations, the interviews, and the review of the council reports, the surveyors concluded that the staff on duty were insufficient in number. Another surveyor, Joanne Stewart, reviewed the resident files and medical reports of several of the residents and determined that in several cases the facility had failed to provide adequate supervision and assistive devices to prevent falls and inconsistently applied the interventions that were put in place. For example, Ms. Stewart observed Resident 12 on the floor at 2:40 p.m. on April 27, 2000. This resident, a cognitively impaired individual, had been placed in the facility from the hospital after he had sustained a fracture to his right hip and, at the time of the fall, still had staples in his hip. Ms. Stewart's review of the kardexes maintained by the certified nursing assistant (CNA) revealed there were no entries thereon indicating a need for special care to prevent this resident from falling. Although he was supposed to wear a tab alarm at all times, the facility staff knew the resident would periodically remove it, and when Ms. Stewart saw him prior to the fall, he was not wearing it. No other interventions, such as quick-release seat belts or Velcro belts, had been implemented to prevent his falls. It was just the kind of fall that he had which caused his placement in the facility and which gave rise to the need for supervision adequate to prevent further injury. He did not get the needed supervision. In fact, though the resident sustained a skin tear and bleeding of the arm as a result of the fall, the nurse who came to the scene of the fall went back to her desk and did some paperwork for between twenty and twenty-five minutes before the resident was provided any treatment for his injury. Ms. Stewart concluded the facility did not provide adequate supervision and assistance to Resident 12, and it is so found. Due to a cognitive impairment and an inability to ambulate due to an intracerebral hemorrhage, diabetes, and a cardio-vascular accident, Resident 9 was assessed at high risk for falls, and a determination was made that the resident should wear a tab alarm while in bed and in the wheelchair. During the course of her survey, Ms. Stewart observed this resident on several occasions without the tab alarm when she should have been wearing it. The resident had previously sustained falls, one of which occurred while the resident was on leave, on March 31 and April 1, 2000, but the only caveat on the CNA kardex for the resident was the caution not to leave her on the toilet alone. Ms. Stewart did not consider the supervision and assistance rendered Resident 9 to be adequate. It is so found. Ms. Edwards focused her review on the records of Resident 22 who was not at the facility at the time of the survey. The records indicated the resident had been assessed at a high risk for falls at the time of her admission and a tab alarm was used. However, according to the nurse's notes, on April 10, 2000, the alarm went off causing the resident to lose her balance and fall while in the merry walker. She lacerated her scalp and sustained a large swelling in the occipital area. The only fall assessment of this resident was done when she was admitted to the facility. The evidence does not indicate when this was, but presumably, it was not done timely. There is a requirement that fall assessments be done quarterly, but it cannot be determined when it was done here. Even when, on April 11, 2000, the day after the fall, the physical therapy staff re-screened this resident for a merry walker, no change in care notation was noted in her record or implemented. Resident 22 sustained another fall on April 16, 2000. On this occasion, the resident was found on the floor of the day room, out of the merry walker. There was no indication she was being supervised or monitored at the time of her fall. This time she sustained another head injury just above the old one. After this fall, the facility staff ordered a new merry walker even though there was no indication a different one would provide additional protection. The resident sustained a third fall on April 18, 2000, sustaining another injury to the head which resulted in substantial blood loss. As a result of this fall, she was taken to the hospital. Because of this, she was not present when the survey was done, but based on her review of the resident records, Ms. Edwards concluded that the facility did not provide sufficient supervision or assistive devices to this resident. During the period of the survey, Ms. Gold observed Resident 3 on five separate occasions. On none of them was the resident wearing a Tabs alarm even though the facility's care plan called for one to be used. A falls assessment had been started on the resident but not completed. The record also revealed that the resident fell on March 29, 2000, resulting in a skin tear to the right arm. Based on the above, Ms. Gold concluded that the resident was not provided with adequate care and assistive devices. Resident 10 was a resident with a history of falls both before and after admission to the facility. The resident's care plan called for chair alarms, a merry walker, a safety seat belt, a low bed, and a bike horn. Though Ms. Maisel, the surveyor, observed that the resident had a chair alarm, she did not see that any of the other interventions called for in the plan were provided. She did not ever see the resident with a merry walker, and on at least two occasions, she saw the resident when the chair alarm was not in use. In her opinion, the use of one intervention does not make the use of other interventions unnecessary, and she considers the facility's supervision and assistive device provision to be inadequate. Resident 4 was an individual who had sustained a hip fracture, was senile, and was taking pain medications. The resident required help in getting out of bed or a chair. The care plan for the resident called for the use of a Tabs alarm, but on none of the occasions that Ms. Stewart observed this resident was the tabs alarm in use. She considered the supervision and assistive devices provided by the facility to this resident to be inadequate. Respondent does not contest that the incidents cited by the Agency took place. Rather, it contends that the interventions implemented by it were sufficient. It also disputes the effectiveness of some interventions called for, specifically the Tabs alarms, suggesting that the alarm does not prevent falls and often contributes to them by startling the wearer. There is some evidence to support that claim. Respondent further contends that the safety provided by the use of an intervention device, such as the Tabs alarm, straps, bed rails, or the merry walker, restrictive as they are, must be weighed and evaluated against the loss of dignity of the resident caused by their use. It is also urged by the facility that the use of certain interventions such as Tabs alarms is made unnecessary when the resident is immobile and safety is provided by the use of other interventions such as bed rails, which are more pertinent to the condition of the resident. In the case of Resident 9, the failure to provide for the use of a Tabs alarm when the resident was on leave with her husband was off-set by the one-on-one supervision she received during that period. Respondent contends that falls will occur among residents of the type in issue here regardless of the planning to identify the risks of fall, the efforts made to prevent them, and the implementation and use of interventions designed to avoid them. While this may be so, the facility nonetheless has a duty to provide necessary and adequate supervision and assistive devices to minimize to the greatest extent possible, the risk of injury as the result of falls. In some cases, this was not done here. In support of its position, Respondent presented the testimony of Theresa Vogelspohl, a nursing home consultant and an agreed expert on falls, issues of the elderly, issues of care of the elderly, and nursing practices and standards in nursing homes. Ms. Vogelspohl indicated that as a general practice when patients are admitted to a nursing home they are considered at risk for falls until the facility staff gets to know them. Each facility sets its own standard as to the length of the observation period, during which the residents are studied for their gait and safety awareness. In addition, the residents are evaluated for safety awareness by the staff of the physical and occupational therapy departments. Ordinarily, the assessment includes only the minimum data set (MDS) criteria, but increasingly during the last few years, a separate falls assessment has become common. In addition to the initial assessment, the attending nurses do an independent admissions assessment, and Ms. Vogelspohl found that such an assessment process was followed as to each of the residents in issue here. Ms. Vogelspohl found that an incomplete falls assessment had been done on Resident 3. Based upon her own review of the resident's records, however, had the full assessment been completed, other than the fact that she was a new resident, the resident would have been classified as a low risk for falls. She opines that the failure to complete the falls assessment did not deny the resident any care or a care plan for falls. Ms. Vogelspohl determined that the facility had opted, instead, for a more cautious approach to this resident in the care plan which, in her opinion, was appropriate for a new admission. A care plan is a map for the staff to be made aware of the care being provided and the specific interventions pertinent to the resident. If the resident is at increased risk for falls, the care plan would list the interventions designed to decrease the risk of falls. One of the most significant risk factors for falls is increase in age. Others are disease conditions, medications, cognitive functioning levels, eyesight, and other impairments. The interventions available to a facility to address the issue of risk of falls depend upon the condition of the resident. The first consideration should be the need to maintain a safe physical environment for the resident. Appropriate footwear is important as is the availability of assistive devices such as a cane or walker. If the resident has a history of falls, consideration should be given to changing those factors which were related to the prior falls. Included in that is consideration of different seating or a more frequent toileting schedule. According to Ms. Vogelspohl, the last thing one would want to do is to apply physical restraint, but, if all else has failed, the least restrictive physical or chemical restraint may be necessary to decrease the likelihood of falls. Ms. Vogelspohl emphasizes that only the likelihood of falls can be reduced. It is not possible to prevent all falls. Room cleanliness is not something which should appear in a care plan. It is a given, and nurses know to place furniture in such a way and to reduce clutter to the extent that the resident can safely navigate the room either with a walker or a wheelchair. Obviously, in this case the survey staff concluded the placement of the dirty trays in the hallway and in the resident's room constituted a hazard. In Ms. Vogelspohl's opinion, supervision and monitoring of residents in a nursing home is a basic. That is generally the reason for the resident's being admitted in the first place. While they should be done on a routine basis, supervision and monitoring are still sometimes placed in a care plan, but the failure to have the requirements in black and white is not a discrepancy so long as the appropriate supervision and monitoring are accomplished. The residents most at risk for falls, and those who are the most difficult to manage, are those who have full physical functioning yet who have almost nonexistent cognitive functioning. Ms. Vogelspohl is of the opinion that for these residents, the best intervention is the merry walker. This is better than a regular walker because the resident cannot leave it behind. If the resident is one who falls from bed, then a low bed, with rails if appropriate, is the primary option. A low bed was called for for Resident 10 but was not provided. Ms. Vogelspohl does not have a high opinion of the Tabs alarm because it can cause as many falls as it prevents. It has a place with the cognitively aware resident who will sit back down if she or he hears the alarm sound. More often than not, however, the routine resident will automatically react by trying to get away from the noise, and, thus, be more likely to engage in rapid, impulsive behavior that can lead to a fall. Ms. Vogelspohl considers the use of the Tabs alarm as only one factor in assessing the degree of supervision provided. She looks at the care plan to see if the Tabs alarm even meets the needs of the resident. If the resident is cognitively alert and at no risk of falls, a Tabs alarm is not appropriate. There are other interventions which can be used such as quick release, velcro seat belts which better prevent falls because they provide a resistance when the resident attempts to stand up. To determine whether a care plan has been developed and implemented, Ms. Vogelspohl reviews the record. She looks at the nurse's notes and those of the social services personnel. She evaluates the records of the physical, occupational, and recreational therapy staff. Finally, she reads the resident's chart to see what staff is actually doing to implement the interventions called for in the care plan. However, on the issue of supervision, she does not expect the notes or the record to affirmatively reflect every incident of supervision. There is no standard of nursing practice that she is aware of that calls for that degree of record keeping. What she would expect to see is a record of any kind of unsafe behavior that was observed. By the same token, Ms. Vogelspohl would not expect a facility to document every time it placed an alarm unit on a resident. The units are applied and removed several times a day for bathing, clothing changes, incontinence care, and the like, and it would be unreasonable, she opines, to expect each change to be documented. Further, she considers it inappropriate and insulting to the resident to require him or her to wear an alarm when cognizant and not displaying any unsafe behavior. If a resident who is not cognitively impaired declines intervention, it would, in her opinion, be a violation of that resident's rights to put one on. In that regard, generally, interventions are noted in the resident records when initiated. Usually, however, they are not removed until the quarterly assessment, even though the intervention may be discontinued shortly after implementation. Ms. Vogelspohl took exception to Ms. Edwards' finding fault with the facility for the three falls experienced by Resident 22. The resident was under observation when the first fall occurred, but the staff member was not able to get to the resident quickly enough to catch her when she stood up and immediately toppled over in her merry walker. The resident had been properly assessed and proper interventions had been called for in the care plan. Ms. Vogelspohl attributes the fall to the resident's being frightened by the Tabs alarm going off when she stood up and believes she probably would not have fallen had she not had the tab unit on. The second fall took place while the resident got out of her marry walker in the day room. Though the day room was visible to anyone out in the hallway, the fall was not witnessed, but Ms. Vogelspohl is of the opinion that it is not reasonably possible to keep every resident under constant visual supervision unless an aide can be assigned on a one-on-one basis to every resident. On the third fall, which occurred at about 10 p.m., the staff had put the resident to bed and had put a Tabs unit on her at that time, but the resident had detached the unit and gotten out of bed. There was nothing the staff could do to prevent that. The resident was able to remove the unit no matter how it was affixed to her. Taken together, the actions taken by the facility with regard to this resident were, to Ms. Vogelspohl, appropriate. Some things could have been done differently, such as perhaps using a heavier merry walker, but she did not consider these matters as defects in the care plan, in assessment, in design, or in application. Further, she concluded that the actions taken by the facility subsequent to the first fall on April 10, 2000, wherein the resident's medications were adjusted to compensate for their effect on the resident, constituted a recognition of a change in the resident's condition which was properly addressed. Too much supervision becomes a dignity issue. There is no formula for determining how much supervision is adequate. It is a question of nursing discretion based on the individual resident. An unofficial standard in place within the industry calls for a resident to be checked on every two hours, but rarely will this be documented. Staff, mostly nurses and CNAs, are in and out of the residents' rooms on a regular basis, administering medications and giving treatments. Those visits are documented, but not every visit to a resident's room is. Resident 12, a relatively young man of 62 with several severe medical problems, sustained a fall which resulted in a fractured hip just two weeks after admission to the facility and two weeks before the survey. He was far more mobile than expected. According to the records, he was mostly cognitive intact and had been assessed for falls. As a result of this assessment, the facility developed a care plan to address his risk for falls. Implementation of the plan was difficult, however, because he was aware and could make up his own mind as to what interventions he would accept. As to the resident's April 27, 2000 fall, the only evidence in the file shows that he was found on the floor of his room in front of a straight chair, having sustained a small skin tear in addition to the fracture. From Ms. Vogelspohl's review of the record she could find no indication that the facility had failed to do something that it should have done to prevent the fall. The staff had put a Tabs alarm on the resident, and he removed it. They tried to keep his wheel chair as close to him as possible. They tried to restrict his water intake by giving him thickened liquids to reduce his trips to the rest room. He would pour out the thickened fluids and replace them with water. Because of this resident's mobility, Ms. Vogelspohl does not accept the surveyor's conclusion that the facility did not use Tabs alarms. He was able to get out of them by himself and frequently did. She is also of the opinion, in light of the way the resident behaved, that the blank kardex observed by the surveyor in no way contributed to the resident's fall. The CNA's were aware that the Tabs units were supposed to be used, and Ms. Vogelspohl has concluded that there were no more aggressive interventions that could have been used with this resident. To attempt the use of restraints, either belt or vest, would have been futile because he could have gotten out of them easily. The only other thing Ms. Vogelspohl feels could have been done was to put him in a geriatric psychiatric unit, and this was ultimately done, but not in the Respondent facility. Ms. Vogelpohl also addressed the surveyors' write- ups as they related to Residents 9, 4, 3, and 10. Resident 4 was bed-ridden as a result of Parkinson's Disease and did not need a Tabs alarm, the deficiency cited, while in bed. When seated in a wheel chair, his postural deficits were compensated for by lateral supports and a padded cushion, and she was of the opinion that a Tabs alarm was not required. She opines its absence would not have addressed his risk for falls. His January 2000 fall apparently did not relate to the failure to use a Tabs unit. Resident 3, also the subject of a write-up for failure to use a Tabs alarm, was not, in Ms. Vogelspohl's opinion, at risk for falls because she did not move around a lot due to her physical condition. Nonetheless, she experienced a fall in late March 2000 and shortly thereafter, the facility placed a Tabs alarm on her and made the appropriate entry in her care plan. Resident 9 was ambulatory only with assistance and had a special seating device to keep her in her wheel chair. After the resident sustained two falls close together, a Tabs alarm was placed on her, and from that time until the time of the survey she had no further falls. Ms. Vogelspohl contends that it was an appropriate nursing decision not to place a Tabs unit on her. The rationale for this position is not at all clear. The care plan for Resident 10, also one of the residents observed without a Tabs alarm in place, was described as "somewhat cluttered." It showed multiple interventions initiated as early as April 1999. The initial care plan was crossed through and a new one substituted in September 1999 with the family's concurrence. Nonetheless, Ms. Vogelspohl did not find it too cluttered to be understood. The evidence shows that the resident's chair was outfitted with a soft seat belt and a pressure-sensitive alarm, both of which are considered to be more effective than the Tabs alarm. Ms. Vogelspohl contends that the facility did not ignore the requirement to assess the residents for falls or the requirement to address that issue in care planning. She admits that in some cases, the plan addressing falls prevention was covered in another assessment than the one wherein it might most likely be expected, but it is her contention that if the subject is properly and thoroughly addressed somewhere in the resident's care record, that is sufficient. She considers placing it in several areas to be a redundancy and though it is frequently done so, it is done to meet a paper compliance without having any impact on the quality of care provided.
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 sustaining the Conditional license for the Respondent effective April 28, 2000, and, based only on the conditions observed at the facility on that date, imposing an administrative fine of $700.00. DONE AND ENTERED this 22nd day of March, 2001, 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 22nd day of March, 2001. COPIES FURNISHED: Christine T. Messana, Esquire Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 R. Davis Thomas, Jr., Qualified Representative Broad and Cassel 215 South Monroe Street, Suite 400 Post office Box 11300 Tallahassee, Florida 32302-1300 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
