The Issue Whether Petitioner's application for a license to operate Holly Heights Manor as an adult congregate living facility (hereinafter referred to as an "ACLF") should be denied for the reason cited in the Agency for Health Care Administration's August 25, 1994, letter notifying Petitioner of its intention to deny its application?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Facility Holly Heights Manor is an ACLF located in Broward County, Florida. The facility consists of four separate buildings. Each building contains a number of two-bedroom apartments. There are a total of 35 bedrooms in the facility. Each bedroom is large enough to accommodate two residents. The facility also has a main kitchen and a smaller, satellite kitchen. The main kitchen is located in the same building as the facility's administrative office. There is a dining room off the main kitchen, where the residents are served their meals. The satellite kitchen is located in "C" Building on the north side of the premises. The Purchase of the Facility and Pre-June 6, 1994, Repairs and Improvements The current owners (hereinafter referred to as the "Rosenblatts") purchased Holly Heights Manor in November of 1993. At the time of the purchase, the facility was in deplorable condition. Shortly thereafter, the Rosenblatts began an effort, which is still ongoing, to make repairs and improvements to the facility. The Application and the June Survey As the new owners of Holly Heights Manor, the Rosenblatts submitted an application for a license to continue to operate the facility as an ACLF. On June 6 and 7, 1994, the Agency conducted a "change of ownership" survey of Holly Heights Manor (hereinafter referred to as the "initial CHOW survey") to ascertain whether there was compliance with "minimum standards." The Agency employees who conducted the initial CHOW survey were Maryanne Clancy, a public health nutrition consultant, Ann Fantell, a human service survey specialist, and Dominic Grasso, a fire protection specialist. Fantell was the survey team leader. Before leaving the premises, she gave the Rosenblatts a form letter addressed to "Mr. Rosenblatt," which read as follows: The purpose of this letter is to explain the process now that the survey has been completed. During the exit conference, you or your repre- sentative were advised of the deficiencies and requested to write them down. At this time, we also established a time frame for the correction of each deficiency. You will receive, in several weeks, a written report from our Office of this survey. THE TIME TO CORRECT, HOWEVER, STARTS FROM TODAY, THE DAY OF THE SURVEY. An unannounced revisit will be conducted after the dates of correction to determine if the deficiency(ies) have been corrected. It is required that each deficiency be corrected by the date established. If a deficiency is not corrected within the required time frame, the FACILITY MAY BE ASSESSED AN ADMINISTRATIVE FINE. The purpose of this survey is to evaluate the facility compliance with ACLF Rules and Regulations. REPEAT DEFICIENCIES FROM ONE VISIT TO THE NEXT MAY RESULT IN THE ISSUANCE OF ADMINISTRATIVE SANCTIONS SUCH AS FINES, NON-RENEWAL OF THE LICENSE, OR LICENSE REVOCATION, at the time of the current visit, regardless of any time allowed for corrections. Additional time may be granted to correct specific deficiencies if a written request is received prior to the original date of correction. This written request must identify the deficiency(ies) by ACLF number, the reason for the extension request, and specific amount of additional time needed. This office will then approve or disapprove the request, in writing, back to the facility. When the written results of this visit are received, your copy of the report is to be posted in the facility. THE ENCLOSED STATEMENT OF ACKNOWLEDGMENT OF RECEIPT is to be signed and returned to this office within ten days of receipt. If you have any questions, please contact this office at (305) 497-3395. Bruce Rosenthal signed a written acknowledgment, dated June 6, 1994, that he had received and read the letter. The initial CHOW survey revealed over 50 deficiencies. As promised in the letter, the Agency subsequently sent the Rosenblatts a written statement of these deficiencies. Bruce Rosenthal signed a written acknowledgment, dated June 15, 1994, that he had received and posted the statement of deficiencies. At around the same time that the Rosenthals received the Agency's written statement of deficiencies, they received a letter, dated June 10, 1994, from Patricia Feeney, the Agency's Broward County area office supervisor, advising them that their "application for an initial license to operate [Holly Heights Manor] was approved by the ACLF section in Tallahassee" on May 25, 1994. 1/ In response to the written statement of deficiencies that they received, the Rosenthals submitted a plan of correction to the Agency. In addition, they requested an extension of time to correct the fire safety-related deficiencies cited in the statement. Their request was denied. The July Survey On July 12 and 18, 1994, the Agency conducted a follow-up CHOW survey of Holly Heights Manor to determine whether the deficiencies discovered during the initial CHOW survey had been corrected. 2/ Clancy and Grasso, along with Elizabeth Thomas, a human service survey specialist with the Agency, conducted the follow-up CHOW survey. Clancy and Thomas visited the facility on July 12, 1994. Grasso visited the facility on July 18, 1994. The follow-up survey revealed that, while a number of the deficiencies found during the initial CHOW survey had been corrected, a larger number of these deficiencies still remained (hereinafter referred to as the "uncorrected deficiencies"). Deficiencies that the Agency alleged had not been corrected, as well as what the Agency alleged were new deficiencies uncovered during the follow-up CHOW survey, were described in a written statement of deficiencies the Agency provided the Rosenthals. The following were the uncorrected deficiencies that existed at the time of the follow-up CHOW survey: Failing to properly document third party services arranged for by the facility (Tag number A 209); 3/ Failing to document that three patients who had resided at the facility for more than thirty days had been examined by a health care provider (Tag number A 401); 4/ Failing to maintain adequate resident health assessment records (Tag numbers A 403 and A 404); Having a resident not meeting the criteria for admission and continued residency in an ACLF (Tag numbers A 406 and A 408); Failing to notify a resident's physician concerning the resident's inability to obtain prescribed medication (Tag numbers A 602 and A 607); Failing to maintain resident medication administration records that reflect that medications are administered to residents in accordance with their physicians' orders and/or failing to administer medications to residents in accordance with their physicians' orders (Tag number A 604); Failing to properly store medications (Tag number A 606); Failing to encourage residents to participate in activities, and failing to document apparent deviations in the appearance and health of residents (Tag number A 700); Failing to adequately assist residents in their activities of daily living, including grooming and selection of clothing (Tag number A 701); Failing to provide sufficiently diversified activity programs, and failing to consult with residents in the planning and offering of activity programs (Tag number A 703); Using unauthorized mechanical restraints (Tag number A 709); Failing to provide food service in a sanitary manner as evidenced by the flies that were on the food in the main kitchen and dining room and the food service employees that were working without head coverings (Tag number A 800); 5/ Having an insufficient emergency food supply (Tag number A 810); Failing to have an operable dishwasher and washing dishes in a single compartment sink, without sanitizers, in the satellite kitchen (Tag number A 812);. Failing to keep the grounds and interior walls and floors of the facility reasonably clean-looking and attractive (Tag number A 903); Having furniture and furnishings in need of cleaning and repair (Tag number A 904); Improper storing of clothes, linens and other items needing to be washed, and improper storing of wet and dirty mops (Tag numbers A 910 and A 911); Failing to have a written disaster preparedness plan, 6/ and failing to post fire evacuation signs (Tag number K 002); Having walls with "unsealed hole penetrations" (Tag numbers K 009 and K 014); Having sleeping room doors that did not close and latch properly (Tag number K 010); Having "unsealed vertical hole openings throughout the facility" (Tag number K 011); Failing to properly maintain air conditioning and ventilation systems "as evidenced by dirty a/c filters and non-functional vent fans in bathrooms throughout the facility" (Tag number K 015); Failing to have a properly maintained, inspected and certified fire alarm system (Tag number K 016); Failing to document appropriate smoke detector testing (Tag number K 017); Failing to have an adequate cooking hood and extinguishing system (Tag number K 019); Failing to maintain adequate means of egress from the facility (Tag number K 020); and (aa) Failing to provide sufficient emergency lighting (Tag number K 021). The new deficiencies cited by the Agency as a result of the follow-up CHOW survey up were as follows: Failing to employ a consultant pharmacist licensed under Chapter 465, Florida Statutes, after having "uncorrected Class III deficienc[ies] directly related to the administration or supervision of self-administered medication documented by [Agency] personnel pursuant to an inspection of the facility" (Tag number A 610); Failing to provide a physician-ordered therapeutic diet to a resident (Tag number A 802); Failing to serve food at safe and palatable temperatures (Tag number A 811); and Failing to employ a registered or licensed consultant dietician after having "uncorrected Class III deficienc[ies] directly related to dietary standards" (Tag number A 813). Proposed Denial of Application and Imposition of Moratorium The existence of these uncorrected and new deficiencies led the Agency (a) to preliminarily decide to deny the Rosenthals' application for a license to continue to operate the facility as an ACLF, and (b) to impose a moratorium on admissions to the facility "to run concurrently with the denial action." Post-July Survey Remedial Measures The Rosenthals have taken measures designed to correct deficiencies that existed at the time of the follow-up CHOW survey. Written health assessments of residents are now updated monthly. The facility has retained the services of a consultant pharmacist, Alan Siegel, to assist it in complying with "minimum standards" relating to medication administration. At the time Siegel was retained, Leon Rosenthal told him to "do whatever it took to get the facility into compliance in the areas of pharmaceuticals." Siegel moved quickly to accomplish this objective. Only a day after he was retained, on or about July 13, 1994, he conducted an "in-service" training session attended by all of facility's available staff members. He has conducted many other "in-services" for the facility's staff. On or about August 6, 1994, Siegel, in his capacity as the facility's pharmacist consultant, sent the following letter to the Agency: This letter is in response to your recommendations at Holly Heights Manor from July 12, 1994. I was called by the facility owner and asked to act as the facilit[y']s Consultant Pharmacist and started my first review of [the] facility on July 13 that included an inservice on Medication Observation and Psychotropic Side effects. This inservice appeared to go well, since then I have reviewed the facility on July 28 as well as August 5 199[4]. Administration [i]n this facility is doing [its] best to correct the problems. I now have an agree- ment to act as Consultant Pharmacist and will keep in contact with you on an ongoing basis. My initial reviews confirmed your findings and in my set of corrections I indicated what needs [to] and will be done. A602- Resident #10 has had a long history of problems with his family who refuse[s] to be responsible for payment of his prescription medications. He presently owes over four hundred dollars. The facility has agreed to pay for his medications and medications are now available. If you can help me recover the amounts owed to me I will be very appreciative. A604-A610- Consultant Pharmacist was contacted and review confirmed problem. Inservice was done and follow-ups will continue. A606- Proper disposal of discontinued medications is being followed and no medications are being left on the Administrator's desk. A607- refers to A602 Facility was instructed to include in their documentation when medications cannot be sent due to inability to pay or refusal of family. This mainly refers to patients who have no Medicaid or any other aid. Looking forward to seeing you in the future. On or about December 19, 1994, Siegel completed an audit of the facility's medication administration records for each of the facility's residents. The audit revealed no discrepancies or any other indication that the deficiencies existing at the time of the follow-up CHOW survey still existed. With Siegel's help, the facility has a medication administration system that the facility staff is now fully trained to implement in accordance with "minimum standards." The facility now offers, on Tuesdays and Thursdays of each week, music therapy, reality orientation and stress reduction services to residents. These services are provided by a registered nurse employed by the Florida Psychiatric Group. Residents have a neater appearance now than they did at the time of the follow-up CHOW survey. As a general rule, residents are now bathed or showered every day and, as a result, look and smell clean. Male residents are now shaved at least four times a week. Residents' clothes are now changed during the day if they become soiled. Residents are now given laundry bags in which to put their dirty laundry. The bags of dirty laundry are picked up every day by the facility's housekeeping staff. A Medicare-funded home health aide now visits the facility four or five days a week to assist residents in their activities of daily living. Since September or October of 1994, the Rosenthals have had a Florida- licensed pest control business, which also services other ACLFs, perform pest control services at the facility. Maximum (98 percent) pest elimination has been achieved. The facility now has on hand, in the event of an emergency, a one week supply of non-perishable food items, including canned dried milk, beef, ravioli, and beef stew, among other items. The dishwasher in the main kitchen has been repaired and is now operational. The facility has a consultant dietician, Barbara Holland, but she has not provided the Agency with any reports concerning progress made at the facility in the area of food service since the follow-up CHOW survey. The general cleanup of the facility and grounds has continued, spearheaded by Chuck Stevens, the facility's full-time maintenance man, and Cindy Gobin, an administrative assistant at the facility. Bleach and other chemicals have been used extensively in the cleanup effort. Doors and walls, including a "rotted out," "musty" wall behind the commode in one of the bathrooms, have been replaced. Although many pieces of furniture were replaced or repaired following the Rosenthals purchase of the facility, no furniture has been repaired or discarded since the initial CHOW survey. Mops are now properly stored. Holes in walls have been patched and sealed. At a cost of approximately $4,900.00, the facility's fire alarm system has been upgraded. 7/ The upgraded system, which includes signaling devices, has been certified in writing by Gerald Pinnock, the owner of Alpha Security & Fire Alarm Services, Inc., as being properly installed and functioning correctly in accordance with all applicable NFPA requirements. 8/ Work has been done on the air conditioning and ventilation systems. Entire units have been replaced. The cooking hood and extinguishing system in the main kitchen has been repaired and has passed inspection (but not by Agency licensing personnel). Electrical outlets, electrical wiring, light fixtures and bulbs have been replaced. It appears that, all in all, substantial progress has been made in eliminating the deficiencies that existed at the facility at the time of the follow-up CHOW survey. Agency Verification of Corrections Agency personnel have visited the facility subsequent to the follow-up CHOW survey to investigate complaints and to monitor compliance with the Agency- imposed moratorium on admissions. Fantell, for instance, visited the facility on August 12, 1994, on a complaint investigation. During her visit, she noted, among other things, that the facility still had an insufficient emergency food supply (a situation which subsequently was corrected). Following the imposition of the moratorium, until November 30, 1994, Fantell was at the facility on a weekly basis. During a monitoring visit on September 28, 1994, the facility failed to provide residents with the activity programs that had been scheduled for the time period that Fantell was at the facility, and it did not provide residents with any substitute activity programs. During her last visit to the facility, on November 30, 1994, Fantell found a bottle of medication on a desk in an unlocked, open office in the facility. On this last visit, she was not permitted to tour the facility. Although Agency personnel have visited the facility subsequent to the follow-up CHOW survey, they have not done so specifically for the purpose of conducting an inspection or survey to ascertain the extent to which the deficiencies discovered during the follow-up CHOW survey have been corrected. No such survey or inspection has been conducted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency, (1) through its "licensing personnel," immediately conduct another follow-up survey of Holly Heights Manor to ascertain the extent to which deficiencies that existed at the time of the July follow-up CHOW survey have been corrected, and (2) thereafter take action consistent with the results of that survey. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1995. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1995.
The Issue Whether the license #47-00498H, held jointly by Byron R. and Susan R. Underwood, should be suspended or revoked or whether civil penalties should be assessed.
Recommendation Based upon the foregoing Findings and Conclusions of Law, the Hearing Officer recommends that a civil penalty be assessed in the amount of $250.00 to be imposed upon the Respondent, Byron R. Underwood, doing business as Pine Manor Apartments. DONE and ORDERED this 28th day of February, 1980, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mary Jo M. Gallay, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Mr. Byron R. Underwood c/o Pine Manor Apartments 2090 Thomasville Road Tallahassee, Florida 32312
The Issue Which, if any, of the proposals of the co-batched applicants meet the criteria for the issuance of certificate(s) of need in response to the projected need for 168 additional community nursing home beds in Palm Beach County, for the year 2000 planning horizon.
Findings Of Fact The Agency for Health Care Administration (AHCA) is the state agency which administers the certificate of need (CON) program for health care services and facilities in Florida. In April 1997, AHCA published a need for an additional 168 nursing home beds in District 9, Subdistrict 4, for Palm Beach County, by the January 2000 planning horizon. AHCA reviewed the applications and preliminarily approved the issuance of two CONs: CON 8853 to Whitehall Boca, an Illinois Limited Partnership, d/b/a Whitehall Boca Raton (Whitehall Boca), to convert 48 assisted living beds to 48 skilled nursing beds; and CON 8862 to Regents Park, Inc. (Regents Park), to construct a new 120-bed community nursing home. Regents Park's Letter of Intent In advance of filing for CONs, applicants give notice of impending applications by filing letters of intent (LOI). The information required in the LOI is specified in the CON statute and rules. Failure to meet mandatory LOI requirements has resulted in the rejection of CON applications. See e.g., Humhosco, Inc. v. DHRS, 561 So. 2d 388 (Fla. 1st DCA 1990); and Vantage Healthcare Corporation v. AHCA, 687 So. 2d 306 (Fla. 1st DCA 1997). At the time these applications were filed, the statutory requirement was as follows: Letters of intent shall describe the proposal with specificity, including proposed capital expenditures, number of beds sought, if any, services, specific subdistrict location, identification of the applicant, including the names of those with controlling interest in the applicant, and such other information as the department may by rule prescribe . . . . (Emphasis added.) Subsection 408.039(2)(c), Florida Statutes (1995). In a Motion for Summary Recommended Order, filed on May 1, 1998, Life Care Health Resources, Inc. (Life Care), maintained that Regents Park's petition should be dismissed because its LOI failed to include the information required to identify the applicant. Life Care cites the omission of the names of those with controlling interest in the applicant, not only as required by the statute, but as further described by rule: For an applicant which is a corporation not publicly held, a listing of each person with 10% or more ownership interest will satisfy this requirement provided the applicant identifies itself as a non-publicly held corporation. A list of the person or persons will not be construed by the agency to be an identification of the controlling interest of the applicant unless so described. (Emphasis added.) Rule 59C-1.008(1)(f)2., Florida Administrative Code (1/95). The rule also included a more general statement that the agency will not assume facts not clearly stated in the LOI. The parties agree that Regents Park is and identified itself as a non-public for-profit corporation. Regents Park attached to its LOI a list naming as its directors: Bernard B. Hollander and Jack L. Rajchenbach, and a list of officers: President Bernard B. Hollander, Secretary Jack L. Rajchenbach, and Treasurer Aaron Hollander. At the hearing, Aaron Hollander testified that Bernard B. Hollander and Jack L. Rajchenbach each own 26 percent of the stock in the Regents Park corporation, and that three other persons own 16 percent interest each. The names of the other three people, each of whom has an ownership interest in Regents Park in excess of 10 percent were not provided with the LOI. The LOI included statements that "Regents Park, Inc., is a Florida for-profit corporation which is governed and controlled by its Board of Directors. . . A current listing of the applicant's board members and officers is also attached. " Beverly Enterprises - Florida, Inc., d/b/a Beverly Gulf Coast - Florida, Inc. (Beverly), supports Life Care's position that Regents Park's LOI is fatally flawed. In its August 7, 1998 Motion for Summary Recommended Order Dismissing Regents Park, Inc., Beverly noted that the rule distinguished between the requirements for public and non-public corporations. A listing of directors, which was provided by Regents Park, satisfied the requirements for public, but not for non-public corporations. Beverly also asserted that Regents Park failed to specify that the names it listed were those of persons with controlling interest and that AHCA cannot construe or assume facts not clearly stated. Regents Park, supported by AHCA, argued that the rule never mandated disclosure of persons with 10 percent or greater interest. Although such disclosure "will satisfy" the requirement, Regents Park claims to have satisfied the statutory requirement in a different permissible manner. In addition, the statutory reference to "controlling interest" was repealed effective July 1, 1997. Subsequently, the reference in the rule to the 10 percent or more controlling interest disclosure requirement was repealed in November 1997, prior to the time of the final hearing. Vol. 23, No. 43, Florida Administrative Weekly (October 24, 1997). Regents Park acknowledged its continuing need to comply with the statute which was in effect when the LOI was filed, but not the rule which was no longer in effect at the time of the hearing. The 1997 statute included a provision that the LOI amendment would not apply to applications filed prior to July 1, 1997, but it also provided that AHCA's CON rules would remain in effect until repealed or amended. See Section 14, Ch. 97-270, Laws of Florida, and Section 408.0455, Florida Statutes (1997). At the time of the final hearing, only the general rule that the agency shall not assume facts not clearly stated was the same as it was at the time the LOI was filed. At the hearing, Aaron Hollander identified the two members of the Board who were listed in the LOI as having the controlling interest in Regents Park. For the reasons given in the Conclusions of Law, the Regents Park application is not dismissed and is considered on its merits. Applicants For Fewer Than 90 Beds Marriott Senior Living Services, Inc. (Marriott), is a wholly-owned subsidiary of Marriott International, Inc. Marriott owns and operates 94 senior living communities throughout the United States, 32 of those are multi-level care facilities, known as Brighton Gardens. In Palm Beach County, Marriott owns Brighton Gardens of West Palm Beach and Brighton Gardens of Boynton Beach which are 2 of 7 Florida Brighton Gardens. Marriott operates a total of 10 senior living communities in Florida. Marriott proposes to develop another multi-level senior living community, Brighton Gardens of North Palm Beach (Brighton Gardens) on a 6-acre site in the area of the City of Jupiter. In addition to 45 CON-approved nursing home beds, it will include 119 assisted living beds, 25 of those divided into two separate sections within a special care center for residents with Alzheimer's disease and other related dementia (ARD). If issued CON 8861, Marriott will commit to providing 30 percent of total patient days in the nursing beds to Medicaid-reimbursed residents, and will offer respite and hospice care. The capital cost for the nursing home component is approximately $3.4 million of the total $14.7 million cost for the development of the entire Brighton Gardens community. Heritage Park of West Delray, Ltd. (Heritage Park), is the applicant for CON 8850P to convert 20 assisted living beds to 17 nursing home beds in an existing facility, Liberty Inn. Liberty Inn has a total of 63 beds, 34 assisted living beds and 29 recently licensed nursing beds, all for ARD residents. In addition to Liberty Inn, the Heritage Park West retirement community campus includes a 196-apartment building. A related company also owns and operates Heritage Park East, which has 145 assisted-living apartments, and Colonial Inn, a 60-bed licensed extended congregate care facility. Another Heritage Park company operates a home health agency, established to serve only its 500 residents. Heritage Park proposes to condition its CON on maintaining a minimum Medicaid occupancy of 54.8 percent in the 17 new beds, and a minimum ARD occupancy of 67.7 percent. If CON 8850P is approved, Heritage Park's construction cost will be approximately $150,000 of the $576,394 in total project cost. Whitehall Boca, an Illinois Limited Partnership, d/b/a Whitehall Boca Raton (Whitehall Boca) is an existing 155-bed superior licensed facility with 99 operational and 7 approved nursing beds, providing subacute and assisted living care in Boca Raton, in southern Palm Beach County. Whitehall Boca is seeking CON 8853 to convert existing private rooms and assisted living space into 48 additional skilled nursing beds, including a 27-bed subacute unit. Although Whitehall Boca estimated a total of $1.6 million in project costs, approximately $1.3 million is attributable to prior expenditures, including the original land purchase and the construction costs for the 82,000 square foot building proportionately allocated to this project. Having originally been built to skilled nursing standards, the proposed conversion of beds at Whitehall Boca will, in fact, require approximately $350,000. Beverly Enterprises Florida, Inc., d/b/a Beverly Gulf Coast-Florida, Inc. (Beverly) which owns and operates approximately 45 facilities in Florida, is a wholly-owned subsidiary of Beverly Health and Rehabilitation Services, Inc., a wholly-owned subsidiary of Beverly Enterprises, Inc. The Beverly companies operate 61 facilities in Florida and in excess of 600 nursing homes and related businesses in the United States. Beverly Health and Rehabilitation Center - Royal Palm (Royal Palm) is an existing 120-bed nursing home, with 31 short-term, Medicare-certified rehabilitation beds. As the applicant for CON 8851, Beverly proposed to add approximately 18,500 gross square feet to Royal Palm for 48 additional beds, 28 of those for long- term care and 20 for a secure ARD unit. Located in western Palm Beach County, the City of Royal Palm is a developing community, which is 12 to 13 miles west of the City of West Palm Beach. If CON 8851 is approved, Beverly will commit to provide 53.8 percent of total patient days in the 48 new beds to Medicaid and .2 percent of annual gross revenues to indigent resident care, to provide respite care, and to award a $10,000 grant to a state university genotological research/scholarship fund. Beverly also agreed to accept residents who have mental health disorders, and those with AIDS. The total project cost is approximately $2.7 million. Health Care and Retirement Corporation of America, d/b/a Heartland Health Care and Rehabilitation Center - Boca Raton (HCR) is an existing 110-bed facility in Boca Raton in southern Palm Beach County. If issued CON 8860, HCR proposes to increase its capacity by 10 beds by converting 10 private rooms to semi-private rooms. Currently, 31 of the 110 beds are used for long-term care, with the remainder divided into the following services: 20 beds for an ARD unit, 40 beds for subacute care and 19 beds for progressive or step-down care. An additional 10 beds will increase the capacity for short stay, specialty rehabilitation, which is a proposed condition for the issuance of the CON. HCR will also commit to providing 5 percent of total patient days to post-acute care for persons recovering for coronary artery bypasses grafts (CABG), chronic obstructive pulmonary disease (COPD), total joint replacements, and other orthopedic conditions. HCR will commit to providing blood transfusions at the nursing home. The total project cost for HCR's proposal is $279,050. The 90- or 120-Bed Applicants Regents Park, which currently operates Regents Park of Boca Raton, is the applicant for CON 8862 to construct a new 120-bed nursing home for geriatric psychiatric residents, those who physically need nursing home care, but who also have secondary psychiatric diagnoses. Regents Park intends to have its staff trained in geriatric psychiatry and proposed, as other conditions for CON 8862, to accept transfers of geriatric psychiatric residents from other nursing homes, to provide at least 30 percent of its resident days to Medicaid residents, and to locate in southern Palm Beach County. In addition, Regents Park will commit to providing specialized diets, such as Kosher food. One-half of the beds, intended for short rehabilitative stays of approximately 60 days or less, will be built in an Extended Care Unit (ECU). Residents with longer expected lengths of stays, from 90 days to one year, will be housed in the half of the facility designated as an Aging Adult Services Unit (AASU). Regents Park proposes to construct the 64,000 gross square foot, 120-bed nursing home for the total projected cost of $8.5 million. Manor Care of Boynton Beach, Inc. (Manor Care), is the applicant for CON 8856 to construct a 120-bed nursing home or, alternatively, for CON 8856P to construct a 90-bed nursing home. Manor Care is a wholly-owned subsidiary of a subsidiary of a public corporation traded on the New York Stock Exchange. The Manor Care companies own and operate over 200 nursing homes in 29 states, including 13 nursing homes in Florida. In Palm Beach County, Manor Care owns and operates 180-bed facilities in Boca Raton and Boynton Beach, a new 120-bed facility in West Palm Beach, and a 120-bed facility which is under construction in West Delray. Manor Care proposes to condition its CON on locating the facility in the Jupiter area of northern Palm Beach County, and on providing 40 percent of total resident days to Medicaid, 5 percent of total resident days to hospice patients, 1,100 annual resident days for respite care and adult day care for 2 participants a day. Manor Care will also commit to establish a 20-bed Medicare unit and a 30-bed ARD unit in a 120-bed facility or a 34-bed ARD unit in a 90-bed facility. Manor Care will donate $15,000 to a Palm Beach County ARD association. The total project cost is approximately $8.5 million for the 120-bed 52,328 gross square foot facility, or $7.3 million for the 90-bed project of 41,452 gross square feet. Life Care Centers of America, Inc., a Tennessee Subchapter S corporation operates approximately 220 nursing facilities and other retirement centers in 28 states. In this case, the CON applicant is Life Care Health Resources, Inc. (Life Care), which is owned by the same sole shareholder as the other related Life Care entities. In Florida, Life Care affiliates have nine existing and one approved nursing home. Two of the Florida facilities, Darcy Hall Nursing Center and Lakeside Health Center, are located in West Palm Beach. As the applicant for CON No. 8859, Life Care proposes to construct a 120-bed nursing home of 57,500 gross square feet on approximately 6 acres in north central Palm Beach County. Life Care will condition the CON on the provision of 54 percent of total patient days to Medicaid residents, and the establishment of a 20-bed secure ARD unit and an adult day care center for 10 clients. Life Care will also provide respite and hospice care. The plans also include a 20-bed subacute unit with an adjacent therapy wing and an interior physical therapy courtyard. The projected total cost is $8.9 million. 408.035(1)(a) - need in relation to district and state health plans The state health plan directs AHCA to give preferences for applicants proposing the following: to locate in areas with nursing home occupancy rates exceeding 90 percent; to serve Medicaid residents in proportion to the subdistrict average with exceptions for special cultural, ethnic or multi-level care systems; to offer specialized care, as for residents with AIDS, ARD or mental illnesses; to provide a continuum of services, such as respite or adult day care; to maximize residential features within long-term care facilities; to provide innovative therapeutic and restorative care; to propose charges not exceeding the highest subdistrict Medicaid per diem rate except to serve an upper income population; to offer historically superior resident care; to staff, particularly nurses, at levels above minimum requirements; to use multi-disciplinary professional staff; to document protections for residents rights and privacy, and established protocols for quality assurance and discharge planning; and to implement lower administrative, but higher residential care costs than the district average. The district health plan is the 1996 Certificate of Need Allocation Factors Report of the Treasure Coast Health Council. It includes recommendations for approval of applicants who: agree to serve a minimum of 30 percent of total patient days for Medicaid; have a history of good care, higher staffing ratios, mental health and subacute rehabilitative care; and propose to serve a distinct, needy population in the subdistrict, such a those requiring special diets or bilingual staff. The state (SHP) and district (DHP) health plans are discussed in detail, as indicated below, with related statutory criteria. In general, Marriott qualifies for the district health plan allocation factors, with emphasis on the continuum of multi- level care to allow residents to "age in place." Marriott has also demonstrated compliance with the state health plan, except that Marriott's per diem charges exceed the highest Medicaid per diem, and it has lower than average resident care costs. Based on the geographical description in its CON, Marriott could locate in areas in which nursing homes do not meet the 90 percent occupancy level set in state health plan preference one, but its expressed intention to locate in the Jupiter area complies with the preference. Heritage Park complies with the factors and preferences in both the state and district health plans, except it has no history of operating nursing beds. Heritage Park emphasizes the needs of Medicaid residents who require a Kosher diet as a distinct population group. Whitehall Boca meets all of the local health allocation factors except the Medicaid minimum of 30 percent. Whitehall Boca also meets all of the state health plan preferences except that it does not propose to provide Medicaid in proportion to the subdistrict average and will exceed certain Medicaid charges. Whitehall Boca, however, qualifies for the exceptions for offering multi-level care to upper income residents. Whitehall Boca also partially meets the preference for higher residential care costs, but not for lower administrative costs. Beverly meets the local allocation factors, with emphasis on a broad range of services needed in its area of the County. Approximately half of its Florida facilities were rated superior at the time of hearing and Beverly's resident care costs are lower than the district average. In general, HCR meets the preferences of the state health plan, including the Medicaid exceptions for multi-level providers to upper income residents. With the exception of the priority for applicants providing a minimum of 30 percent Medicaid, HCR also meets the allocation factors in the local health plan, particularly to serve residents needing high technology post-acute skilled nursing care. Regents Park meets all of the local health plan factors, with emphasis on the needs of geriatric psychiatric residents. It also meets all of the state health plan preferences, except for the provision of Medicaid in proportion to the subdistrict average (proposing 30 percent as compared to 53.7 percent). Life Care qualifies for all of the local health plan factors, having identified Medicaid residents as a distinctly needy population group. Of the 120-bed applicants, only Life Care will equal the existing subdistrict Medicaid utilization. Life Care meets the state health plan preferences, except for its lack of specificity needed to determine that its location will be one in which nursing homes exceed 90 percent occupancy, its unimpressive history of care with only one of four clearly eligible Florida nursing homes licensed superior, and its lower resident care costs than the district average ($70.87 as compared to $77.40 to $88.33). Manor Care meets the local and state health plan preferences, except the Medicaid subdistrict average (proposing 40 percent as compared to 53.7 percent). Manor Care proposed to offer a full range of services with an ARD unit, and AIDS, Medicare, respite, hospice and adult day care in the Jupiter area. 408.035(1)(b) - availability, quality of care, efficiency appropriateness, accessibility, extent of utilization, adequacy of like and existing facilities, and services in the district; 408.035(2)(b) and (d) - efficient and appropriate use of existing facilities and patients' problems; and SHP 1 - over 90 percent occupancy All of the applicants propose to add beds or to construct facilities in the subdistrict for Palm Beach County, which had an average subdistrict occupancy of 88.8 percent from July to December 1996. The parties agree that 168 additional nursing home beds are needed. Each described the need for its proposal in terms of increasing the availability and appropriateness of the services currently provided in the existing 51 nursing homes in Palm Beach County. To enhance availability and accessibility geographically, Marriott, Life Care and Manor Care maintain that additional beds are needed in northern Palm Beach County. Beverly argued that the beds are needed at its location in the west central Palm Beach County community of Royal Palm. Heritage Park, Whitehall Boca, HCR and Regents Park presented evidence of need in southern Palm Beach County. Northern Palm Beach County is generally the area from Palm Beach Gardens north to Jupiter. At the time the CON applications were filed, 7 of the 51 nursing homes in the County were located in the Jupiter area. The occupancy levels of those nursing homes ranged from 91 to 94 percent. Life Care proposes generally to locate in north central Palm Beach County, using Lake Worth as the dividing line. That would include areas ranging in occupancy rates from 79.03 percent (Palm Beach Gardens/Lake Park) to 91.6 percent (Jupiter). Only Manor Care proposed to condition approval of its CON on locating the facility in the north, specifically north of North Lake Boulevard. Marriott argued the need for its project because the north also appears under-served by combined assisted living and skilled nursing retirement communities. Marriott would locate, in general, north of the West Palm Beach airport. Of the 51 existing nursing facilities in the County, 13 also have assisted living beds. Only 3 of the 13 multi-level communities with 300 nursing and 200 assisted living beds, are located in the northern areas of the County, all in the City of West Palm Beach. By comparison, the remaining 10 retirement communities, in southern areas, have 900 nursing and 800 assisted living beds. In support of Beverly's proposed expansion, the relative isolation of the facility west of the Turnpike, and its 96 to 97 percent occupancy rates were considered. Beverly's Royal Palm is the only facility located within a five mile radius of the Royal Palm community. Subacute care services at Royal Palm are provided to patients discharged from two area acute care providers, Wellington Regional Hospital and Columbia Palms Hospital. The proposal does not, however, include expansion of Beverly's 31-bed short-term rehabilitation unit so that cannot be a primary factor supporting its need. Dividing Palm Beach County at Southern Boulevard, which is also known as U.S. 441 or State Road 80, other expert health planners testified that the need for additional beds was greater in the southern areas of the County. The dividing line reasonably coincides with that used by the Treasure Coast Health Council for acute care hospitals. Using only the population 65 and over, the bed-to-population ratios are 36.4 in the north and 20.8 in the south for every 1,000 people. That analysis suggests an under-supply of nursing home beds in the south. Assuming that all 168 beds are approved in southern Palm Beach County, Regents Park's health planning expert determined that the imbalance in the bed-to-population ratios will continue with 35.58 beds per thousand in the north and 19.38 beds per thousand in the south in the year 2000. The need in the south is also reflected in occupancy rates for southern areas. Nursing homes in Boca Raton, for example, have a higher occupancy rate than those in other areas of the County, except the remote area of Pahokee located between the Everglades and Lake Okeechobee. Occupancy rates were 85 percent in the north, with some new startup facilities, and 91.99 percent in the south, from July to November 1996. By calendar year 1997, the occupancy levels were 88.07 percent in the north and 91.32 percent in the south. HCR in Boca Raton, at the time of hearing, had a census of 103 in 110 beds or 93 percent occupancy, despite a disproportionately large turnover for short stay rehabilitative, up from 86.23 percent occupancy in 1997. Within an 8-mile radius of Heritage Park, occupancy rates exceeded 91 percent in 19 nursing homes. That area corresponds to the southern one-third of Palm Beach County, in which Whitehall Boca is also located. Whitehall Boca had an occupancy rate of about 92.45 percent at the time the applications were filed. At the time of hearing, Whitehall Boca was fully occupied, at approximately 96 or 97 percent. In addition, Whitehall Boca usually has approximately 20 people on its waiting list at any time, and typically rejects 40 or 50 referrals a month. Arguing that the existing nursing beds are well distributed geographically, one expert proposed approvals of new beds that would also be well dispersed. Testifying on behalf of Beverly, that expert suggested a need for the combination of Beverly's 48-bed addition, Heritage Park's 17-bed conversion, Marriott's 45-bed new construction, Whitehall Boca's 48-bed conversion, and HCR's conversion of 10 private to semi-private rooms. In general, geographically, the demonstrated need for additional nursing beds is greatest in the area of Pahokee, followed by Boca Raton in the south, then by the northern community of Jupiter, and the central area of Royal Palm, in that order. In each of these areas, nursing home occupancy rates exceed the 90 percent threshold favored in state health plan preference one. If the Town of Royal Palm is considered a part of the West Palm Beach service area, however, with an average overall occupancy rate of 88.6 percent, then it does not meet the location needs test in state health plan preference. In general, the location of Royal Palm, separate and distinct from West Palm Beach, as indicated in part by the differences in nursing home utilization, justifies some separate consideration of the need for additional beds at Royal Palm. SHP 3 - specialized ARD, AIDS or mental illness care; DHP 2 (c) mental health and subacute care; SHP 6 - innovative therapies; and DHP 3 - distinct needy population group The parties distinguished the need for their proposals on the basis of programmatical and cultural considerations, as well as geographical differences. In fact, as noted in Beverly's description of its geographical location, a related consideration is its availability for residents discharged from area acute care hospitals. Manor Care also presented evidence of the need for more ARD units in the northern areas of the county. The experts agree that at least 50 percent of nursing home residents have some ARD. Based on the information gathered by Manor Care's expert planner, there was only one 20-bed ARD unit in the Jupiter area at the time Manor Care prepared its CON application. In addition to its location in southern Palm Beach County, Heritage Park asserted a need for its service based on cultural considerations. Heritage Park, which is 90 percent Jewish, offers Kosher food and celebrates Jewish holidays. Two other facilities within the district also provide the same special services for Jewish residents, Menorah House in Boca Raton and Joseph Morris Geriatrics in West Palm Beach. The high occupancy rates and difficulty in getting Medicaid beds in facilities catering to Jewish residents are, in part, the basis for the asserted need for additional nursing beds at Heritage Park. While some other facilities may not provide the same cultural environment as those which are considered "Jewish" nursing homes, it is important to note that Kosher food is widely available and provided at other facilities, if necessary, through contractual arrangements. The most unique proposal is that of Regents Park to serve exclusively a population described as geriatric psychiatric residents. There is no facility in existence anywhere which treats exclusively the conceptually targeted population. Geriatric psychiatric residents are defined as those who are nursing home eligible medically, but who also have a secondary diagnosis of a mental illness, such as acute depression, schizophrenia, bipolar disorders and some forms of reversible dementias. Targeted residents do not include those with Alzheimer's or other non-reversible dementias, but only those with treatable chronic mental illnesses. Regents Park suggests that these residents are currently in nursing homes, inappropriately placed in ARD units and/or inadequately treated for their mental illnesses. Using acute care hospital discharge data for Palm Beach County for the twelve months ending September 30, 1996, Regents Park identified a total of 8,848 patients aged 65 and over with primary medical and secondary psychiatric diagnoses. Of these, 2,364 with an average age of 69 years, were discharged to nursing homes. Regents Park intends to train its multi-disciplinary staff, including nurses aides, to manage and treat mentally ill residents. The care proposed is intended to respond to the failure of nursing home residents to thrive as well as to managing disruptive, behavioral consequences of mental illnesses. To some extent, all of applicants already do or expect to care for mentally ill residents. It is typical for the physical conditions of nursing home residents to coincide with depression or anxiety. Behavior modification and appropriate medications are used to treat mental illnesses in all nursing homes. Employees are trained, in general, to handle behavioral problems. When the problem is recognized as psychiatric or the resident becomes too difficult to handle, the resident is generally transferred to an acute care or psychiatric hospital. Within the nursing homes, mental health services are usually provided through contractual agreements with psychologists or psychiatrists. Some facilities, such as Heritage Park, also use the services of psychiatric nurses provided through its home health agency. Limitations and uncertainties exist, however, concerning Regents Park's ability to attract and treat targeted residents differently from any other nursing home. Only a person with a medical need for help with certain activities of daily living may lawfully be admitted to a nursing home. Regents Park is also excluding residents with ARDs which are not reversible, and those who are violent or dangerous. Assuming all of the 2,364 medical/psychiatric discharges to nursing homes in 1995-1996 met the other criteria for admissions and treatment at Regents Park, it is impossible to determine whether those residents and their families would have chosen or been directed to Regents Park as compared to any other nursing homes. Regents Park intends to rely on linkages with mental health professionals, but expert testimony about nursing home placements included various other considerations, including proximity to an acute care provider and proximity to families, as well as the nature of the services provided. A combination of small projects was suggested because of the range of services offered at different locations throughout the County. Marriott's continuum of care, with assisted living and skilled nursing beds, would be introduced in the north, for example. Beverly, in the west central, would add general care and dementia unit beds. In the south, Heritage Park would give special care for ARD residents. HCR would do the same for post-acute rehabilitative services, including apparently introducing blood transfusions to skilled nursing services. Whitehall Boca would expand an existing facility which already has a broad range of services. In general, that combination increases existing beds by 45 in the north, 48 in the west central area, and 75 in the south. Another combination intended to distribute beds geographically and programmatically was Manor Care's 90 beds in the north with a 34-ARD unit, Beverly's 48 beds in the west central area with a new ARD unit, HCR's 10 and Heritage Park's 17 beds in the south with more subacute and ARD care, for a total of 165 beds. This combination has the disadvantage of new construction of the largest number of beds in the areas of lesser relative need, which is also the disadvantage of combining Manor Care's and Life Care's 120-bed proposals with either of the 48-bed proposals. More beds can be shifted to the south by substituting Whitehall Boca for Beverly as the 48-bed provider. The combination of Manor Care's 90-bed project with the three smaller southern projects has the disadvantage of creating three beds fewer than needed, but introduces another ARD unit and a broader range of services to the Jupiter area. That combination increases ARD beds by 51 and Medicare by 57 beds. 408.035(1)(c) - ability and record on quality of care, SHP 8 - historically superior care, and DHP 2(a) history of good care Marriott held 6 superior, 2 standard and 1 conditional Florida nursing home license at the time it filed this application. Heritage Park has had deficiency-free or relatively minor, Class 3 deficiencies cited during state inspections. Heritage Park has never had a moratorium on a facility. Although it has never operated licensed nursing beds, Heritage Park's experience, since 1986, operating licensed assisted living facilities with extended congregate care, has been sufficiently similar to establish its ability to provide good care. Whitehall Boca and HCR hold superior state licenses and are accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO). Whitehall Boca's accreditation includes its subacute care program. The parties stipulated that Whitehall Boca meets the criteria related to quality of care. With an average of 20 surveys a year, HCR has had one survey in the last three years in which the state noted a condition of immediate jeopardy to residents. Regents Park operates Regents Park of Boca Raton, a superior licensed facility which has had deficiency-free resident care surveys for five years. That facility has JCAHO accreditation. In general, Whitehall Boca and Regents Park have had the most successful records on quality of care, followed by impressive survey results at HCR and Heritage Park. Two-thirds of the Marriott facilities in Florida are licensed superior. For nine consecutive years, Beverly's Royal Palm has held superior licenses. It has been JCAHO-accredited since 1995. As of May 1997, twenty-two of Beverly's forty-five Florida facilities or approximately one-half were licensed superior. At the time of the final hearing, Life Care affiliates operated 9 nursing homes in Florida with 3 more under-development and another CON-approved. Of the 9 operational facilities, one is licensed superior, 2 are standard but eligible for superior licenses, 2 are standard because they have not been operational long enough to qualify for superior licenses, and four are standard. One of the standard operations is being relocated to a replacement building. Life Care has never had a license denied, revoked or suspended due to issues related to quality of care. In Florida, Manor Care had 11 superior nursing homes, 1 standard but not yet eligible to be superior, and 1 standard at the time of hearing. In 1997 and 1998, two of the three Manor Care facilities in Palm Beach County had conditional ratings, each for approximately six weeks, because one resident in each developed pressure ulcers. In general, Manor Care, then Marriott have better licensure ratings than Beverly, followed by Life Care. SHP 11 - to ensure residents rights and privacy, quality assurance and discharge planning The applicants have documented procedures to ensure residents rights and privacy protections, as required by law. All allow for some input by resident councils, ombudsman oversight and/or family council representation for residents, as noted by Heritage Park especially for those in more advanced stages of dementia. Each applicant has appropriate, established quality assurance and discharge planning procedures. 408.035(1)(d) - availability and adequacy of alternatives to nursing beds The parties agree that 168 additional nursing beds are needed in Palm Beach County. There was no evidence of available alternatives. Heritage Park is the only applicant participating in a pilot project to determine the feasibility of diverting Medicaid residents from nursing homes to assisted living facilities. There was no evidence of results or any new policy directives based on the pilot project. 408.035(1)(e) - economies and improvements from operation of joint or shared health care resources All of the applicants have existing health care operations in the County. Regents Park, Life Care and Manor Care can benefit from locating a new 120-bed facility, or 90-bed for Manor Care, near their existing operations, drawing on established relationships in the health care network. Marriott, although proposing new construction, will also have some economies in nursing costs as a result of shared operations with the assisted living portion of its retirement community. Beverly's new construction of 48 additional beds on adjacent vacant land, using the existing kitchen and recently enlarged therapy spaces enhances efficiencies at Royal Palm. The economies and efficiencies of operations at HCR, Whitehall Boca and Heritage Park will be improved by their planned conversions of existing spaces to more intensive uses. Strictly construed, however, none of the applicants proposes to operate jointly with or to share facilities with a different health care provider. 408.035(1)(f) - need for special equipment and services not accessible in adjoining areas None of the proposals addresses a need beyond the service area. To the extent that its services are unique, Regents Park expects but is not relying on drawing residents from Broward County. 408.035(1)(g) - need for research and educational facilities The needs of research and educational facilities are inapplicable to this proceeding. 408.035(1)(h) - personnel and staffing; SHP 9 - higher RN and LPN ratios; SHP 10 - interdisciplinary professional staff, SHP 12 - lower administrative, higher residential care costs than district average; and DHP 2(b) - higher staffing ratios All of the applicants propose staffing ratios that are higher than minimum state requirements. They all use or will use various therapists, social workers, and mental health care professionals in addition to medical doctors and nurses. Because their services differ, the staffing patterns also differ appropriately. In general, of the 120-bed applicants, Regents Park proposes the largest number of employees devoted to patient care, including twice the number of certified nurse assistants (CNAs) as required. Regents Park will retain the services of a psychiatrist as one of its two medical directors. Life Care believes that its continuity of care is enhanced by using in-house rather than contract therapists. At its existing Palm Beach County facilities, Life Care provides 2.8 to 3.05 nursing hours per resident day, as compared to the state requirement of a minimum of 2.2 hours per resident day. Manor Care proposed to provide 3.4 nursing hours per resident day, including an average of 4.7 hours in the Medicare unit, 2.8 to 3 hours in the ARD unit, and 3.28 in the rest of the nursing home. Beverly will have 3.6 hours of nursing care per resident day, including a registered nurse 24 hours a day, seven days a week, and employs in-house therapists. HCR proposes the highest ratio of licensed nurses to residents. With a physiatrist and a pulmonologist as medical directors, HCR offers extensive rehabilitation and complex clinical services. Because Marriott plans less intense subacute care in only 8 Medicare beds, it will not have 24-hour RN coverage, but will offer 3.11 hours of nursing care per resident day. Although it subcontracts for occupational and speech therapists, Whitehall Boca has three full-time in-house physical therapists in a 10-person department. Whitehall Boca also has a pulmonologist on staff to provide intense respiratory and ventilator therapy to higher acuity residents, as recognized, in part, by Whitehall Boca's Health Care Finance Administration (HCFA) rate exception. In response to the needs of residents with ARD, Heritage Park employs fewer nurses, but more people for longer hours for its activities' staff which has 5 full-time equivalent employees (FTEs), including a clinical social worker. Using different base years and inflation rates ranging from 3.5 percent to 6.29 percent, the parties estimated resident care costs and administrative costs per resident day for the year 2000. The result is a range in the estimated year 2000 district averages which compares to the applicants' projected costs as shown below: Resident Care Cost Administrative Costs District Average ($) 77.40-88.33 36.48-41.95 Beverly 67.34 20.00 Life Care 70.87 26.76 Marriott 77.39 32.47 Manor Care (120 beds) 77.75 33.93 Manor Care (90 beds) 81.46 37.57 Heritage Park 89.63 31.76 HCR 108.28 28.50 Whitehall Boca 115.29 58.72 Regents Park 117.97 37.95 Whitehall Boca attributes its non-compliance with the portion of the preference related to administrative costs to higher salaries and fringe benefits, but not owners' profit. The higher, preferable resident care costs at Regents Park, Whitehall Boca and HCR reflect not just higher quality, but is consistent with higher resident acuity levels requiring more intense therapies, including mental health therapy at Regents Park. In general, the projected lower administrative costs indicate more operational efficiencies and lower profit-making than average at Beverly, Life Care and HCR. HCR is the preferable applicant in both categories, followed by Heritage Park. 408.035(1)(h) and (i) - immediate and long-term financial feasibility Heritage Park, Whitehall Boca, Beverly and HCR established the ability to fund, and the short and long-term financial feasibility of their proposals. Marriott The parties stipulated to the ability to fund and the short-term but not the long-term financial feasibility of Marriott's proposal. At issue are Marriott's projected occupancy level and experiences at other facilities. Marriott projected 93 percent utilization in year 2. By comparison, the weighted average occupancy was 86.7 percent in 1997 in Marriott's three Palm Beach County facilities, with overall district occupancy just over 90 percent. For example, Marriott's Brighton Gardens of Boynton Beach reported 89.14 percent occupancy and $167,000 in losses in 1997. Another Marriott facility in Palm Beach, Stratford Court Health Care Center averaged 86.15 percent occupancy in 1997. Using the rate of qualified people, those needing help with instrumental activities of daily living, multiplied by the number of single households of persons aged 75 and over, Marriott assessed the need for its assisted living beds. If it attracts 6 percent of those in need in northern Palm Beach County, then Marriott's occupancy will be 111 in 119 assisted living beds or 93 percent. Based on its projected occupancy, Marriott's pro forma shows profits in the nursing beds of $353,000 and $491,000 for the entire operation. The most comparable facilities to that proposed by Marriott are the existing Brighton Gardens in Palm Beach County. In the published data supporting the need for 168 additional beds, the utilization is 87.91 percent for Boynton Beach and 93.46 percent for the West Palm Beach Brighton Gardens. Marriott considers those facilities to be an earlier generation model which is smaller, with 29 and 30 nursing beds and 102 assisted living beds, than the current model. Marriott reasonably expects better economies in the larger facility it has more recently designed to accommodate 45 nursing beds and 119 assisted living beds. Marriott's financial feasibility is demonstrated based on that distinction and expectation. Manor Care Manor Care expects to generate a profit of 7 percent for 120 beds, or 3 percent for 90 beds. Nationally, Manor Care's profit margin from all its operations is 13 percent. Manor Care could seek to increase the profits from this proposal by applying for a reduction in the Medicaid condition on its CON. Manor Care has had Medicaid conditions reduced from 43.3 to 28.3 percent at a Palm Harbor nursing home, and from 34.3 to 20.61 percent in Sarasota. There is, however, no evidence to support the assumption that Manor Care requires each entity within its huge system to achieve a 13 percent profit margin within two years, nor that demographic conditions will justify reductions in its Medicaid commitment. Manor Care has included revenues but not expenses for an outpatient clinic in its pro forma. There is also evidence that Manor Care should have included more interest expense, but there is no testimony that Manor Care's proposal is rendered infeasible if outpatient clinic revenues of $116,900 for 90 beds or $241,000 for 120 beds are deleted and interest increased, but only that its profit margin could be further reduced. Life Care Based on lending commitments, funds are available to complete Life Care's project. The six Life Care nursing homes in Florida showed expenses exceeding revenue, or net losses, in 1996. In 1997, six of seven Life Care facilities showed losses, raising doubts about the long-term financial feasibility of this proposal. Life Care explained that losses have resulted from refinancing facilities to withdraw cash for reinvestment or further development. As a private company, Life Care relies on debt to raise capital. Life Care also noted that it has had a positive cash flow from operations at its facilities. The losses are shown on revenue and expense statements taking into account non-cash items, such as depreciation and amortization. In determining long-term financial feasibility, it is appropriate to consider non-cash items included in revenue and expense statements prepared according to generally accepted accounting principles. Otherwise, there is no measure of the financial ability to generate sufficient revenue to cover expenses over time, including necessary replacements of assets. Using these pro forma financial statements, Life Care has not shown that its proposal is financially feasible in the long-term. Regents Park The immediate financial feasibility of Regents Park's proposal was criticized because of discrepancies in available funds for all projects, and underestimated land and movable equipment costs. Since the other project listed on Schedule 2 has, in fact, been completed, the mathematic discrepancy in total projects and available funds does not affect financial feasibility. Regents Park's projected purchase price for land was $400,000, as compared to $975,000 by Manor Care, and $1,050,000 by Life Care. In general, land values are higher and fewer sites are available in the southern area, where Regents Park expects to locate. Although there was testimony that a Regents Park officer has found some parcels for $60,000 an acre, the size of the tracts was not established. Considering the substantial, credible undisputed expert testimony that zoning or county commission requirements will have to be met on any parcel developed, Regents Park's estimate is unrealistically low. In addition, of the applicants in this case, Regents Park plans to build the largest 120-bed facility with 64,000 square feet, which exceeds that designed for Life Care by over 6,500 square feet and the Manor Care 120-bed building by over 10,000 square feet. Expert estimates that the land cost is underestimated by approximately $500,000 are reasonable. There was also expert testimony that Regents Park underestimated the cost of equipment, at $2,000 per bed, by at least $2,500 to $5,000 per bed. That conclusion was based on an estimate of the need for equipment valued at approximately $140,000 for the kitchen, $75,000 for therapy equipment and office furnishings, $100,000 for 10 lounges, $60,000 for dining areas, $50,000 for other offices, $50,000 for nurse stations, $20,000 for laundry equipment, plus $60,000 for freight and taxes. The experts differ, to some extent, over the classification of various items, whether appropriately included in construction costs, furnishings or equipment. Regents Park failed to establish that all the necessary items are included in any of the categories. Regents Park's total equipment cost of $440,000 is unreasonably low, when compared to Life Care's estimate of $750,000 (all of which it included in building costs, but also listed separately) or Manor Care's estimated $1.3 million. Regents Park concedes that its movable equipment estimate is too low when, by comparison, its existing facility has an inventory of $852,000 in equipment and furnishings, or $7,100 per bed. Regents Park will finance its project with a Department of Housing and Urban Development (HUD) insured loan. HUD loans require owners to make a 20 percent contribution to equity. Regent Park's owners intend to borrow that 20 percent which is apparently permitted under HUD rules as long as there are no other mortgages or liens on the property. Regents Park, therefore, established the short-term financial feasibility of its proposal only in terms of the availability of funds, but not considering the reasonableness of estimated project costs. Regents Park's projection of 95 percent occupancy in year two, higher than the current district average, is reasonable for two years from now. That does not, however, reflect more selective screening for geriatric psychiatric patients who are estimated to be approximately 60 percent of the current census at the existing Regents Park. Of greater concern with respect to long-term financial feasibility is Regents Park's projected payer mix, which is not supported by its experience. For example, managed care averages 2 to 5 percent in nursing homes and 1.9 percent at the existing Regents Park facility, but is estimated to increase to 17 percent at the new facility. Regents Park failed to establish that its project can attract the payer mix it proposed, particularly from the relative high reimbursement sources, such as Medicare and managed care. Therefore, Regents Park failed to demonstrate the long-term financial feasibility of its proposal. EFFECT OF PPS In 1997, Congress enacted the Balanced Budget Act which included revisions to the Medicare system. During the final hearing, on May 12, 1998, some of the regulations implementing the new Medicare payment system were adopted. The new prospective payment system (PPS) will provide a flat per diem rate of reimbursement for services provided to residents based on their diagnoses, as classified into resource utilization groups (RUGs). Nursing homes will be responsible for containing costs within that per diem rate. All of the applications were submitted with revenues calculated under the cost-based system, which allows nursing homes to contract with therapists who bill Medicare directly for actual costs. With PPS limiting reimbursement, it is reasonable to expect all providers to respond by limiting costs accordingly. At the time of the hearing, however, it was impossible to determine exactly what their rates will be or how each provider will respond. Therefore, it is impossible to determine the impact of PPS on the financial feasibility of any of the applicants' proposals. The experts seemed to agree only that the three-year phase in period for facilities with established, 1995 rates, will benefit existing providers. 408.035(1)(j) - special needs of HMOs As stipulated by the parties, the criterion is inapplicable. The applicants are not health maintenance organizations. 408.035(1)(k) - needs of entities serving non-residents The parties agree that the criterion is inapplicable to these proposals. 408.035(1)(l) - impact on costs; effect of competition 408.035(1)(m) - cost and methods of construction; 408.035(2)(a) and (c) - less costly, more efficient or appropriate arrangements and alternatives to new services and new construction; SHP 7 - charges not exceeding highest Medicaid Manor Care operates 480 licensed and 120 approved beds in Palm Beach County, which is approximately 10 percent of the total in the County. Life Care currently operates 327 beds in Palm Beach County, 107 at Lakeside Health Center and 220 at Darcy Hall. HCR operates 350 nursing beds in the County, while Marriott operates 119 nursing beds and 204 assisted living beds. Beverly, the testimony established, operates at least 240 beds in the County, at Royal Palm and Haverhill. Regents Park has one 120-bed facility with 60 additional approved beds, and Whitehall Boca has 99 operational and 7 approved nursing beds. Competition is, therefore, theoretically enhanced by bringing Heritage Park into the nursing home arena with more approved nursing beds and by increasing the number of beds at Whitehall Boca. As evaluated using state health plan preference 7, proposed charges should not exceed highest subdistrict Medicaid per diem rate, except to serve upper income residents. Whitehall Boca and HCR will serve upper income residents. The highest projected Medicaid rate for the year 2000 is approximately $136.97, which is exceeded only marginally by Marriott at $137.61. In terms of Medicare, the projected rate of $325.40 in year 2 is exceeded in all of the proposals except Manor Care, and by relatively small increments by Heritage Park, Life Care and HCR, in that order. There is no evidence that existing nursing beds are not used efficiently and appropriately, or any doubt that additional beds are needed. Construction costs are summarized as follows: Number of beds Square Feet $(000s) Total $(millions) Marriott 45 18,436/81,800* 51 1.9 Heritage Park 17 (existing beds) 22 .150 Whitehall Boca 48 (existing beds) 27 .178 Beverly 48 18,500 42 1.7 HCR 10 (existing space) 21 .200 Regents Park 120 64,000 55 5.8 Manor Care 120 52,328 41 3.9 Manor Care 90 41,452 44 3.1 Life Care 120 57,500 47 5.2 * combined skilled nursing and assisted living beds. In terms of lowest total construction costs and the more efficient utilization of existing beds and spaces, the proposals of HCR, Heritage Park, and Whitehall Boca are preferable to add 75 beds for an approximate total building cost of $600,000. With 10 additional beds, HCR can also, for example, reduce operating costs by $22 per patient day. Once the three are combined for a total of 75 beds, all new beds are in the southern area, the area of greatest need in Palm Beach County. With only 93 remaining beds, it is mathematically impossible to recommend approval of Regents Park, Life Care or Manor Care's 120-bed application. Manor Care's 90-bed proposal in the north or Marriott's 45 in the north combined with Beverly's 48 in west central Palm Beach County are the remaining competing applicants which can be approved, if they otherwise meet the CON criteria. Separately and independently considering the least costly means for the addition of 168 beds, assuming all other factors were equal, the result is the combination of Marriott, Heritage Park, Whitehall Boca, HCR and Beverly for a total of approximately $4 million. Leaving out 48 beds to make a more direct comparison to the 120-bed proposals, the 120-bed combination of smaller projects with Whitehall Boca costs $2.43 million, or with Beverly $3.95 million in building costs. Except Manor Care's 120-bed cost of $3.9 million, either combination of smaller projects is preferable, in terms of cost alone, to over $5 million for the construction of new 120-bed nursing homes by Life Care or Regents Park. Similarly, comparing only building costs, the combination of Marriott and Beverly adds 93 beds for approximately $3.6 million, while the cost of Manor Care's 90-bed proposal is approximately $3.1 million. The need for 168 additional beds can also be met by a combination of a 120-bed applicant with either of the two 48-bed applicants. Construction costs range from approximately $7.5 million for Regents Park and Beverly, to $4.1 million for Manor Care and Whitehall Boca. In terms of cost, quality of care, and need, including the single geographical area of greatest need, the combination of Regents Park and Whitehall Boca is the most desirable, if any new 120-bed facility is constructed. The reasonableness of Life Care's estimates of construction costs using the same cost plus system as proposed in this case, has been significantly undermined based on the past need to file for cost overruns. The following Life Care projects have received CONs for cost overruns: No. of beds (Location) Initial Final Estimate* Cost* 111 (Citrus County) 4.7 5.6 120 (Orange Park) 5.4 7.8 60 addition (Orange Park) 2.2 3.9 77 (Wells Crossing) 4.5 5.4 34 addition .8 2.4 *All amounts are in millions of dollars SHP 5 - residential design features, including landscaping Marriott features five landscaped courtyards around a "T" shaped building. Resident rooms have a toe-to-toe furniture arrangements with an oversized window for each resident. Bathroom and residents room doors are aligned to ensure privacy and safety if a resident falls. Marriott plans to use wallpaper and carpeting to enhance the residential character of the building. Heritage Park uses Queen Anne furniture because it is sturdy and upright, and also recognizable as having been fashionable during the lifetime of the elderly residents. Heritage Park features crown molding in hallways and carpeted, oversized resident rooms, each with a bathroom large enough to accommodate a 3 foot by 6 1/2 foot shower. Whitehall Boca also has oversized rooms and features wide, carpeted hallways and 9 foot high ceilings. The award- winning design of the center core of the building resembles a street market. Beverly's resident rooms exceed minimum size requirements and have room temperature controls, telephone and cable television connections. The proposed addition will increase the number of enclosed courtyards from two to four, with one for ARD residents adjacent to their separate dining and activity areas. HCR will convert an existing 50-bed nursing care unit to a 60-bed unit. The ten private rooms which will become semiprivate have a minimum of 182.5 square feet, as compared to the state minimum requirement of 160 square feet. HCR uses lighting and different color schemes to create a residential atmosphere. Life Care's design was criticized as an "institutional" rectangular building with long corridors, but that also provides good visual monitoring from nurses stations in the center of the corridors. Windows from 32 rooms look out on other portions of the building. Life Care has attempted to minimize the institutional effect with a vaulted ceiling entrance and courtyards on two sides of the dining room. Life Care has separate entrances for physical therapy and adult day care. Manor Care has developed a prototype nursing home, which evolves from staff feedback each time a new facility is built. Manor Care uses "jogged" corridors, skylights, recessed areas to minimize the institutional effect of relatively long corridors. Regents Park plans to create a central core of offices, therapy spaces, and laundry and kitchen areas. Adjacent to and on each side of the central core are the two main dining rooms. The 60 beds on each side of the facility are divided into "X" shaped corridors, with 15 beds in 3 private and 6 semiprivate rooms on each wing, and nurses' stations in the center of each "X." Regents Park's plan is the most residential of the 120-bed designs. The corridors are short with skylights, and every resident room window has an unobstructed view beyond the building. To accommodate psychiatric residents, lighting is hardwired to avoid exposed cords, and electrical outlets are recessed into boxes. For safety, beds are hand-cranked, not electric, and window shade cords are breakaway plastic. 408.035(1)(n) - past and proposed Medicaid, SHP 2 - Medicaid proportionate to subdistrict average except multi-level systems, and DHP 1 - minimum of 30 percent Medicaid With the exception of Whitehall Boca and HCR, the applicants propose to participate in the Medicaid program and agree to provide at least 30 percent of total patient days to Medicaid, as suggested in district health plan allocation factor one. The proposed Medicaid commitments are as follows: Whitehall Boca 0 percent HCR 0 percent Marriott 30 percent Regents Park 30 percent Manor Care 40 percent Beverly 53.8 percent Life Care 54 percent Heritage Park 54.8 percent The nursing homes in the Palm Beach County subdistrict had an average of 53.7 percent of total resident days for Medicaid in the last 6 months of 1996, and 53.9 percent for the same period in 1997. Therefore, Beverly, Life Care and Heritage Park also meet the Medicaid standard established in state health plan preference two. HCR, Marriott and Whitehall Boca are entitled to an exception from the state health plan preference as multi-level health care systems. Marriott combines nursing and assisted living care. In addition to long-term nursing care, Whitehall Boca offers adult day care. HCR will provide nursing and home health care, and owns a physician group practice in Palm Beach County. Heritage Park is also a multi-level provider, offering nursing, assisted living and home health care but, nevertheless, complies with state health plan preference two. Regents Park and Manor Care do not meet the state health plan preference for providing Medicaid in proportion to the district average. In terms of total number of Medicaid beds, the combination of HCR, Marriott, Beverly, and Heritage Park was suggested by Beverly's expert as a means for providing 120 beds with more Medicaid days than any of the 120-bed applicants except Life Care. All of the proposals are generally consistent with the applicants past Medicaid performances. Heritage Park has 29 nursing beds with a 65 percent Medicaid commitment which, when combined with 17 additional beds at 54.8 percent, gives a blended rate of 61.5 percent in 46 beds. Heritage Park has served over 90 percent of the Medicaid waiver program participants in the district. With the proposed addition, Beverly will have a blended Medicaid commitment of 43.9 percent in 168 beds. Beverly currently provides an average of 67 percent of total care to Medicaid at Royal Palm, and 65 to 70 percent Medicaid in all Beverly nursing homes. Manor Care's proposed Medicaid commitment of 40 percent is slightly above the applicant's 1994-1997 experiences of 33.28 percent Medicaid at Boynton Beach and 39.88 percent in Collier County. Manor Care projected a decline in the Medicaid subdistrict average due to the nursing home diversion pilot project. Life Care serves from 65 to 70 percent Medicaid in its facilities, including the existing ones in Palm Beach County. The approvals of Beverly and Life Care would result in the largest total Medicaid commitment in 168 beds, but would not increase capacity in southern Palm Beach County. 408.035(l)(o) - continuum of care; SHP 4 - including respite and adult day care In the continuum of care ranging from skilled nursing, including a special ARD unit, subacute, respite, hospice to adult day care, Manor Care proposes all of the services with minimum conditions. Life Care will provide the same services with more adult day care then Manor Care, for 10 rather the 2 persons a day, but fewer ARD beds, 20 as compared to 30 or 34 in the two Manor Care proposals. Life Care does not offer any conditions on proposed levels of respite or hospice care. Regents Park will offer respite and subacute care in addition to the traditional long-term care. Marriott, Beverly and HCR offer long-term, specialized ARD, subacute, respite and hospice care, although Marriott's ARD unit is only in assisted living beds. HCR also owns a physicians' practice and operates a home health agency. The owners of Heritage Park and Whitehall Boca also own home health agencies, and provide a range of services which includes ARD, subacute, respite and adult day care. 408.035(2)(a) - additions of beds consistent with plans of other state agencies responsible for providing and financing long-term care Heritage Park participates in a Medicaid waiver program to divert residents from nursing homes to assisted living at substantial savings of $750 a month as compared to over $3,000 a month for nursing home residents. The pilot projects, including the expanded use of home health services, are promoted by the State Department of Elder Affairs. Other applicants argued that the trend should encourage applicants, such as Heritage Park, not to convert from assisted living to skilled nursing beds. Review of Applications on Balance Both Life Care and Regents Park failed to demonstrate the financial feasibility of their projects. In addition to not demonstrating long-term financial feasibility, Life Care was not sufficiently specific about its proposed location and has a less than superior architectural design and history of quality of care, as determined by licensure rating. Regents Park underestimated land and equipment costs, adversely affecting short-term financial feasibility, and lacked sufficient data to support its admittedly unique conceptual plan selectively to attract and serve geriatric psychiatric patients in a manner different from other nursing homes, particularly considering its proposed payer mix. On balance, the most efficient, least costly increase in the number beds in the geographical area of greatest need, in existing, high quality providers will result from the issuance of CONS to Whitehall Boca, HCR and Heritage Park. That results in a total of 75 beds in southern Palm Beach County. Whitehall Boca is the preferable 48-bed applicant over Beverly based on quality of care and location. Combining Manor Care's 120-bed proposal with Whitehall Boca's 48-bed proposal adds the largest number of beds to the northern area at greater cost than the smaller bed combinations, and excludes the efficient space conversions proposed by HCR and Heritage Park. The remaining choices are Marriott and Beverly, or Manor Care's 90-bed proposal. Of these choices, Manor Care is the more expensive total project at $7.3 million as compared to $6.1 million, but Manor Care is approximately $300,000 lower in construction costs. In addition, Manor Care offers to condition its proposal on providing the broadest range of services. Manor Care also has the higher resident care cost at $81.46, as compared to $67.34 for Beverly, and $77.39 for Marriott. In direct one-on-one comparisons, Manor Care better meets the state and local health plans preferences and related statutory criteria than Marriott, with distinctions based on location, charges, costs and proportion of total facilities licensed superior. In a similar comparison with Beverly, Manor Care's better record of superior care, creation of more ARD unit beds, and higher resident care costs outweigh Beverly's higher Medicaid commitment. Manor Care has demonstrated that no anti- competitive effects on costs or charges can reasonably be expected as a result of the establishment of another Manor Care facility in Palm Beach County. The three bed numeric need shortage is outweighed by the experts' unanimous agreement that ARD unit beds are needed and by Manor Care's history of providing superior care.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That the application of Whitehall Boca for certificate of need 8853, the application of Heritage Park for certificate of need 8850P, the application of Health Care and Retirement Corporation for certificate of need 8860, and the application of Manor Care for certificate of need 8856P be approved; and that all other comparatively reviewed co-batched applications for certificates of need be denied. DONE AND ENTERED this 9th day of November, 1998, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of November, 1998. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Paul J. Martin, General Counsel Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Richard Ellis, Attorney Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Douglas L. Mannheimer, Attorney Jay Adams, Attorney Broad & Cassel Post Office Drawer 11300 Tallahassee, Florida 32302 Alfred W. Clark, Attorney Post Office Box 623 Tallahassee, Florida 32302 Robert G. Schemel, General Partner Heritage Park of West Delray, Ltd. 5858 Heritage Park Way Delray Beach, Florida 33484 R. Bruce McKibben, Jr., Attorney Post Office Box 1798 Tallahassee, Florida 32302-1798 Robert Newell, Jr., Attorney Newell & Terry, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 Theodore Mack, Attorney Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303 R. Terry Rigsby, Attorney Geoffrey D. Smith, Attorney Blank, Rigsby & Meenan, P.A. 204 South Monroe Street Tallahassee, Florida 32301 James C. Hauser, Attorney Skelding, Labasky, Corry, Eastman, Hauser, Jolly & Metz, P.A. Post Office Box 669 Tallahassee, Florida 32302 W. David Watkins, Attorney Watkins, Tomasello & Caleen, P.A. Post Office Box 15828 Tallahassee, Florida 32317-5828
The Issue The issues presented here concern two administrative complaint letters filed by Petitioner against Respondent. Both complaint letters are dated March 26, 1982. The initial charges contain allegations concerning records keeping by Respondent related to patients and staff, and employee training, per Chapter 10A, Florida Administrative Code, and Chapter 400, Florida Statutes. The second prosecution letter alleges that one of the owners of the Respondent corporation acted as legal guardian for a resident in Respondent's facility, contrary to Chapter 400, Florida Statutes. EXHIBITS AND WITNESSES Petitioner presented two witnesses, Orey William Crippen, II, Adult Congregate Living Facility Licensing Office, State of Florida, Department of Health and Rehabilitative Services, District IV, and Charles H. Carter, Supervisor of Licensure and Certification, State of Florida, Department of Health and Rehabilitative Services, District IV. Petitioner offered ten exhibits which were admitted. Respondent presented Lynn Costner, co-owner of Lynn's Care Center, Inc. Respondent's four exhibits were admitted.
Findings Of Fact At all times pertinent to this case, Lynn and Ronny Costner were the owners of Lynn's Care Center, Inc., Respondent. In the relevant time sequence, that corporation operated through its co-owners. The business of Lynn's involved Adult Congregate Living Facilities, Phase II, by license issued by Petitioner in accordance with Chapter 400, Part II, Florida Statutes. One of the facilities was located at 1562 Garden Avenue, Holly Hill, Florida. The second facility was located at 1529 Ridge Avenue, Holly Hill, Florida. On January 25, 1982, the Garden Avenue facility was inspected by Orey William Crippen, II, a facility inspector for Petitioner. The purpose of the inspection was to monitor Respondent's compliance with regulatory provisions set forth in Chapter 10A, Florida Administrative Code, which was enacted to effectuate the purposes of Chapter 400, Florida Statutes. Crippen's inspection revealed that required documentation to demonstrate that facility residents Schofield and Thomaszewski had been examined by a physician or nurse practitioner to certify acceptability of their health status to reside in the center was not available in the facility at the time of the inspection. The information that was necessary would have had to demonstrate medical examination of the residents within thirty days of admission to the facility. Schofield had been admitted into the facility on November 30, 1981, and Thomaszewski had been admitted to the facility on November 6, 1981. In Schofield's case, there was no date of X-ray or examination shown in his file. Required medical information on the patient Thomaszewski was not available at the facility. Crippen also spoke with the co-owner Lynn Costner on January 25, 1982, to ascertain the whereabouts of the aforementioned medical information for the patients Schofield and Thomaszewski. This inquiry took place in the central office of Respondent at 73 West Granada Avenue, Ormond Beach, Florida. Although Schofield and Thomaszewski had been admitted to the hospital with medical examination information, this information was not available at the central office on the inspection date. Effective March 31, 1981, the necessary medical information was replaced by employees of the Respondent and the Schofield and Thomaszewski files were complete on the subject of the necessary documentation of health status. This replacement entailed the updating of material related to Thomaszewski, in that the medical examination information that accompanied him at the time of his admission to the facility was not current. While at the facility on January 25, 1982, Crippen was unable to find requisite information to establish that two persons working in the facility on the inspection day were free from communicable diseases. Nor was he provided necessary documentation demonstrating a negative tuberculosis test, via chest X- ray or physician statement certifying no tuberculosis, or information dealing with these employees related to communicable diseases detectable by skin tests. The employees were Judy Russell and Rick Costner, son of the owners of the facility. Again, Crippen's conversation with Lynn Costner in her Ormond Beach office on the date of inspection did not lead to the production of the necessary information to demonstrate that Judy Russell and Rick Costner were free from communicable diseases. Judy Russell and Rick Costner were no longer employed by Respondent on March 31, 1982. The facility did not have an employee on duty at the time of the January 25, 1982, inspection who was certified in an approved course in first- aid, which would include cardiopulmonary resuscitation, training in bleeding and seizure control or training in antidotes for poisons. By March 31, 1982, certain employees of Respondent had achieved first-aid training. Crippen's January 25, 1982, inspection did not uncover an employment application for Judy Russell or Rick Costner, either at the Garden Avenue facility or Respondent's office in Ormond Beach, Florida. Finally, Crippen's January 25, 1982, inspection did not reveal a signed contract between the residents Bateman and Thomaszewski and the facility at Garden Avenue. Bateman had been admitted to the facility on November 26, 1981. Those contracts were not made available by Lynn Costner when Crippen spoke to her in the Respondent's Ormond Beach office on the date of the inspection. The patients had entered the facility with contracts. Mrs. Bateman's contract had been signed by her nephew and Thomaszewski's contract had been signed by a relative. The missing contract problem was subsequently rectified, effective March 31, 1982, through efforts of employees of Respondent. On January 29, 1982, Charles H. Carter, Licensure and Certification Supervisor for District IV, wrote to Lynn and Ronny Costner, owners of Lynn's Care Center, and attached a deficiency statement document to that correspondence. A copy of the letter and deficiency statement may be found as Petitioner's Exhibit No. 1, admitted into evidence. The purpose of the letter and statement was to allow Respondent to offer corrections by written indication of steps to be taken to resolve problems discovered in the course of Crippen's inspection and the deficiency document contained a column for offering written corrections. It afforded the Respondent through February 15, 1982, to satisfy the problem related to employment applications for Judy Russell and Rick Costner. Respondent was allowed, until March 1, 1982, to correct all other violations alluded to in these findings, with the exception of the first-aid certification. On the subject of first-aid certification, Respondent was given through March 31, 1982, to verify certification. All corrections which were made related to allegations spoken to in the administrative complaint and reported in these facts date from March 31, 1982, and notification of those corrections in writing was received by Petitioner on April 5, 1982. The statement of corrections was reported on the deficiencies and corrections form mailed on January 29, 1982. Corrections were not verified by Petitioner. See Respondent's Exhibit No. 4. The corrections were made subsequent to an exit conference on January 25, 1982, held between Crippen and Lynn Costner in Respondent's Ormond Beach Office in which Costner was made aware of the related problems. With the exception of the matter related to first-aid, the written notification of corrections was not timely. By the letter of transmittal of the statement of deficiencies, Carter had advised Respondent that the failure to submit the plan of corrections within the time specified would lead to a finding of noncompliance by Respondent and the possibility of administrative fine. On March 5, 1982, not having heard from Respondent on the topic of the March 1, 1982, deadline for certain corrections, Carter again wrote the Costners, as owners of Lynn's Care Center at Garden Avenue, requesting that the response by statement of corrections be made no later than March 18, 1982. See Petitioner's Exhibit No. 2, which is a copy of the Carter correspondence. There being no reply to the March 5, 1982 correspondence, an administrative complaint letter was forwarded to Respondent, in the person of the Costners, Lynn's Care Center, at 1562 Garden Avenue, Holly Hill, Florida. This item was sent certified mail, return receipt requested. It set forth violations related to the deficiencies which have been discussed in this Recommended Order. The complaint was received by an employee of Respondent on April 2, 1982. See Petitioner's Exhibit No. 3 Respondent disputed the factual allegations in the complaint and a Subsection 120.57(1), Florida Statutes, hearing was conducted to resolve the dispute. On March 26, 1982, a second administrative complaint letter was served on the Costners reference a resident in their facility at 1529 Ridge Avenue, Holly Hill, Florida. That complaint was received on April 2, 1982, as shown by the certified mail return receipt request form. The administrative complaint and certified mail return receipt docket may be found as Petitioner's Exhibit No. 10, admitted into evidence, a copy of the complaint and receipt item. The complaint letter charged that Ronny Costner had acted as the legal guardian of Margaret Wells, a resident in the Ridge Avenue facility, and in doing so violated Chapter 400, Florida Statutes, and Chapter 10A-5, Florida Administrative Code. On January 19, 1982, letters of guardianship of the property of Margaret Wells had been presented to Ronny Costner, through action in the Circuit Court in and for Volusia County, Florida. See Petitioner's Exhibit No. 4, a copy of the order issuing letters of guardianship. On March 8, 1982, Charles Carter wrote to inquire of Ronny Costner on the subject of whether Costner was indeed the legal guardian of the property and suggested the impropriety of such guardianship. See Petitioner's Exhibit No. 9, which is a copy of the Carter correspondence. Resident Wells had been admitted to the Ridge Avenue facility upon referral by Dr. John Hall, D.O. At the time of admission, the Costners were unable to find family to serve as Wells' guardian. Wells was suffering from Organic Brain Syndrome. Following examination by two physicians and with the assistance of Patty Butcka, an Adult Caseworker with Petitioner, and her husband, serving as legal counsel, petition was made leading to the guardianship appointment of Ronny Costner for the benefit of Wells. During the time that he served as legal guardian he received no compensation. The guardianship of Wells was in view of the fact that no close relatives resided in the area where Wells was living. At the guardianship hearing no family member appeared or objected to the appointment of Costner as guardian. Following receipt of the March 8, 1982, letter from Carter, Costner employed counsel and petitioned the court to remove him as guardian for Margaret Wells, in view of the provision of Chapter 400, Florida Statutes, which would not allow Costner to act as guardian of a resident in his Adult Congregate Living Facility. An order was entered removing Costner as Wells' guardian and Ronny Costner no longer served in that capacity at the time of the final hearing in this cause.
The Issue Whether Respondents, Charleston Cay, Ltd., et al. (Charleston Cay), violated the Florida Fair Housing Act, as amended, sections 760.20 through 760.37, Florida Statutes (2010).1/
Findings Of Fact Ms. Cardwell is an African-American woman who rented an apartment from Charleston Cay. Ms. Cardwell and Charleston Cay entered into a written lease beginning on December 23, 2009, and ending on November 30, 2010. The lease required Ms. Cardwell to pay her rent on the first of each month and that the rent would be delinquent by the third of each month. Furthermore, the lease provided that non-payment of rent shall result in a breach of the lease and eviction. The initial monthly rent for Ms. Cardwell's apartment was $663.00, a month and was subsequently increased to $669.00, a month. Ms. Cardwell credibly testified that she had not read the lease or the Housing Addendum which she signed when entering into the lease and that she had not subsequently read either document. On November 1, 2010, Ms. Cardwell failed to pay her rent. On November 4, 2010, Ms. Jaster, manager of Charleston Cay apartments, posted a three-day notice to pay rent or vacate the premises. On November 9, 2010, Ms. Jaster posted another notice for Ms. Cardwell about non-payment and requesting that Ms. Cardwell call or come to the office. Ms. Cardwell paid $100.00, of the rent on November 17, 2010. Again, Ms. Jaster posted a three-day notice seeking payment of the remaining November 2010, rent in the amount of $569.00. On November 24, 2010, Ms. Cardwell paid an additional $200.00, of the $569.00, owed, leaving a balance of $369.00 for November 2010. Because Ms. Cardwell's written lease was to expire at the end of November, she requested that Charleston Cay enter into a month- to-month lease, but Ms. Jaster informed Ms. Cardwell that Charleston Cay was not interested in entering into a month-to- month tenancy. On December 1, 2010, Ms. Jaster posted another three- day notice requiring Ms. Cardwell to pay the $369.00, owed in November, or to vacate the premises. The facts also showed that Ms. Cardwell did not pay the $669.00, owed by December 1, 2010, or anytime thereafter. On December 8, 2010, Charleston Cay filed an eviction and damages complaint against Ms. Cardwell based on non-payment of the rent. Some time in December 2010, Ms. Cardwell contacted Ms. Tina Figliulo of the Charlotte County Homeless Coalition, seeking financial assistance to avoid being evicted. Ms. Figliulo credibly testified that the Charlotte County Homeless Coalition administers grant money to help prevent a person from being evicted and helps individuals find affordable housing. A provision of the grant, however, prevents the Charlotte County Homeless Coalition from paying money into a court registry if an eviction process has begun. Ms. Figliulo credibly testified that she contacted Ms. Jaster about making a payment on Ms. Cardwell's behalf. Ms. Jaster informed Ms. Figliulo that Charleston Cay had already begun eviction proceedings. Consequently, Ms. Figliulo was unable to use grant money to pay for Ms. Cardwell's back rent. Based on the eviction proceedings, Ms. Cardwell vacated the premises sometime in December 2010, and turned in her key for the apartment. The initial hearing on the eviction was set for January 5, 2011. On December 28, 2010, the hearing was cancelled based on Ms. Cardwell's vacating the premises. On January 13, 2011, Ms. Cardwell filed a Motion to Dismiss the case in county court indicating that she had given up possession of the premises. On January 31, 2011, the Charlotte County Court issued an Order dismissing the case effective March 1, 2011, unless Charleston Cay set a hearing on damages. The record credibly showed through the exhibits and Ms. Jaster's testimony that Ms. Cardwell was evicted from her apartment based on her non-payment of rent. There was no evidence that other individuals, who were not in Ms. Cardwell's protected class, were treated more favorably or differently, than she was in the proceedings. There was no evidence, either direct or indirect, supporting Ms. Cardwell's claim of racial discrimination. Ms. Cardwell testified that she felt that Ms. Jaster had acted based on race, because of Ms. Jaster's perceived attitude. Ms. Cardwell did not bring forward any evidence showing a specific example of any comment or action that was discriminatory. Ms. Jaster credibly testified that she did not base the eviction process on race, but only on non-payment. Ms. Cardwell specifically stated during the hearing that she was not addressing the retaliation claim or seeking to present evidence in support of the FCHR determination concerning the retaliation claim. Consequently, the undersigned does not make any finding concerning that issue. There was testimony concerning whether or not Ms. Cardwell had properly provided employment information required by the written lease in relation to a tax credit. The facts showed that Charleston Cay apartments participated in a Low Income Tax Credit Housing Program under section 42, of the Internal Revenue Code. On entering the lease, Ms. Cardwell had signed a Housing Credit Lease Addendum which acknowledged her participation in the tax credit, and agreement to furnish information concerning her income and eligibility for compliance with the tax credit. Failure to provide information for the tax credit would result in a breach of the rental agreement. As early of August 2011, Ms. Jaster, manager for Charleston Cay Apartments, contacted Ms. Cardwell about providing information concerning her income and continued eligibility for the program. Ms. Cardwell provided information that was incomplete as to her income, because it failed to demonstrate commissions that she earned. Again, in November 2010, Ms. Jaster contacted Ms. Cardwell about providing information to recertification for the tax credit. Finally, on November 11, 2010, Ms. Jaster left a seven-day notice of non-compliance, with an opportunity to cure, seeking Ms. Cardwell to provide information concerning her income. Ms. Cardwell provided information concerning her salary, but did not have information concerning commissions that she earned from sales. This information was deemed by Ms. Jaster to be incomplete and not in compliance for the low income housing tax credit. The record shows, however, that Ms. Cardwell's failure to provide the required income information was not a basis for her eviction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order of dismissal of the Petition for Relief. DONE AND ENTERED this 28th day of October, 2011, in Tallahassee, Leon County, Florida. S THOMAS P. CRAPPS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of October, 2011.
The Issue Whether Respondent, Manor Care of Sarasota, Inc., d/b/a Manor Care Nursing Center, committed a Class II deficiency at the time of a survey conducted on August 10 through 12, 2004, so as to justify the issuance of a "conditional" license and the imposition of an administrative fine of $2,500.
Findings Of Fact Based upon the evidence presented at the final hearing, the following relevant findings of fact are made: At all times material hereto, AHCA is the state agency charged with licensing of nursing homes in Florida under Subsection 400.021(2), Florida Statutes (2004), and the assignment of a licensure status pursuant to Subsection 400.23(7), Florida Statutes (2004). AHCA is charged with evaluating nursing home facilities to determine their degree of compliance with established rules as a basis for making the required licensure assignment. AHCA is also responsible for conducting federally-mandated surveys of long-term care facilities receiving Medicare and Medicaid funds for compliance with federal statutory and rule requirements pursuant to Florida Administrative Code Rule 59A-4.1288. Pursuant to Subsection 400.23(8), Florida Statutes (2004), AHCA must classify deficiencies according to the nature and scope of the deficiency when the criteria established under Subsection 400.23(2), Florida Statutes (2004), are not met. The classification of any deficiencies discovered determines whether the licensure status of a nursing home is "standard" or "conditional" and the amount of the administrative fine that may be imposed, if any. Surveyors note their findings on a standard prescribed Center for Medicare and Medicaid Services (CMS) Form 2567 entitled, "Statement of Deficiencies and Plan of Correction," which is commonly referred to as a "Form 2567." During the survey of a facility, if violations of regulations are found, the violations are noted and referred to as "Tags." A tag identifies the applicable regulatory standard that the surveyors believe has been violated, provides a summary of the violation, and sets forth specific factual allegations that the surveyors believe support the violation. Manor Care is a 178-bed nursing home located at 5511 Swift Road, Sarasota, Florida. Manor Care is licensed as a skilled nursing facility. On August 10 through 12, 2004, AHCA's staff conducted a survey at Manor Care. The Form 2567 completed during this survey found the facility in violation of Tag F425. This alleged violation formed the basis of AHCA's Administrative Complaint. Tag F425 relates to pharmacy services. The federal regulation with which Manor Care allegedly failed to comply is 42 C.F.R. Section 483.60, which provides in relevant part: The facility must provide routine and emergency drugs and biologicals to its residents, or obtain them under an agreement described in Sec. 483.75(h) of this part. 42 C.F.R. Section 483.75 provides generally that a facility "must be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental, psychosocial well-being of each resident." 42 C.F.R. Section 483.75(h) provides: (h) Use of outside resources. If the facility does not employ a qualified professional person to furnish a specific service to be provided by the facility, the facility must have that service furnished to residents by a person or agency outside the facility under an arrangement described in section 1861(w) of the Act[1/] or (with respect to services furnished to NF residents and dental services furnished to SNF residents) an agreement described in paragraph (h)(2) of this section. Arrangements as described in section 1861(w) of the Act or agreements pertaining to services furnished by outside resources must specify in writing that the facility assumes responsibility for-- Obtaining services that meet professional standards and principles that apply to professionals providing services in such a facility; and The timeliness of the services. Resident 10, a female who was 51 years old at the time of the survey, was initially admitted to Manor Care on December 19, 2003, with diagnoses that included diabetes mellitus, arteriosclerotic heart disease, peripheral vascular disease, depression, chronic obstructive pulmonary disease, and cerebral vascular accident with hemiparesis and intercerebral hemorrhage. Resident 10 was admitted to Sarasota Memorial Hospital for a surgical procedure on her leg, then re-admitted to Manor Care on August 2, 2004. The hospital's medical impression history and background included status post bilateral iliac angioplasty and stent, hypertension, a history of nicotine addiction, cigarette abuse, status post previous coronary stent, severe osteoarthritis, a history of lumbosacral disk disease with chronic pain syndrome, status post left thoracotomy, lower lobectomy for adenocarcinoma, a history of seizure disorder, and a history of moderate carotid stenosis on the right and left. Upon her re-admission to Manor Care on August 2, 2004, Resident 10 had an intravenous morphine pump at 25 mg per day for severe pain and a clonopin pump at 250 mg per day for back pain. She was also prescribed oxycodone (Percocet) "prn," or as needed, for breakthrough pain. Finally, she was prescribed fentanyl citrate (Actiq), a narcotic analgesic, in the form of a lozenge often referred to as a "lollipop," every three hours, as needed, for breakthrough pain. As a potent opiate, fentanyl is a Schedule II controlled substance that is subject to misuse, abuse, and addiction. The nurses' notes for August 2, 2004, indicated that Resident 10 was offered Percocet for her pain, but that she declined it. On August 3, 2004, the attending physician changed Resident 10's fentanyl prescription from "3 hr. prn" to "q. 2h," meaning from every three hours, as needed, to every two hours regardless of her expressed need. Manor Care's pharmaceuticals were provided by an outside pharmacy pursuant to a contract comporting with 42 C.F.R. Section 483.75(h). On August 7, 2004, Manor Care's staff faxed a refill order to the contract pharmacy requesting a refill of Resident 10's fentanyl. During the day shift on August 9, 2004, Diane Hinrichs, the LPN performing the narcotics count, noticed that the fentanyl count was low and that the pharmacy had not filled the August 7 refill order. She faxed a repeat refill order and phoned the pharmacy, which assured her that the fentanyl would be included in the pharmacy's 4:00 p.m. delivery to Manor Care. When the fentanyl was not delivered at 4:00 p.m., another Manor Care nurse phoned the pharmacy again. The pharmacy assured the nurse that the fentanyl would be included in the next scheduled delivery, at about 2:00 a.m. on August 10, 2004. Shortly before 2:00 a.m., Ms. Hinrichs was back on duty and phoned the pharmacy, asking whether she could obtain the fentanyl at Walgreens or some other alternate source. The pharmacist told her that she could not, but assured her that the fentanyl was "on its way." The fetanyl was not included in the 2:00 a.m. delivery. The duty nurse called the pharmacy immediately, then again at approximately 5:20 a.m., and was again told that the fentanyl was "on its way." The last dose of fentanyl in the facility was administered to Resident 10 at midnight on August 9, 2004. Resident 10 did not receive fentanyl, as ordered, at 2:00 a.m., 4:00 a.m., and 6:00 a.m. on August 10, 2004. She continued to receive the morphine and clonopin on the intravenous pump throughout the night. During the night, Resident 10 was offered Percocet as a substitute for the unavailable fentanyl. She declined the Percocet, stating that "it does not help at all." Manor Care's medication administration records indicated that Resident 10 had never taken Percocet. As noted above, Resident 10's physician had prescribed Percocet for breakthrough pain. The pharmacy delivered the fentanyl at approximately 7:40 a.m. on August 10, 2004, and the nursing staff administered the medication to Resident 10 at about 8:30 a.m. The pharmacy later investigated the situation and informed Manor Care that a pharmacy technician had miscalculated the amount of fentanyl that Manor Care was allowed to keep on hand and had placed the refill order in a "holding bin" for later delivery. The Manor Care nursing notes indicate that Resident 10's physician was notified of the unavailability of the fetanyl at some time on August 10, 2004. On August 11, 2004, the physician discontinued his order for Percocet and instead prescribed oral morphine (Roxanol) for Resident 10's breakthrough pain. The physician continued the prescription for fetanyl. One of Resident 10's diagnoses was a "history of nicotine addiction, cigarette abuse." Her night and early morning routine was sleep punctuated by frequent trips in her wheelchair to an outdoor gazebo designated by Manor Care as a smoking area. During the early morning hours of August 10, 2004, Resident 10 followed this routine. During the early morning hours of August 10, 2004, Resident 10 was observed by an experienced RN, Angela Miguel, and an experienced LPN, Diane Hinrichs, both of whom were familiar with Resident 10's condition, personality, and habits. Resident 10 did not complain to either nurse regarding pain caused by the missed doses of fentanyl. Neither nurse observed Resident 10 to exhibit any behavior indicative of pain. Resident 10 appeared to be going about her usual routine of sleeping, then going outside to smoke. Under the circumstances, neither nurse saw any reason or need to conduct a formal pain evaluation of Resident 10. Jane Sargent-Jefferson, the food service director, arrived at Manor Care at her usual time of 5:00 a.m. on August 10, 2004. She found Resident 10 asleep in her wheelchair outside in the smoking gazebo, which is adjacent to the Manor Care dining room. Ms. Sargent-Jefferson often found Resident 10 asleep in the gazebo during the early morning hours and would wake up Resident 10 and talk to her. She did so on the morning of August 10, 2004. Ms. Sargent-Jefferson testified that "the first thing out of [Resident 10's] mouth" was that "she was mad because her meds had been missed." Ms. Sargent-Jefferson stated that it was not unusual for Resident 10 to be angry and to complain when she was unhappy. Just the day before, Resident 10 had "stormed out" of the dining room when the chef's salad was not to her liking. Ms. Sargent-Jefferson had frequent conversations with Resident 10. On the morning of August 10, 2004, she spoke with Resident 10 on three separate occasions between 5:00 a.m. and noon. Resident 10 did not say that she had been in pain during the previous night. Ms. Sargent-Jefferson testified that Resident 10 "would tell you" if she was in pain. Ms. Sargent- Jefferson observed nothing out of the ordinary in Resident 10's appearance or behavior on the morning of August 10, 2004. On the morning of August 10, 2004, AHCA surveyor Barbara Pescatore was in the smoking gazebo when she was approached by a resident subsequently identified as Resident 10, who complained that she had not received prescribed pain medication from midnight until 8:30 a.m. Ms. Pescatore transferred the inquiry to Anne Dolan, the RN who had been assigned to survey the care of Resident 10. Ms. Dolan reviewed the facility's records and interviewed the staff. She learned that Resident 10's fentanyl doses were missed at 2:00 a.m., 4:00 a.m., and 6:00 a.m. on August 10, 2004, and that the 8:00 a.m. dose on that date was administered at about 8:30. She further learned the circumstances surrounding the lack of fentanyl in the facility in the early morning hours of August 10, 2004. At the hearing, Ms. Dolan, an expert in long-term care nursing, opined that Manor Care and its nurses had an absolute responsibility to ensure that Resident 10 had her medication and had it on time. She testified that at 10:00 p.m. on August 9, 2004, the nursing staff knew that there was only one dose of fentanyl remaining to administer and that it was the staff's responsibility to do whatever was needed to ensure there would be more medication to give Resident 10 after the last dose at midnight. Ms. Dolan testified that missed doses of a routine pain medication can cause unnecessary pain and a delay in the medication's effect when the doses are resumed. Ms. Dolan testified that she could see Resident 10 grimacing and wincing when she would feel pain in her leg. She testified that Resident 10's pain was relieved immediately when she received the fetanyl "lollipop."2/ However, Ms. Dolan was not present on the night in question, and the record gives no indication whether Ms. Dolan or any other AHCA surveyor simply asked Resident 10 whether she experienced increased pain when she missed the doses of fentanyl. No direct evidence was presented that Resident 10 expressed pain or complained of pain or discomfort due to the missed doses of fentanyl, either at the time or later. Dr. Franklin May, a senior pharmacist for AHCA, offered expert testimony and testified that the nursing staff's actions during the night of August 9, 2004, evidenced a "very severe" failure to deliver pharmaceutical services. He based this opinion on the fact that the regulations require that medication be provided in a timely manner. Dr. May was not involved in the survey process and did not interview Resident 10. Based on the records he reviewed, Dr. May testified that he could not say whether Resident 10 "needed" the fentanyl for pain between midnight and 8:00 a.m. Dr. May opined that when the dose of fentanyl was missed due to its unavailability and Resident 10 refused to take the alternative drug Percocet, the staff nurses should have performed an immediate pain evaluation and contacted the resident's physician for instructions. If the attending physician had been unavailable, then the nurses should have contacted Manor Care's director of medicine for instruction. Dr. May emphasized that the staff nurses did not have the discretion to allow the resident to simply miss doses of prescribed medicine. The contracting pharmacy's policy and procedure manual set forth the following policy: "When medication orders are not received or unavailable, the licensed nurse will immediately initiate action in cooperation with the attending physician and the pharmacy provider. All medication orders unavailable to the customer will be managed with urgency." The manual sets forth the following process to implement the policy, in relevant part (emphasis in original): If a medication shortage is discovered during normal pharmacy hours: A licensed nurse calls the pharmacy and speaks to a registered pharmacist to determine the status of the order. If not ordered, place the order or re-order to be sent with the next scheduled delivery. If the next available delivery causes delay or missed dose in the customer's medication schedule, take the medication from the emergency stock supply to administer the dose. If medication is not available in the emergency stock supply, notify the pharmacist and arrange for an emergency delivery. If a medication shortage is discovered after normal pharmacy hours: A licensed nurse obtains the ordered medication from the emergency stock supply. If the ordered medication is not available in the emergency stock supply, a licensed nurse calls the pharmacy's emergency answering service and request to speak with the registered pharmacist on duty to manage the plan of action. Action may include: Emergency delivery. Use of emergency (back-up) pharmacy. If an emergency delivery is unavailable, a licensed nurse contacts the attending physician to obtain orders or directions which may include: Holding the dose/doses. Use of an alternative medication available from the emergency stock supply. Change in order (time of administration or medication). * * * When a missed dose is unavoidable: Document missed dose on the Medication Administration Record (MAR) or Treatment Administration Record (TAR): Initial and circle to indicate any missed dose. Document explanation for missed dose according to physicians order: e.g. "hold dose" on back of MAR/TAR and indicate "See nurses notes for explanation." Document explanation of missed dose in the Nurses Notes: Describe circumstance of medication shortage. Notification of pharmacy and response. Action(s) taken. Manor Care staff did not completely fulfill the requirements of the quoted procedures. The MAR for Resident 10 complied with the documentation requirement that missed doses be initialed and circled, but made no reference to explanatory nurses' notes. The records indicate that the nurses' notes regarding the missed doses were not made contemporaneously, but were completed later in the morning of August 10, 2004. As noted above, the nursing staff made several attempts to have the pharmacy deliver the fentanyl, but never proceeded to the next step of using a back-up pharmacy or contacting the attending physician because of the attending nurses' observations that Resident 10 was not in pain or discomfort. The federal CMS issues a "State Operations Manual" containing guidelines that are relied upon by surveyors when assessing compliance with regulatory requirements. The State Operations Manual provides, as follows regarding alleged violations of 42 C.F.R. Section 483.60: A drug, whether prescribed on a routine, emergency, or as needed basis, must be provided in a timely manner. If failure to provide a prescribed drug in a timely manner causes the resident discomfort or endangers his or her health and safety, then this requirement is not met. There was no allegation made nor evidence presented that Resident 10's health or safety was endangered by the missed doses of fentanyl. Thus, the issue, as framed by the Guidance to Surveyors documents, is whether Resident 10 experienced "discomfort." The evidence presented at hearing did not establish that Resident 10 experienced pain or more than minimal additional discomfort due to the missed medication. At most, the evidence proved that Resident 10 was upset by the fact that she missed doses of fentanyl. She did not tell anyone that she was in pain and displayed few, if any, outward behavioral indications of pain. Resident 10 went about her normal routine, including sleeping for a time and going outside to smoke cigarettes on the gazebo. Subsequently, in September 2004, Resident 10 was discharged from Manor Care and returned to her own residence. The alleged violation of C.F.R. Section 483.60 was classified by the surveyors as an isolated "Class II" deficiency. Subsection 400.23(8)(b), Florida Statutes (2004), provides, in relevant part: A class II deficiency is a deficiency that the agency determines has compromised the resident's ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency . . . A fine shall be levied notwithstanding the correction of the deficiency. Subsection 400.23(7)(b), Florida Statutes (2004), provides that the presence of one or more Class II deficiencies requires AHCA to assign a conditional licensure status to the facility. Conditional licensure means that a facility "is not in substantial compliance at the time of the survey with criteria established under this part or with rules adopted by the agency." Subsection 400.23(8)(c), Florida Statutes (2004), defines a "Class III" deficiency as follows, in relevant part: A class III deficiency is a deficiency that the agency determines will result in no more than minimal physical, mental, or psychosocial discomfort to the resident or has the potential to compromise the resident's ability to maintain or reach his or her highest practical physical, mental, or psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services. A class III deficiency is subject to a civil penalty of $1,000 for an isolated deficiency . . . A citation for a class III deficiency must specify the time within which the deficiency is required to be corrected. If a class III deficiency is corrected within the time specified, no civil penalty shall be imposed. Under all the facts and circumstances set forth above, it is found that Manor Care did not provide Resident 10 with her prescribed fentanyl during the late night hours of August 10, 2004. It is further found that though Manor Care's nursing staff made repeated efforts to obtain the fentanyl through its contracted pharmacy and received repeated assurances that the medication was "on its way," Manor Care's nursing staff did not follow all of the procedures set forth in the pharmacy's policy and procedure manual to secure the medication on an urgent basis. However, the evidence did not establish that Resident 10's "ability to maintain or reach . . . her highest practicable physical, mental, and psychosocial well-being" was compromised by the missed doses of fentanyl. At most, Resident 10 suffered "minimal physical, mental, or psychosocial discomfort," and the alleged violation should have been classified as an isolated Class III deficiency.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that AHCA enter a final order dismissing the Administrative Complaint. DONE AND ENTERED this 26th day of August, 2005, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 2005.
