The Issue As stated in the Prehearing Stipulation filed by the parties, the "issue to be litigated is whether Petitioner is entitled to a Superior or Standard rating on its license for the period September 1, 1986 through August 31, 1987"?
Findings Of Fact The Petitioner, The Magnolias Nursing and Convalescent Center, is a 210-bed nursing home located in a four-story building in Pensacola, Florida. It is licensed as a nursing home by the State of Florida pursuant to Chapter 400, Florida Statutes. Howard Bennett and his wife have been the owners of the Petitioner since it was built in 1978. On April 28-30, 1986, and May 1-2, 1986, the Department conducted an annual Licensure and Certification survey (hereinafter referred to as the "Annual Survey") of the Petitioner's nursing home as required by Section 400.23, Florida Statutes. Based upon the Annual Survey conducted by the Department, the Department determined that the Petitioner's facility failed to meet nursing home licensure requirement numbers (NH) 100 and 102, as identified on the Department's Nursing Home Licensure Survey Report, DHRS exhibit 2. The deficiencies found by the Department and which in fact existed during the Annual Survey relating to NH 100 and 102 were as follows: The charge nurse for each shift on each of the four floors of the facility is responsible, under direction from Director of Nursing, for the total nursing activities in the facility during each tour of duty. The charge nurses are thus responsible for ensuring that nursing personnel carry out the direct nursing care needs of specific patients and assist in carrying out these nursing care needs. This responsibility is not always met in that: On the day of the survey, there were urine odors noted on the halls, rooms of fourth and third floors, indicating lack of attention by nursing. Other instances of lack of personal attention by nursing on the above mentioned floor in that: One patient required oral hygiene. Fourteen residents required fingernail care, one resident's fingernails were long, thick, and black indicating a need for attention. Two residents had redden buttocks, three residents were wet, three residents needed shaving, three residents needed hair cuts. One resident needed colostomy bag changed. One resident had a small amount of feces on backside, and was not properly cleaned around the rectum and scrotum. Several residents had on clothing that was too tight, zippers open, buttons not fasten, soil wrinkled and threads hanging around the bottom. It is also noted, that there are 116 total care, and 17 self care residents in the facility indicating a need for constant intensive nursing care to the residents. Ref. 10D-29.108(3)(d)(1) Based upon the totality of these deficiencies, it was concluded that the Petitioner failed to comply with the standard of care to be provided by the charge nurse. The deficiencies cited by the Department during the Annual Survey were classified as Class III deficiencies. The Annual Survey was conducted by Christine Denson. Ms. Denson had conducted nine to ten annual surveys of the Petitioner prior to the survey which is the subject of this proceeding. During Ms. Denson's inspection of the Petitioner's nursing home, Ms. Denson pointed out the deficiencies which are noted above to the director of nursing who accompanied Ms. Denson during her inspection. Ms. Denson normally records in some manner the identity of a resident to whom a deficiency relates; by noting the room number or bed number. Ms. Denson did not follow this procedure during the Annual Survey. Ms. Denson met with Howard Bennett, the owner of the Petitioner, at the conclusion of the Annual Survey. After Ms. Denson had explained the deficiencies she had found during her inspection, Judge Bennett stated to Ms. Denson: "I know the place is going down hill. We are letting it slide. Judge Bennett did not ask Ms. Denson for any information concerning the identity of the residents to which deficiencies related. The Petitioner had policies in effect at the time of the Annual Survey which addressed each of the deficiencies cited by the Department. Those policies were not, however, followed. Ms. Denson did not know when the residents to which the deficiencies she found related had been admitted to the Petitioner, their medical condition, how long the fingernail problems had existed or how long the residents had resided at the Petitioner. Ms. Denson did not speak to the residents about the problems she noted, review their medical or dental records or talk to any residents' physician. Finally, Ms. Denson did not remember whether any of the residents were continent or incontinent. On August 13, 1986, a letter was issued by the Department informing the Petitioner that its license rating was being converted from a superior rating to a standard rating. The August 13, 1986, letter from the Department also indicated that the deficiencies noted in the Annual Survey had been corrected based upon a July 31, 1986, follow-up inspection conducted by the Department. The Petitioner requested an administrative hearing challenging the proposed rating of its license by letter dated September 24, 1986.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be issued assigning a standard rating on the Petitioner's license for the period September 1, 1986, through August 31, 1987. DONE and ENTERED this 19th day of October, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of October, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4182 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Accentance or Reason for Rejection 1-3, 6-7, 81 These are matters included in the Prehearing Stipulation. They are hereby accepted. 4-5 Statement of the issue in this case 8 Not supported by the weight of the evidence. Ms. Denson testified at pages 48-49 of the transcript that whether a nursing home was considered to be out of compliance depended on the totality of the deficiencies and that she considered all of the deficiencies she found at the Petitioner's facility. 9 12. 10-11 10. 12-13 7. 14 Irrelevant. 15-16, 19-20, 22-23, 25, 29-31 10. 17 Hearsay. 18, 28, 33-34, 36-37, 39, 41-43, 45 Hereby accepted. 21, 24, 26-27, 32, 48, 54-66, 71, 73-77 These proposed findings of fact are generally true. They all involve, however, possible explanations for the deficiencies found at the Petitioner's facility. In order for these proposed findings of fact to be relevant it would have to be concluded that the Department had the burden of dispelling any and all possible explanations for the deficiencies. Such a conclusion would not be reasonable in this case. The Department presented testimony that the deficiencies cited existed and that, taken as a whole, they supported a conclusion that the Petitioner was not providing minimum nursing care. This evidence was credible and sufficient to meet the Department's burden of proof and to shift the burden to the Petitioner to provide proof of any explanations for the deficiencies. 35 9. 38, 40, 49-51, 53, 82-83, 86-87 Irrelevant and/or argument. 43-44 1. 46-47, 51, 56, 66-67, 71-71 These proposed findings of fact are true. They are not relevant to this proceeding, however, because they involve situations at the Petitioner's facility which may explain the deficiencies. The Petitioner failed to prove that they actually were the cause of any of the deficiencies. 70, 78-80, 84-85 Conclusions of law. The Respondent's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 2-3. 2 11-12. 3 4 and 6. 4 4. 5-7 Irrelevant, summary of testimony, conclusion of law. 8 9. 9 8. 10 Irrelevant. 11 8. 12 Summary of testimony and facts relating to the weight of Ms. Mayo's testimony. 13-14 Hereby accepted. 15 Argument. 16-17 Conclusions of law. 18 4. 19-20 Conclusions of law, argument and irrelevant. COPIES FURNISHED: Jonathan S. Grout, Esquire Dempsey & Goldsmith, P.A. Post Office Box 10651 Tallahassee, Florida 32302 Michael O. Mathis Staff Attorney Office of Licensure and Certification Department of Health and Rehabilitative Services 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact At all times material hereto, Plantation was a licensed nursing home facility and participated in the Medicaid program. A nursing home that receives a superior rating is entitled to incentives based on the Florida Medicaid Reimbursement Plan. Plantation has met all the requirements for a superior rating that are enumerated in Rule lOD-29.128, Florida _Administrative Code. The only reason Plantation was not granted a superior rating was based on the Medicaid Inspection of Care, Team report. (stipulated facts) From August 21 through August 31, 1984, Plantation underwent a routine inspection by the HRS Medicaid Inspection of Care (IOC) Team. The purpose of the inspection was to review the care and treatment of Medicaid recipient patients in accordance with state and federal standards in order for the facility to receive Medicaid payment for those individuals. During the course of the inspection, several deficiencies were found by IOC Team. The deficiencies were summarized in the Medicaid Inspection of Care Team report, entitled Facility Evaluation Summary, prepared by Ms. Tranger. The report listed the deficiencies as follows: Fifteen skilled and two intermediate out of 46 medical records reviewed failed to have medication revalidated by the attending physician within the proper time frame Four of forty-six records reviewed failed to have available documentation that laboratory tests were completed in accordance with doctors' orders and medication regimen, Fourteen skilled and thirteen intermediate out of 46 medical records reviewed failed to have the Plan of Care reviewed within the proper time frame: Ten medical records were not certified within the proper time frames and fifteen medical records were not current for recertification. As to the first deficiency noted, the problem was not that the physician failed to revalidate medication, but that Ms. Tranger did not think that the physician appropriately dated the revalidation. In almost all of the cases, the problem was that Ms. Tranger did not think that the physician had personally entered the date because the date was written with a different color of ink than the doctor's signature or the handwriting appeared to be different. Ms. Tranger did not know whether the dates were written by someone in the physician's office or someone at the nursing home. It is very difficult for a nursing home to get a physician to sign and date orders properly. Plantation had a procedure for securing the doctor's signature and having records dated. When a record was received that was not properly signed and dated, Plantation returned the record to the doctor with a letter or note telling the doctor what needed to be done. When returned by the doctor to Plantation, the record would bear the later date, which caused some records to be out of' compliance with the required time frames. The return to the doctor of records that were not properly dated may also explain why some of he dates were written in a different color ink than the doctor's signature. In those few cases where the dates on the report were not within the proper time frame, the dates were only a few days off. In one case a 34 day period, from July 7, 1984 to August 10, 1984, elapsed before the medication was revalidated. In another case, there were 33 days between the dates. In both cases the medication should have been revalidated every 30 days. The problem with the revalidation dates was strictly a paperwork problem and not one that affected the care of the patients. As stated before, in the majority of the cases the medication was revalidated within the proper time frame. The problem was simply that it appeared that someone other than the doctor had written down the date. The second deficiency was a finding by the surveyors that 4 of the 46 medical records reviewed failed to have available documentation regarding laboratory tests being completed in accordance with doctors' orders. However, Jean Bosang, Administrator of Plantation, reviewed all of the records cited by the IOC Team as the basis for these deficiencies and could only find two instances in which laboratory tests were not performed. HRS did not present any evidence to establish the two other alleged instances. Dr. Lopez reviewed the medical records of the two residents in question and determined that there was no possibility of harm to the patient as a result of failure to perform these tests. One of the two residents is Dr. Lopez' patient, and he normally sees her every day. He stated that the test, an electrolyte examination, was a routine test, that the patient had had no previous problems, and if any problem had developed, she would have had symptoms which would have been observable to the nurses. The tests performed before and after the test that was missed were normal, and the failure to perform the one test had absolutely no effect on the patient. Dr. Lopez was familiar with the other resident upon whom a test was not performed and had reviewed her records. This resident was to have a fasting blood sugar test performed every third month. Although this test was not performed in April of 1984, it was performed timely in every other instance. All tests were normal, and the failure to perform this test did not have any effect on the resident. Had she been suffering from blood sugar problems, there would have been physical signs observable to the nurses. The fourth deficiency listed in the report was a paperwork problem similar to the first deficiency. Patients in a nursing home are classified by level of care and must be recertified from time to time. Certification does not affect the care of the resident. The recertification must be signed and dated by the physician. Again, there was a problem on the recertification because some of the dates were in a different color ink than the physician's signature. Again, the problem was primarily caused by difficulty in getting proper physician documentation. The deficiency did not affect the care of the residents. Mr. Maryanski, who made the decision not to give Plantation a superior rating, testified that of the four deficiencies cited in the IOC report, he believed that only the third deficiency listed, in and of itself, would have precluded a superior rating. An analysis of that deficiency, however, shows that it also was mainly a paperwork deficiency and had no impact on patient care. The third deficiency listed involved a purported failure to have the plans of care reviewed within the proper time frames. Patient care plans are to be reviewed every 60 days for "skilled" patients, those that need the most supervision, and every 90 days for "intermediate" patients, those that need less supervision. A patient's plan of care is a written plan establishing the manner in which each patient will be treated and setting forth certain goals to be reached. A discharge plan is also established, which is basically what the nursing home personnel believe will be the best outcome for the patient if and when he or she leaves the hospital. The patient plan of care is established at a patient care plan meeting. Patient care plan meetings are held by the various disciplines in the nursing home, such as nursing, dietary, social work and activities, to review resident records and discuss any problems with specific residents. The manner in which the problem is to be corrected is determined and then written down on the patient's plan of care record. The evidence revealed that the basis of the deficiency was not a failure to timely establish or review a plan of care, but a failure to timely write down and properly date the plan of care. During the time in question, care plan meetings were held every Wednesday, and all of the disciplines attended the meetings. However, all disciplines did not write their comments on the patients' records at the meeting; some wrote them later. Usually, when they were added later, the comments were dated on the day they were written, rather than on the day the meetings were held. The evidence presented did not show any case in which all disciplines were late in making notes, but revealed only that specific disciplines were tardy. Since all the disciplines attended one meeting, it is apparent that when the date for any discipline was timely, the later dates of other disciplines merely reflected a documentation or paperwork problem. In late 1984 or early 1985, Plantation changed its system to avoid the problem in the future. There appeared to be problems with some of the discharge plans being untimely. The discharge plan is not utilized in the day-to-day care of the resident. Discharge plans at Plantation were kept in two places, and Ms. Tranger recognized that she may have overlooked some plans if they had been written only on the separate discharge sheet. The four deficiencies cited all involved time frames. There are innumerable time frames that must be met by a nursing home. The great majority of the deficiencies involved a failure to properly document. None of the deficiencies affected the care of the patients. Indeed, Ms. Tranger indicated that the patients were all receiving proper nursing care. The decision to give Plantation a standard rating was made by Mr. Maryanski based solely on the IOC report. He relied upon section 400.23,(3) Florida Statutes, which states: "The department shall base its evaluation on the most recent annual inspection report, taking into consideration findings from other official reports, surveys, interviews, investigations and inspections." There are no regulations or written or oral policies implementing this provision. Mr. Maryanski looked solely at the face of the IOC report and did not do any independent investigation. He never visited the nursing home, and he never talked to the on-site surveyors to determine whether the deficiencies cited by the IOC Team were significant. He never saw the underlying documentation which formed the basis of the report. Mr. Maryanski has no background either in nursing or medicine and had no knowledge of purpose the tests that were allegedly not performed. On October 4, 1984, the HRS Office of Licensure and Certification (OLC) conducted the annual survey of the facility. Mr. Maryanski did not determine whether the deficiencies found by the IOC Team had been corrected at the time of the annual survey. An IOC Team surveyor returned on November 21, 1984, and found that all of the deficiencies cited during the IOC inspection had been corrected. A resurvey of the facility was conducted on December 27, 1984, by OLC. All deficiencies noted in OLC's original inspection had been corrected. All nursing home facilities in Florida are rated by HRS as conditional, standard, or superior. In addition to its financial significance, the rating of a facility is important because it affects the facility's reputation in the community and in the industry. The rating for a facility goes into effect on· the day of the follow-up visit of OLC if all deficiencies have been corrected. Therefore, Plantation would have received a superior rating, effective December 27, 1984, had it not been for the IOC report Mr. Maryanski never tried to determine whether the deficiencies in the IOC report had been corrected subsequent to the report being issued. Under rule lOD-29.128, Florida Administrative Code, there are extensive regulatory and statutory requirements which must be met for a facility to be granted a superior rating. Plantation met all of the enumerated requirements, yet it received only a standard rating. Mr. Maryanski based his determination on the IOC report despite the fact that it was outdated and the deficiencies in that report were corrected by November, 1984, prior to the December, 1984, resurvey by the OLC. There was nothing in the annual survey report of the OLC to preclude a superior rating. This is the first time a facility has been denied a superior rating based upon a report other than the annual report.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Plantation Nursing Home be given a superior rating. DONE AND ENTERED this 3rd day of March, 1986, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1986. COPIES FURNISHED: Jonathan S. Grout, Esquire Post Office Box 1980 Orlando, Florida 32802 Harold Braynon; Esquire District X Legal Counsel, 201 West Broward Boulevard Ft. Lauderdale, Florida 33301 William Page, Jr. Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings On Proposed Findings of Fact Submitted by the Petitioner Accepted in Finding of Fact 1. 2-3. Accepted in Finding of Fact 2. 4. Accepted as set forth in Finding of Fact 21. 5-6. Accepted in Findings of Fact 22-23. 7-9. Accepted in Finding of Fact 24. 10. Rejected as immaterial. 11-12. Accepted in Findings of Fact 24-25. Accepted in Finding of Fact 19. Accepted in Finding of Fact 26. 15-16. Accepted generally in Findings of Fact 20 and 24. 17-19. Accepted generally as set forth in Finding of Fact 26. In Background section. Cumulative. Accepted in Finding of Fact 18. Accepted in Finding of Fact 12. 25-31. Accepted in substance in Findings of Fact 4-7. 32-43. Accepted in substance in Findings of Fact 8-10. 44. Rejected as not supported by the evidence. 45-46. Accepted in Finding of Fact 11. 47. Accepted in Finding of Fact 3. 48-49. Accepted in Finding of Fact 3. 50-57. Accepted in general in Findings of Fact 13-16. 58. Accepted in Finding of Fact 17. Rulings On Proposed Findings of Fact Submitted by the Respondent Accepted in Finding of Fact 1. Accepted generally in Findings of Fact 1, 20, 24. Accepted in Finding of Fact 1. Accepted generally in Finding of Fact 19 and Background. 5-8. Accepted in Finding of Fact 3. Accepted in substance in Finding of Fact 2. Accepted in Finding of Fact 2. Accepted in Finding of Fact 3. Accepted in Finding of Fact 13 except as to time frame for intermediate patients which should be 90 days. Accepted that the documentation showed a gap, but proposed finding rejected in that the evidence did not show that, in fact, the patient was not reviewed with the proper time frame. Accepted, without naming the patients, and explained in Finding of Fact 6.
The Issue Whether, based upon a preponderance of the evidence, the Agency for Health Care Administration (AHCA) lawfully assigned conditional licensure status to Harbour Health Center for the period June 17, 2004, to June 29, 2004; whether, based upon clear and convincing evidence, Harbour Health Center violated 42 Code of Federal Regulations (C.F.R.) Section 483.25, as alleged by AHCA; and, if so, the amount of any fine based upon the determination of the scope and severity of the violation, as required by Subsection 400.23(8), Florida Statutes (2004).
Findings Of Fact Based upon stipulations, deposition, oral and documentary evidence presented at the final hearing, and the entire record of the proceeding, the following relevant findings of fact are made: At all times material hereto, AHCA was 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 the responsibility of evaluating nursing home facilities to determine their degree of compliance with established rules as a basis for making the required licensure assignment. Additionally, AHCA is responsible for conducting federally mandated surveys of those long-term care facilities receiving Medicare and Medicaid funds for compliance with federal statutory and rule requirements. These federal requirements are made applicable to Florida nursing home facilities pursuant to Florida Administrative Code Rule 59A-4.1288, which states that "[n]ursing homes that participate in Title XVIII or XIX must follow certification rules and regulations found in 42 C.F.R. §483, Requirements for Long Term Care Facilities, September 26, 1991, which is incorporated by reference." The facility is a licensed nursing facility located in Port Charlotte, Charlotte County, Florida. 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 is, also, determinative of whether the licensure status of a nursing home is "standard" or "conditional" and the amount of 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, titled "Statement Deficiencies and Plan of Correction" and which is commonly referred to as a "2567" form. 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, sets forth specific factual allegations that they believe support the violation, and indicates the federal scope and severity of the noncompliance. To assist in identifying and interpreting deficient practices, surveyors use Guides for Information Analysis Deficiency Determination/Categorization Maps and Matrices. On, or about, June 14 through 17, 2004, AHCA conducted an annual recertification survey of the facility. As to federal compliance requirements, AHCA alleged, as a result of this survey, that the facility was not in compliance with 42 C.F.R. Section 483.25 (Tag F309) for failing to provide necessary care and services for three of 21 sampled residents to attain or maintain their respective highest practicable physical, mental, and psychosocial well-being. As to the state requirements of Subsections 400.23(7) and (8), Florida Statutes (2004), and by operation of Florida Administrative Code Rule 59A-4.1288, AHCA determined that the facility had failed to comply with state requirements and, under the Florida classification system, classified the Federal Tag F309 non-compliance as a state Class II deficiency. Should the facility be found to have committed any of the alleged deficient practices, the period of the conditional licensure status would extend from June 17, 2004, to June 29, 2004. Resident 8 Resident 8's attending physician ordered a protective device to protect the uninjured left ankle and lower leg from injury caused by abrasive contact with the casted right ankle and leg. Resident 8 repeatedly kicked off the protective device, leaving her uninjured ankle and leg exposed. A 2.5 cm abrasion was noted on the unprotected ankle. The surveyors noted finding the protective device in Resident 8's bed but removed from her ankle and leg. Resident 8 was an active patient and had unsupervised visits with her husband who resided in the same facility but who did not suffer from dementia. No direct evidence was received on the cause of the abrasion noted on Resident 8's ankle. Given Resident 8's demonstrated propensity to kick off the protective device, the facility should have utilized a method of affixing the protective device, which would have defeated Resident 8's inclination to remove it. The facility's failure to ensure that Resident 8 could not remove a protective device hardly rises to the level of a failure to maintain a standard of care which compromises the resident's ability to maintain or reach her highest practicable physical, mental or psychosocial well-being. The failure to ensure that the protective device could not be removed would result in no more than minimal discomfort. Resident 10 Resident 10 has terminal diagnoses which include end- stage coronary artery disease and progressive dementia and receives hospice services from a local Hospice and its staff. In the Hospice nurse's notes for Resident 10, on her weekly visit, on May 17, 2004, was the observation that the right eye has drainage consistent with a cold. On May 26, 2004, the same Hospice nurse saw Resident 10 and noted that the cold was gone. No eye drainage was noted. No eye drainage was noted between that date and June 2, 2004. On June 3, 2004, eye drainage was noted and, on June 4, 2004, a culture of the drainage was ordered. On June 7, 2004, the lab report was received and showed that Resident 10 had a bacterial eye infection with Methicillin Resistant Staphylococcus Aureus (MRSA) bacteria. On June 8, 2004, the attending physician, Dr. Brinson, referred the matter to a physician specializing in infectious disease, and Resident 10 was placed in contact isolation. The infectious disease specialist to whom Resident 10 was initially referred was not available, and, as a result, no treatment was undertaken until a second specialist prescribed Bactrim on June 14, 2004. From June 8, 2004, until June 14, 2004, Resident 10 did not demonstrate any outward manifestations of the diagnosed eye infection. A June 9, 2004, quarterly pain assessment failed to note any discomfort, eye drainage or discoloration. In addition to noting that neither infectious control specialist had seen Resident 10, the nurses notes for this period note an absence of symptoms of eye infection. Colonized MRSA is not uncommon in nursing homes. A significant percentage of nursing home employees test positive for MRSA. The lab results for Resident 10 noted "NO WBC'S SEEN," indicating that the infection was colonized or inactive. By placing Resident 10 in contact isolation on June 8, 2004, risk of the spread of the infection was reduced, in fact, no other reports of eye infection were noted during the relevant period. According to Dr. Brinson, Resident 10's attending physician, not treating Resident 10 for MRSA would have been appropriate. The infectious disease specialist, however, treated her with a bacterial static antibiotic. That is, an antibiotic which inhibits further growth, not a bactericide, which actively destroys bacteria. Had this been an active infectious process, a more aggressive treatment regimen would have been appropriate. Ann Sarantos, who testified as an expert witness in nursing, opined that there was a lack of communication and treatment coordination between the facility and Hospice and that the delay in treatment of Resident 10's MRSA presented an unacceptable risk to Resident 10 and the entire resident population. Hospice's Lynn Ann Lima, a registered nurse, testified with specificity as to the level of communication and treatment coordination between the facility and Hospice. She indicated a high level of communication and treatment coordination. Dr. Brinson, who, in addition to being Resident 10's attending physician, was the facility's medical director, opined that Resident 10 was treated appropriately. He pointed out that Resident 10 was a terminally-ill patient, not in acute pain or distress, and that no harm was done to her. The testimony of Hospice Nurse Lima and Dr. Brinson is more credible. Resident 16 Resident 16 was readmitted from the hospital to the facility on May 24, 2004, with a terminal diagnosis of chronic obstructive pulmonary disease and was receiving Hospice care. Roxanol, a morphine pain medication, had been prescribed for Resident 16 for pain on a pro re nata (p.r.n.), or as necessary, basis, based on the judgment of the registered nurse or attending physician. Roxanol was given to Resident 16 in May and on June 1 and 2, 2004. The observations of the surveyor took place on June 17, 2004. On June 17, 2004, at 9:30 a.m., Resident 16 underwent wound care treatment which required the removal of her sweater, transfer from sitting upright in a chair to the bed, and being placed on the left side for treatment. During the transfer and sweater removal, Resident 16 made noises which were variously described as "oohs and aahs" or "ows," depending on the particular witness. The noises were described as typical noises for Resident 16 or evidences of pain, depending on the observer. Nursing staff familiar with Resident 16 described that she would demonstrate pain by fidgeting with a blanket or stuffed animal, or that a tear would come to her eye, and that she would not necessarily have cried out. According to facility employees, Resident 16 did not demonstrate any of her typical behaviors indicating pain on this occasion, and she had never required pain medication for the wound cleansing procedure before. An order for pain medication available "p.r.n.," requires a formalized pain assessment by a registered nurse prior to administration. While pain assessments had been done on previous occasions, no formal pain assessment was done during the wound cleansing procedure. A pain assessment was to be performed in the late afternoon of the same day; however, Resident 16 was sleeping comfortably. The testimony on whether or not inquiry was made during the wound cleansing treatment as to whether Resident 16 was "in pain," "okay," or "comfortable," differs. Resident 16 did not receive any pain medication of any sort during the period of time she was observed by the surveyor. AHCA determined that Resident 16 had not received the requisite pain management, and, as a result, Resident 16’s pain went untreated, resulting in harm characterized as a State Class II deficiency. AHCA's determination is not supported by a preponderance of the evidence. In the context that the surveyor considered what she interpreted as Resident 16's apparent pain, deference should have been given to the caregivers who regularly administered to Resident 16 and were familiar with her observable indications of pain. Their interpretation of Resident 16's conduct and their explanation for not undertaking a formal pain assessment are logical and are credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding: The facility's failure to secure the protective device to Resident 8's lower leg is not a Class II deficiency, but a Class III deficiency. The facility's care and treatment of Residents 10 and 16 did not fall below the requisite standard. The imposition of a conditional license for the period of June 17 to June 29, 2004, is unwarranted. The facility should have its standard licensure status restored for this period. No administrative fine should be levied. DONE AND ENTERED this 3rd day of June, 2005, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 2005. COPIES FURNISHED: Karen L. Goldsmith, Esquire Goldsmith, Grout & Lewis, P.A. 2180 North Park Avenue, Suite 100 Post Office Box 2011 Winter Park, Florida 32790-2011 Eric Bredemeyer, Esquire Agency for Health Care Administration 2295 Victoria Avenue, Room 346C Fort Myers, Florida 33901 Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the stipulation of facts "entered into by all parties, the following relevant facts are found: Along with six other applicants, the petitioner, Health Quest Corporation, d/b/a Lake Pointe Woods Health Center, and the respondent, Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center, submitted applications for a Certificate of Need to construct and operate new nursing homes in Sarasota County, In June of 1982, the respondent Department of Health and Rehabilitative Services (HRS) determined to issue the application of Sarasota Health Care Center and deny the remaining seven applications. For the purposes of this proceeding, the parties have stipulated that there is a need for at least a 120-bed skilled and intermediate care nursing home in the Sarasota, Florida area. In November, 1982, respondent HRS adopted Rule 10- 5.11(21) , Florida Administrative Code, which provides a formula methodology for determining the number of nursing home beds needed in areas throughout the State. Briefly summarizing, this formula begins with a bed to population ratio of 27 per thousand population age 65 and over, and then modifies that ratio by applying a poverty ratio calculated for each district. The theoretical bed need ratio established for Sarasota County by this portion of the Rule's formula is 23.2 nursing home beds per thousand elderly population projected three years into the future. The population figures to be utilized in the formula are the latest mid-range projections published by the Bureau of Economic and Business Research (BEBR) at the University of Florida. After determining the theoretical need for nursing home beds in an area, the Rule purports to determine the actual demand for beds by determining the current utilization of licensed community nursing home beds, establishing a current utilization threshold and, if this is satisfied, applying a prospective utilization test too determine the number of beds at any given time. Applying the formula methodology set forth in Rule 10- 5.11(21) to Sarasota County results in a finding that there are currently 807 excess nursing home beds in that County. The need for sheltered nursing home beds within a life care facility are considered separately in Rule 10-5.11(22), Florida Administrative Code. Generally speaking, need is determined on the basis of one nursing home bed for every four residential units in the life care facility. Elderly persons 75 years of age and older utilize nursing homes to a greater extent than those persons between the ages of 65 and 74. Persons under the age of 65, particularly handicapped individuals, also utilize nursing home beds. The formula set forth in Rule 10-5.11(21) does not consider those individuals under the age of 65, and it does not provide a weighted factor for the age 75 and over population. In the past, the BEBR mid-range population projections for Sarasota County, compared with the actual census reached, have been low. Petitioner Health Quest, an Indiana corporation, currently owns and/or operates some 2,400 existing nursing home beds in approximately 13 facilities in Indiana. It holds several Certificates of Need for nursing homes in Florida and construction is under way. Petitioner owns 53 acres of land on the South Tamiami Trail in Sarasota, upon which it is constructing a 474-unit retirement center. It seeks to construct on six of the 53 acres a 120-bed nursing home adjacent to the retirement center. Of the 120 beds, it is proposed that 60 will be for intermediate care and 60 will be for skilled care. The facility will offer ancillary services in the areas of speech, hearing, physical, occupational, and recreational therapy. Thirty-five intermediate care beds would be classified as beds to be used for Medicaid recipients and the facility would be Medicare certified. Retirement center residents will have priority over nursing home beds. The total capital expenditure for the petitioner's proposed nursing home project was estimated in its application to be $3.1 million, with a cost per square foot of $46.29 and a cost per bed of approximately $26,000,00. As of the date of the hearing, the estimated capital expenditure for the petitioner's project as $3.9 million. The respondent Quality Health Facilities, Inc., d/b/a Sarasota Health Care Center (QHF), is a Mississippi corporation and owns nursing homes in Tennessee, North Carolina and Haines City, Florida, the latter site having been opened in August of 1983. It also holds three other outstanding Certificates of Need. QHF proposes to construct a 120-bed nursing home containing intermediate and skilled care beds which will be equally available to all members of the community. It is anticipated that it will have approximately 65 percent Medicaid usage and 5 percent Medicare usage. Though it has not yet selected its site, QHF plans to utilize a four-acre site near the City of Venice in Sarasota County. At the time of the application, the total capital expenditure for QHF's proposed project was estimated to be $2.3 million. Its construction costs were estimated at $1.16 million or $33.14 per square foot. QHF's recently constructed Haines City nursing home facility was completed at a construction cost of $1.22 million, or $31.00, per square foot. The Sarasota County facility will utilize the same basic design as the Haines City facility. At the current time, the cost of construction would be increased by an inflation factor of about ten percent. As of the date of the hearing, the projected capital expenditure for QHF's Sarasota County proposed facility was approximately $2.6 million or about $21,000.00 per bed. The owners of QHF are willing and able to supply the necessary working capital to make the proposed nursing home a viable operation. As depicted by the projected interest and depreciation expenses, the QHF facility will have lower operating expenses than the facility proposed by petitioner, Health Quest. In Sarasota County, there is a direct correlation between high Medicaid utilization and high facility occupancy. The long term financial feasibility of a 120-bed nursing home in Sarasota County is undisputed, as is the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services in the health service area.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the application of Health Quest Corporation d/b/a Lake Pointe Woods Health Care, Inc. for a Certificate of Need to construct a 120-bed nursing home in Sarasota County be DENIED. It is further RECOMMENDED that the application of Quality Health Facilities Inc. d/b/a Sarasota Health Care Center for a Certificate of Need to construct a 120-bed nursing home facility in Sarasota County be GRANTED. Respectfully submitted and entered this 31st Day of October, 1983, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1983. COPIES FURNISHED: John M. Laird, Esquire 315 West Jefferson Blvd. South Bend, Indiana 46601 John T. C. Low, Esquire Paul L. Gunn, Esquire Low & McMullan 1530 Capital Towers Post Office Box 22966 Jackson, Mississippi 39205 James M. Barclay, Esquire Assistant General Counsel 1317 Winewood Blvd. Suite 256 Tallahassee, Florida 32301 David Pingree, Secretary Department of Health & Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
The Issue Whether Petitioners' applications for Certificates of Need should be approved?
Findings Of Fact Ocala Ocala is a general partnership composed of three partners: Ocala Health Care Associates, Inc., Casterfield, Ltd., and Big Sun Healthcare Systems, the lessee and operator of Munroe Regional Medical Center. Ocala is the current holder of an approved CON for 35 community beds in Marion County. If the 21-bed transfer of sheltered beds to community beds is approved, Ocala intends to operate a 56-bed facility. A 56-bed facility is more viable than a 35-bed facility. At the time of the hearing, there were 642 approved and licensed beds and 215 approved not yet licensed beds in Marion County. The 215 beds include Ocala's 35-bed CON. A patient needing subacute care is one who has been released from acute care status by a physician and is ready to be released from a hospital (acute care) to a less costly facility, e.g. a skilled nursing home. Subacute care patients are those needing, e.g., intravenous tubes, respirators, IV medication, decubitus ulcer care, tracheotomy tubes, or antibiotic therapy. Patients needing subacute care should be placed in a nursing home, since this is less costly than hospital care and it allows for acute care beds in a hospital to be used for patients needing acute care. Skilled nursing homes are authorized to provide subacute care, but are not required to do so. In order to provide subacute care, a nursing home may need additional staff and equipment. There is a problem in Marion County with the placement of subacute care patients in nursing homes. This problem is caused by a variety of factors and usually results in a patient remaining in a hospital longer than is necessary. One factor is that some of the existing nursing homes will not accept patients needing certain types of subacute care, e.g., patients needing ventilators or feeding tubes. Another equally important factor is that the nursing homes want to make sure they will get paid and there is usually some delay in determining how the nursing home will be compensated. Other factors include the patients inability to pay and, on occasion, the unavailability of beds. Ocala intends to use its 35-bed approved CON to provide subacute care. Country Club While the application shows the applicant's name as "Country Club Retirement Center," that is the name of the project. The applicant is Mr. J. E. Holland. Mr. Holland's application is for a 60-bed nursing home which will be part of a 250-apartment continuing care community. The facility is to be located in Clermont, in Lake County. Lake County is in Planning Area VII of HRS District III. Planning Area VII also includes Sumter County. Mr. Keach, the only witness presented by Country Club, is Vice President of National Health Care. National Health Care operates a nursing home in Gainesville, Florida. In addition to operating the nursing home, National Health Care assists persons seeking a CON with preparation of the CON application. Mr. Keach and other National Health Care employees assisted Mr. Holland with the preparation of the CON application submitted in this case. National Health Care will not own or operate Mr. Holland's facility. Mr. Keach is of the opinion that there is need in Clermont for a 60- bed nursing home. He bases his opinion on letters of support for the construction of the facility, on petitions signed by persons attending a public hearing, and on four or five visits to the area. Mr. Keach never performed a study which would indicate the number of persons with a "documented need" for nursing home services who have been denied access to a nursing home. At the time HRS issued its State Agency Action Report there were 958 beds approved and licensed in Planning Area VII. Of these, 838 are located in Lake County, with 142 located in a nursing home in Clermont. Also these are swing-beds providing long-term care at a hospital in Clermont. Finally, there were 236 beds approved not yet licensed in Planning Area VII, with 176 to be located in Lake County. The occupancy rate for the nursing home facility located in Clermont is approximately 89 percent. For the six months ending March, 1988, the occupancy rate for Planning Area VII was below 80 percent. There are at least two nursing homes in operation within a 20-mile radius of Clermont. These two nursing homes are located in Winter Garden and one of them has received a CON to add 89 beds. Twenty-Eight Corporation The applicant in this case is Twenty-Eight Corporation. "The owner of the nursing home will be the Levy Nursing Care Center, a limited partnership, which will be owned and secured by Twenty-Eight Corporation." (28 Corporation, Composite Exhibit 1.) Twenty-Eight corporation seeks approval of a CON for 60 nursing home beds to be operated as part of a continuing care project which will include a 50-unit apartment complex. The facility is to be located in Chiefland, Florida, in Levy County. Levy County is in Planning Area II of HRS District III. Planning Area II also includes Alachua, Gilchrist and Dixie counties. At the time HRS issued its State Agency Action Report, there were 1112 licensed nursing home beds in Planning Area II. Of these, 120 are located in Trenton, in Gilchrist County, 180 are located in Williston, in Levy County, and the rest are located in Alachua County. Also, there are 147 beds approved not yet licensed to be located in Alachua County. Chiefland is approximately 12 miles from Trenton. Williston is approximately 27 miles from Trenton. Mr. Keach was the only witness who testified on behalf of Twenty-Eight Corporation. Mr. Keach is vice-president of National Health Care. (See Finding of Fact 17, supra.) Mr. Keach is of the opinion that there is need in the Chiefland area for a 60-bed nursing home. His opinion is based on letters of support and petitions of support he received for the project. Also, his opinion is based on the fact that there is no nursing home located in Chiefland and the nearest nursing home is located in Trenton, 12 miles away. The 1986 District III Health Plan shows the Trenton facility having an occupancy rate of 99.93 percent. Mr. Keach never performed a study which would indicate the number of persons with a "documented need" for nursing home services who have been denied access to a nursing home.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that HRS enter a Final Order denying Petitioners' applications in these three cases. DONE and ENTERED this 3rd day of March, 1989, in Tallahassee, Leon County, Florida. JOSE A. DIEZ-ARGUELLES Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 88-1862, 88-1863, 88-1864 Rulings on Proposed Findings of Fact Ocala's Proposed Findings of Fact: 1. Accepted. 2-4. Supported by competent, substantial evidence but unnecessary to the decision reached. 5-7. Accepted. Irrelevant. Accepted. Rejected as not supported by the weight of the evidence. There is not an absolute absence of facilities willing to accept all patients needing subacute care. Irrelevant. "Serious concerns" are not what is needed under the Rule. First sentence rejected as recitation of testimony. Second sentence irrelevant; issue is whether nursing homes will accept patients, not whether nursing homes will enter into agreement with MRMC. 13-16. True, but irrelevant. Accepted. (a) Rejected to the extent it implies that the approved facilities would not provide subacute care. Mr. Bailey's testimony is that the facilities refused to enter into a relationship with MRMC; this does not establish that the facilities would not provide subacute care. Rejected as a recitation of testimony. The weight of the evidence shows that some facilities would accept same subacute patients. True, but it is unclear if these are the physician's notations the HRS witness referred to. True that charts and logs were provided, but they did not establish the number of patients in need of subacute care in excess of licensed or approved beds. 19-26. Irrelevant. 27-29. Accepted-for what they are, but insufficient to establish need. Twenty-Eight Corporation's Proposed Findings of Fact: 1-4 Accepted. Irrelevant. This is a de novo proceeding. True, but irrelevant. Accepted. Accepted. Rejected as hearsay. But see Finding of Fact 31. Mr. Keach testified that Chiefland is 40 miles from Williston. The road map published by the Department of Transportation shows the distance between the two cities at 27 miles. True, but irrelevant. True, but irrelevant. Accepted. Accepted. However, this special consideration should be given only where numeric need has been established in the District. True, but irrelevant. True, but irrelevant. Rejected as hearsay. True, but irrelevant. Rejected as hearsay. Also, a determination by a family member does not establish medical "need". True that this is Mr. Keach's opinion. However, Mr. Keach's opinion is rejected. His opinion of need is not based on what the Rule requires or on what health planners rely on to establish need. Mr. Keach is not able to testify as to the financial feasibility of the facility because he has no first- hand knowledge of the finances. 21-22. Irrelevant. 23. Rejected. See ruling on 10., supra. 24-26. Irrelevant. Rejected as contrary to the weight of the evidence. Irrelevant. Irrelevant; this is not a rule challenge. Irrelevant. True, but irrelevant. Irrelevant. Accepted. Rejected as hearsay. Rejected as not supported by the weight of the evidence. Rejected as argument. Also, unable to determine what the "second portion" is. 37-38. Irrelevant. First phrase accepted. Second phrase rejected to extent implies that only need to show that no other facility exists within 20 miles. Irrelevant. Country Club's Proposed Findings of Fact: 1-4. Accepted. Irrelevant. This is a de novo proceeding. True, but irrelevant. Accepted. Irrelevant. True, but irrelevant. Accepted. Accepted. However, this special consideration should be given only where numeric need has been established in the District. True, but irrelevant. True, but irrelevant. 14-17. Irrelevant. Rejected as contrary to the weight of the evidence. Accepted. Rejected as not supported by competent evidence; hearsay. Accepted. Rejected as not supported by competent evidence; hearsay. Irrelevant. Rejected as not supported by competent evidence; hearsay. True, but irrelevant. See ruling on 11, supra. Irrelevant. Rejected as not supported by competent evidence; hearsay. Irrelevant. The Rule also recognizes this. Irrelevant. Rejected as not supported by the weight of the evidence and irrelevant. True, but irrelevant. True, but irrelevant. 33-34. True, but irrelevant. This is a de novo proceeding. 35-39. Irrelevant. 40. Rejected as argument. Also, unable to determine what the "second portion" is. 41-42. Accepted 43. Rejected as contrary to the weight of the evidence. 44. True, but irrelevant. Also, there are approved beds within 20 miles, but located in a different HRS District. Leesburg's Proposed Findings of Fact 1-7. Accepted. Rejected as not a finding of fact. Accepted. 10-15. See Conclusions of Law section of RO. Accepted. Rejected as argument. Accepted. Rejected. Fact that need does not exist under HRS rule doesn't necessarily mean that that facility will not be financially feasible. In any event, Country Club was not able to establish financial feasibility. 20-21. See Conclusions of Law. 22. Rejected as argument. 23-28. Supported by competent substantial evidence but unnecessary to the decision reached. Accepted. Rejected as a recitation of testimony. Accepted.- HRS's Proposed Findings of Fact 1-19. Accepted. Rejected. The HRS witness did not specifically state that HRS needs to see the actual physician referral. Accepted. See Conclusions of Law. 22-28. Accepted. See Conclusions of Law. 29. Not a finding of fact. 30-37. Accepted. 38. Irrelevant. 39-42. Unnecessary to the decision reached. Irrelevant. Accepted. 45-46. See Conclusions of Law. Accepted. Accepted. Not a finding of fact. 50-65. Accepted. See Conclusions of Law. 66. Not a finding of fact. 67-71. Accepted, but Ocala's Exhibits 6 & 7 are not amendments to the application but simply more of the same information that was provided with the application. COPIES FURNISHED: Gerald B. Sternstein, Esquire Darrell White, Esquire Post Office Box 2174 First Florida Bank Building Suite 600 215 South Monroe Street Tallahassee, Florida 32301 Theodore Mack, Esquire Assistant General Counsel 2727 Mahan Drive Fort Knox Executive Center Tallahassee, Florida 32308 R. Bruce McKibben, Jr., Esquire 307 West Park Avenue Post Office Box 10651 Tallahassee, Florida 32302 Grafton Wilson, II, Esquire 711 NW 23rd Avenue, Suite #4 Gainesville, Florida 32609 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issues are thus whether the acts and omissions charged occurred, whether they constitute violations of Section 400.022(1)(j) and 400.141, Florida Statutes, and related rules, and whether an administrative fine is appropriate pursuant to 400.102(c) and Section 400.121, Florida Statutes. Upon the commencement of the hearing, the petitioner moved to amend paragraph 8 of its Complaint, so that the date "March 4" would read March 14." The motion was granted on the basis that there was only a clerical error involved and paragraph 8 correctly alleges that there-was a nursing staff shortage from February 20 to March 14, 1980. Eight witnesses were called by the Petitioner, and two by the Respondent. Ten exhibits were adduced as evidence. The Respondent has submitted and requested rulings upon ninety-five proposed findings of fact. In that connection, all proposed findings, conclusions, and supporting arguments of the parties have been considered. To the extent that the proposed findings and conclusions submitted by the parties, and the arguments made by them, are in accordance with the findings, conclusions and views stated herein they have been accepted, and to the extent such proposed findings and conclusions of the parties, and such arguments made by the parties, are inconsistent therewith they have been rejected.
Findings Of Fact Manhattan Convalescent Center is a nursing home facility located in Tampa and licensed by the Department of Health and Rehabilitative Services. On January 22, February 20, February 25, March 3, March 6, and March 14, 1980, a number of Department employees representing the Department's medical review team, and the Office of Licensure and Certification, consisting of registered nurses, hospital consultants and Department surveillance team members, made inspections of the Respondent's facility for the purpose of ascertaining whether the premises, equipment and conduct of operations were safe and sanitary for the provision of adequate and appropriate health care consistent with the rules promulgated by the Department and whether minimum nursing service staff standards were being maintained. Thus, on January 22, 1980 a member of the medical review team, witness Maulden, observed a rat run across the floor in one of the wings of the nursing home facility. On February 20, Muriel Holzberger, a registered nurse and surveyor employed by the Petitioner, observed rodent droppings in one of the wings of the facility and on February 20, March 12 and March 14, 1980, numerous roaches were observed by various employees of the Department making inspections throughout the facility. On February 20, 1980 strong urine odors were present on the 200, 300 and 400 wings of the facility as well as in the lobby. The odor was caused by urine puddles under some patients' chairs in the hallway, wet sheets, and a spilled catheter. On February 20 and 25, 1980 the grounds were littered with debris and used equipment, the grass and weeds on the grounds needed cutting and there was a build up of organic material, food spills and wet spots on the floors. The Respondent's witness, Ann Killeen, as well as the Petitioner's hospital consultant, Joel Montgomery, agreed that a general state of disrepair existed at the Respondent's facility, consisting of torn screens, ill fitting exterior doors with inoperative or missing door closers and missing ceiling tile. Interior and exterior walls were in need of repair and repainting. Additionally, eleven bedside cords for the nurse paging system were cut, apparently by patients, and on February 25, 1980, a total of 36 nurse paging stations were inoperative. A substantial number of these cords were cut by a patient (or patients) with scissors without the knowledge of the Respondent and steps to correct the condition were immediately taken. On January 22, 1980 Petitioner's representatives, Mary Maulden and Alicia Alvarez, observed a patient at the Respondent's facility free himself from physical restraints, walk down the hall and leave the facility. A search for nursing staff was made but none were found on the wing. After three to five minutes the Assistant Director of Nurses was located and the patient was apprehended. Nurse Alvarez's testimony revealed that the Respondent's nursing staff was in and out of, and working in that wing all that morning except for that particular point in time when the patient shed his restraints and walked out of the facility. On March 3, 1980 Department employee, William Musgrove, as part of a surveillance team consisting of himself and nurse Muriel Holzberger, observed two patients restrained in the hall of the facility in chairs and Posey vests, which are designed to safely restrain unstable patients. The witness questioned the propriety of this procedure, but could not establish this as a violation of the Respondent's patient care policies required by Rule 10D-29.41, Florida Administrative Code. The witness reviewed the Respondent's written patient care policy required by that Rule and testified that their policy complied with it and that the policy did not forbid restraining a patient to a handrail in the facility as was done in this instance. The witness was unable to testify whether patients were improperly restrained pursuant to medical orders for their own or other patients' protection. A hospital consultant for the Department, Bill Schmitz, and Marsha Winae, a public health nurse for the Department, made a survey of the Respondent's facility on March 12, 1980. On that day the extensive roach infestation was continuing as was the presence of liquids in the hallways. On February 20, 1980 witness Joel Montgomery observed a lawn mower stored in the facility's electrical panel room which is charged as a violation in paragraph 3 of the Administrative Complaint. The lawn mower was not shown to definitely contain gasoline however, nor does it constitute a bulk storage of volatile or flammable liquids. Nurse Holzberger who inspected the Respondent's nursing home on February 20, February 25, March 3 and March 6, 1980, corroborated the previously established roach infestation and the presence of strong urine odors throughout the facility including those emanating from puddles under some patients' chairs, the soaking of chair cushions and mattresses and an excess accumulation of soiled linen. Her testimony also corroborates the existence of 36 instances of inoperative nurse paging devices including the 11 nurse calling cords which had been cut by patients. This witness, who was accepted as an expert in the field of proper nursing care, established that an appropriate level of nursing care for the patients in this facility would dictate the requirement that those who are incontinent be cleaned and their linen changed more frequently and that floors be mopped and otherwise cleaned more frequently. Upon the second visit to the facility by this witness the nurse call system had 9 paging cords missing, 11 cords cut, and 15 of the nurse calling devices would not light up at the nurses' station. This situation is rendered more significant by the fact that more than half of the patients with inoperative nurse paging devices were bedridden. On her last visit of March 6, 1980 the problem of urine puddles standing on the floors, urine stains on bed linen, and resultant odor was the same or slightly worse than on the two previous visits. An effective housekeeping and patient care policy or practice would dictate relieving such incontinent patients every two hours and more frequent laundering of linen, as well as bowel and bladder training. On March 6, 1980 controlled drugs were resting on counters in all of the facility's four drug rooms instead of being stored in a locked compartment, although two of the drug rooms themselves were locked. The other two were unlocked, but with the Respondent's nurses present. Ms. Holzberger participated in the inspections of March 3 and March 6, 1980. On March 3, 1980 there were no more than 14 sheets available for changes on the 4:00 p.m. to midnight nursing shift. On March 6, 1980 there were only 68 absorbent underpads and 74 sheets available for changes for approximately 65 incontinent patients. The unrefuted expert testimony of Nurse Holzberger established that there should be available four sheets for each incontinent patient per shift. Thus, on these two dates there was an inadequate supply of bed linen to provide changes for the incontinent patients in the facility. On March 6, 1980 Nurse Holzberger and Nurse Carol King observed 12 patients who were lying on sheets previously wet with urine, unchanged, dried and rewet again. This condition is not compatible with generally recognized adequate and appropriate nursing care standards. Incontinent patients should be examined every two hours and a change of sheets made if indicated. If such patients remain on wet sheets for a longer period of time their health may be adversely affected. On March 6, 1980 these same employees of the Petitioner inspected a medical supply room and found no disposable gloves, no adhesive tape, no razor blades and one package of telfa pads. There was no testimony to establish what the medical supply requirements of this facility are based upon the types of patients it cares for and the types and amounts of medical supplies thus needed. The testimony of Robert Cole, the facility's employee, who was at that time in charge of dispensing medical supplies, establishes that in the medical supply room (as opposed to the nurses' stations on the wings) there were at least six rolls of tape per station, 50 razors, four boxes or 80 rolls, 300 telfa pads and 200 sterile gloves. Nurses Holzberger and King made an evaluation of the Respondent's nurse staffing patterns. Ms. Holzberger only noted a shortage of nursing staff on February 24, 1980. Her calculations, however, were based on an average census of skilled patients in the Respondent's facility over the period February 20 to March 4, 1980 and she did not know the actual number of skilled patients upon which the required number of nursing staff present must be calculated on that particular day, February 24, 1980. Further, her calculations were based upon the nurses' "sign in sheet" and did not include the Director of Nurses who does not sign in when she reports for work. Therefore, it was established that on February 24 there would be one more registered nurse present than her figures reflect, i.e., the Director of Nurses. Nurse King, in describing alleged nursing staff shortages in the week of March 7 to March 13, 1980, was similarly unable to testify to the number of skilled patients present on each of those days which must be used as the basis for calculating required nursing staff. She rather used a similar average patient census for her calculations and testimony. Thus, neither witness for the Petitioner testifying regarding nursing staff shortages knew the actual number of patients present in the facility on the days nursing staff shortages were alleged. In response to the problem of the roach infestation, the Respondent's Administrator changed pest control companies on March 26, 1980. The previous pest control service was ineffective. It was also the practice of the Respondent, at that time, to fog one wing of the facility per week with pesticide in an attempt to control the roaches. Further, vacant lots on all sides, owned and controlled by others, were overgrown with weeds and debris, to which the witness ascribed the large roach population. The problem of urine odors in the facility was attributed to the exhaust fans for ventilating the facility which were inoperable in February, 1980. She had them repaired and, by the beginning of April, 1980 (after the subject inspections), had removed the urine odor problem. The witness took other stops to correct deficiencies by firing the previous Director of Nurses on March 14, 1980, and employing a new person in charge of linen supply and purchasing. A new supply of linen was purchased in February or March, 1980. The Respondent maintains written policies concerning patient care, including a provision for protection of patients from abuse or neglect. The Respondent's Administrator admitted existence of the torn screens, broken door locks, missing ceiling tiles and the roach infestation. She also admitted the fact of the cut and otherwise inoperable nurse paging cords in the patients' rooms, but indicated that these deficiencies had been repaired. The various structural repairs required have been accomplished. All correction efforts began after the inspections by the Petitioner's staff members, however.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the candor and demeanor of the witnesses, and the evidence in the record, it is RECOMMENDED that for the violations charged in Counts I, II, IV, VI, IX and X of the Administrative Complaint and found herein to be proven, the Respondent should be fined a total of $1,600.00. Counts III, V, VII and VIII of the Administrative Complaint should be dismissed. DONE AND ENTERED this 31st day of March, 1981 in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1981. (904) 488-9675 COPIES FURNISHED: AMELIA PARK, ESQUIRE JANICE SORTER, ESQUIRE W. T. EDWARDS FACILITY 4000 WEST BUFFALO AVENUE, 4TH FLOOR TAMPA, FLORIDA 33614 KENNETH E. APGAR, ESQUIRE EDWARD P. DE LA PARTE, JR., ESQUIRE 403 NORTH MORGAN STREET, SUITE 102 TAMPA, FLORIDA 33602
Findings Of Fact Petitioner, Florida Convalescent Centers, Inc. (FCC), filed an application with respondent, Department of Health and Rehabilitative Services (HRS), on October 14, 1983, seeking a certificate of need authorizing the construction of a 120-bed skilled and intermediate care nursing home facility in Manatee County, Florida. /1 The proposed project carries an estimated cost of $3,530,000. After reviewing the application, HRS issued its proposed agency action on February 21, 1984, in the form of a state agency action report in which it advised petitioner that it intended to deny the application. The report stated in part that "(e)xisting and approved bed capacity in Manatee County... is sufficient to satisfy projected need for 1986," that 240 nursing home beds had just been approved for the county, and when added to the existing nursing home supply, would "maintain a reasonable subdistrict occupancy level through 1986 and satisfy the need for additional beds in Manatee County." The service area in which FCC proposes to construct its new facility is the Manatee County subdistrict of HRS District 6. That district contains five counties, including Manatee. In order to determine need, HRS has adopted Rule 10-5.11(21), Florida Administrative Code, which contains a formula (or methodology) for determining need at both the district and subdistrict level. Under that formula, HRS is required to utilize the "most recent 6 month nursing home utilization in the subdistrict." In this regard, HRS prepares on an on- going basis an internal document entitled "Quarterly Report" which contains the latest available data over a six-month period. In this proceeding, HRS used a report containing data for the period October, 1983, through March, 1984. This was the most current and complete available data at the time of hearing. According to the methodology in Rule 10-5.11(21), there is a gross need in District 6 for 7,336 nursing home beds. At the same time, there are presently 4,910 licensed and 960 approved beds in the District. Therefore, this results in a district-wide shortage of 1,466 nursing home beds through the year 1987, which is the three year planning horizon used by HRS in determining need. Evidenced introduced by HRS indicated there are presently 765 licensed and 240 approved beds in Manatee County. Under the rule, the methodology reflects a need for 1,518 beds, or a subdistrict deficiency of 513 beds through the year 1987. But even if beds are mathematically required under the formula at the subdistrict level, the rule requires that the current utilization of existing facilities be at least 85 percent, and the prospective utilization rate exceed 80 percent. If they do not, no additional beds may be authorized. The current utilization rate in Manatee County is 91.7 percent which meets the 85 percent threshold. However, the prospective utilization rate for the existing and approved operating nursing homes within the county is 69.8 percent, or substantially less than the minimum threshold of 80 percent called for by the rule. If petitioner's proposed beds are added to the calculation, the prospective utilization rate drops to 62.9 percent, or far below the requisite minimum rate. Therefore, there is no need for additional beds in Manatee County. FCC points out that special circumstances are present which justify a deviation from the rule. These include the allocation under the rule of only 15 percent of the district beds to Manatee County even though 21 percent of the elderly population (over 65 years) resides within the county, and the fact that Manatee has the highest percentage of people over 75 years of age of any county within the district. FCC also contends that the county has more persons in poverty than the statewide average, and that it will dedicate some 50 percent of its beds to Medicaid patients if the application is approved. However, these factors are taken into account in the formula devised by HRS, and do not constitute special circumstances that would warrant a departure from the need calculation encompassed in the rule.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Florida Convalescent Centers, Inc., for a certificate of need to construct a 120-bed skilled and intermediate care nursing home facility in Manatee County, Florida be DENIED. DONE and ORDERED this 31st day of October, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1984.
The Issue The ultimate issue is whether proposed Rules 10-5.002, 10-5.0025, 10-5.003, 10-5.004, 10-5.005, 10-5.008, 10-5.0085, 10-5.010, 10-5.0105, 10-5.020, and 10- 5.024, published in Volume 16, Number 13, Florida Administrative Weekly, are invalid exercises of delegated legislative authority.
Findings Of Fact 10-5.002(1) Proposed Rule 10-5.002(1) defines the term "acquisition" to mean "the act of possessing or controlling, in any manner or by any means, a health care facility, major medical equipment, an institutional health service or medical office building as one's own." The proposed rule is HRS's attempt to clarify the term's meaning as used in Section 381.706, Florida Statutes. It is based on dictionary definitions, primarily, Webster's Dictionary, Ninth Edition, but also Black's Law Dictionary. Armond Balsano, an expert in health planning, did not believe the definition to be reasonable and thought it was unclear, ambiguous, and open ended. However his opinion in this regard was not persuasive. Proposed Rule 10-5.002(1) is reasonable and sufficiently clear to withstand this challenge. 10-5.002(13) and 10-5.008(2)(d)--Skilled Nursing Issues Proposed Rule 10-5.002(13) defines "community nursing home beds" as relevant to this proceeding to include "acute care beds licensed pursuant to Chapter 395, Part I, F.S., but designated as skilled nursing beds, which are reviewable pursuant to Rule 10-5.011(1)(k) [the nursing home bed need methodology]." Proposed Rule 10-5.008(2)(d) relates to fixed need pools and states: (d) Skilled Nursing Units in Hospitals. Beds in skilled nursing units which are a distinct part of a hospital will be counted in the nursing home bed inventory, even though they retain their licensure as acute care beds. Essentially, proposed Rule 10-5.008(2)(d) requires that skilled nursing beds in a distinct unit in a hospital be categorized as hospital "general" beds on the hospital license, but that they be carried at the same time on the inventory of community nursing home beds for purposes of projecting need under "pool" projections utilized by HRS for evaluating need for new beds. Proposed Rule 10-5.008(2)(d) attempts to codify what has been HRS's policy. This rule proposes that licensed acute care beds, which form a distinct part of a hospital-based skilled nursing unit, be counted in the nursing home bed inventory to project future need with respect to the nursing home bed need formula. Thus, these beds will no longer be counted or used in the acute care bed need formula to project the acute care bed need. From a health planning standpoint, several reasons exist for and against the inclusion of these hospital-based skilled nursing units within the nursing home bed inventory. A hospital cannot use its acute care beds as skilled nursing beds without a certificate of need. However, pursuant to this rule, to obtain these distinct unit beds a hospital is forced to compete with nursing home applicants for those beds. Skilled nursing beds in hospitals are "general" beds set up in a special category for which there is no specialty hospital bed methodology. Applications are reviewed under the nursing home bed methodology. A skilled nursing unit in a hospital is a unit, certified under the Health Care Finance Administration program, to identify a distinct part of the hospital as being a service in which there is 24-hour nursing with an RN nurse on the day shift. There also must be skilled nursing multi-disciplinary treatments and therapy services provided. The Health Care Finance Administration categorizes such beds as hospital beds, a distinct part of a hospital. Skilled nursing facility (SNF) beds in a hospital are used to treat acutely ill patients with an average length of stay of 20 days, who are different from the extended care patients found in community nursing homes, who have lengths of stay of one year or longer. Hospital skilled nursing patients are overwhelmingly Medicare patients, whereas community nursing home patients are overwhelmingly Medicaid patients. In Florida, Medicaid does not reimburse for care provided in the hospital-based skilled nursing unit. Hospital-based skilled nursing units are reimbursed by the Health Care Financing Administration (HCFA) on a cost-based method. This system of reimbursement is also used with respect to non-hospital-based skilled nursing facilities. Furthermore, this means that hospital-based units are no longer reimbursed under the DRG (Diagnosis Related Groups) system. Medicare limits the patient benefit period to 100 days, regardless of the patient setting. Except for hospitals having higher allowable costs, federal guidelines do not differentiate between hospital and non-hospital-based skilled nursing units. The level of staffing is higher in a hospital nursing unit than in any community nursing home. Specialized equipment and services are offered in the hospital skilled nursing unit which are not offered in the community nursing homes. There are different conceptual approaches to care in the skilled nursing unit in a hospital as compared to those provided in community nursing facilities. Acutely ill patients on intravenous feeding or hyperalimentation, and those with multiple diagnoses require the hospital level nursing care. These units are not intended to provide residential care. Hospital beds are licensed under Rule 10D-28, whereas nursing home beds are licensed under Rule 10D-29, Florida Administrative Code. Although the proposed rule requires skilled nursing beds in distinct units of hospitals to be comparatively and competitively reviewed with community nursing home applications, the two types of beds are not comparable. This creates an unfair comparison. As a matter of good health planning, these skilled units in hospitals should be reviewed differently and separately from regular community nursing home beds. By their nature, SNF beds in distinct units in hospitals are in fact "hospital" beds under Chapter 395 and not nursing home beds under Chapter 400, Florida Statutes. Hospital-based skilled nursing units are not considered special care units as defined in Rule 10D-28, Florida Administrative Code. Specifically, special care units deal with very specialized intensive care settings. However, pursuant to some federal guidelines and state licensing requirements, a skilled nursing unit is considered a custodial type setting. For example, special care units are surveyed about once every two years and skilled nursing facilities once every year. However, failure to conduct a survey is not a determinative factor for special care units continuing under the Medicaid/Medicare programs. Skilled nursing units are not as fortunate. In fact, failure to survey a skilled nursing unit leads to the expiration of its enrollment in the Medicaid/Medicare programs. Section 395.003(4), Florida Statutes, defines the various types of hospital beds and states that beds not covered under any specialty bed need methodology, which a skilled nursing unit is not, shall be considered general beds. This is why these hospital-based skilled nursing units are licensed as general acute care beds. The proposed rule amendments also present logistical problems. Hospitals and nursing homes are licensed under different chapters of the Florida Statues and the Florida Administrative Code, and those standards do not match. Their projects are in different planning cycles. HRS intends that hospitals apply for skilled nursing units on the nursing home application currently in use, but admits that the application does not really fit this type of project. The proposed rule amendments regarding skilled nursing units will be costly and burdensome. Although skilled nursing units offer valuable services and few currently exist, under the nursing home need rule it will be difficult to prove need for these projects. A hospital desiring to establish one will likely find itself having either to challenge the fixed need pool for nursing home beds or litigate the almost inevitable denial of its application for lack of need. Either course of action would involve time and expense over and above those usually encountered in the CON process, particularly because such an application would likely draw the opposition of existing nursing homes, even though their services are not really comparable. The proposed rule amendments do not comport with the basic health planning policy of reducing over-bedding by encouraging conversion to other services. It is unlikely a hospital could get a skilled nursing unit by showing a numeric need under the nursing home need methodology, and any attempt to show exceptional circumstances would be hampered by the lack of utilization data. Such beneficial conversions will probably also be chilled by the difficulty in converting a skilled nursing unit back to general acute care use, should it not be successful. Given the extreme acute care over-bedding which exists throughout the state, it is not anticipated that there will be any need for additional acute care beds for the foreseeable future. Since a skilled nursing unit would not be counted in the acute care bed inventory, the reconversion to acute care use would have to undergo CON review and would almost certainly be denied. 10-5.002(52) Proposed Rule 10-5.002(52) defines refinancing costs, which Rule 10- 5.004(2)(c) states are subject to expedited review under Section 381.706(2). The purpose of this definition is to provide guidance to applicants by identifying examples that are often encountered in either bond refunding or refinancing. The definition is straightforward in nature and encompasses the elements common in refinancing. Mr. Balsano, testifying for Adventist, readily acknowledged the preciseness of this definition, but faulted the definition for its absence of any discussion as to the potential benefit of refinancing. However, Mr. Balsano's concerns were misplaced. Distinctions exist between the benefits of refinancing and the meaning of refinancing. Indeed, the benefits of refinancing go to the merit of whether or not the certificate of need should be granted. Since every applicant is required to address the review criteria found in Section 381.705, Florida Statutes, the proper forum for addressing the benefits of refinancing is in the CON application itself. Proposed Rule 10- 5.002(52) is simply a definition. 10-5.004(2)(g)--Projects Subject to Expedited Review: Capital Expenditure Projects This proposed rule allows applicants who propose a capital expenditure project to improve, repair, or correct their existing facility to apply for a certificate of need on an expedited basis. This proposed rule is conducive to encouraging existing facilities to make needed improvements by seeking approval of the expenditure expeditiously and without the delays associated with batching cycles. It is important for a provider to make and complete corrections or improvements quickly in order to minimize the disruption of patient care. Some of the more common capital expenditures include expansion of emergency departments or emergency rooms and the renovation or expansion of other patient care areas. An application to relocate a hospital is also considered a capital expenditure. Under extreme circumstances of pervasive physical plant deficiencies, coupled with a lack of practical renovation options to overcome plant deficiencies, an existing health care facility might apply for a replacement facility. Only when such replacement facility would (1) involve no new beds or changed bed use (e.g., from general acute care to comprehensive medical rehabilitation beds), (2) involve no substantial change in services, and (3) involve no substantial change in service area would HRS consider such an application to be solely reviewable as a capital expenditure and thus entitled to expedited review under the proposed rule. HRS reviews replacement facility applications by carefully assessing the applicants' claims of pervasive physical plant problems. HRS sends a team of experts, including architects, to the existing facilities to independently judge whether the physical plant is in such a condition as would warrant replacement and whether renovations could serve as a practical alternative from a physical standpoint. HRS also performs an economic assessment to compare the alternatives of replacement versus renovation in order to determine the most cost-effective alternative. Replacement facility applications typically involve a determination not of whether dollars will be spent, but rather, how they are best spent--by replacement or by renovation. As such, HRS helps to contain health care costs without participation by competitors in these institution- specific decisions. Pursuant to Section 381.709(5)(b), Florida Statutes, competitors do not have standing to challenge a proposed capital expenditure and, therefore, there is no adequate reason to defer review of these projects until a future application cycle. Further, when a capital expenditure approval is sought to replace or relocate an existing facility, no one other than the applicant/existing facility can apply to spend or make those expenditures. An unrelated entity cannot compete to replace another entity's existing facility. Conducting a comparative review with respect to a capital expenditure project for the replacement of a hospital is illogical, unworkable, and futile. 10.5.008(1)(c)3 and 10-5.008(3)(b)--Capitalized Costs Proposed Rule 10-5.008(1)(c) requires that a letter of intent describe the proposal with specificity. Subsection (1)(c)3 sets forth the following requirement: 3. A proposed capital expenditure must be rounded to the nearest dollar . . . . If no capital expenditure is proposed, the applicant must so indicate. If the actual capital expenditure has already been incurred, either wholly or in part, and the project will account for such expenditures as capitalized costs, regardless of the purpose, then the total capital expenditure of the project shall be indicated. As related to this same subject, proposed Rule 10-5.008(3)(b) states: (b) Capital expenditures incurred for projects not originally subject to Certificate of Need review must be identified as a proposed expenditure when such expenditure will be capitalized in a project for which a Certificate of Need is required. HRS asserts that this proposed rule codifies HRS's existing policy and that the purpose of this provision is to develop consistency in how applicants treat an already incurred capital expenditure. It is also allegedly intended that this proposed rule give uniformity concerning how project costs are calculated and allocated. For example, if an applicant is going to convert space from one use to another, the value of the space must be included in the applicant's capital expenditure estimate. While Ms. Gordon-Girvin, HRS's health planning expert, opined that this proposed rule is consistent with current practices in the health care market place concerning how capital expenditures are treated and that it forms a common basis of comparison for comparing the applicants' treatment of capitalized costs, the greater weight of the credible evidence does not support these opinions. Actually, the effect of these proposed rules is that a certificate of need applicant, who has previously made capital expenditures and later pursues a certificate of need project utilizing such prior capitalized costs, must identify and include those prior capital expenditures as a portion of the certificate of need project, even though no actual incremental funds will be necessary or spent in connection with the project. One of the problems with proposed Rules 10-5.008(1)(c)3 and (3)(b) is that they both ignore a distinction between fixed costs and variable costs which is fundamental to a financial evaluation of any project. Specifically, it is inappropriate to require an applicant who will have no incremental costs in implementing a project to allocate a portion of prior capital expenditures, where such an application is measured against a competing application in which the entire outlay for capital costs will be necessary. This distorts the evaluation due to inappropriately comparing prior fixed costs to future variable costs. An example of the illogical result of the proposed rules provides guidance. If a hospital has already spent one million dollars to add a CON- exempt outpatient cardiac cath lab, and later seeks to establish an inpatient cardiac cath program, under these proposed provisions, that hospital would have to represent a cost of one million dollars in its application to convert the outpatient cardiac cath lab to an inpatient project. From a health planning and financial standpoint, this is inappropriate. Having to include capital costs which have already been incurred and viewing those costs in the context of the decision to approve or reject a CON project is misleading. Ultimately, the purpose and objective of the CON process is to minimize duplication of health care resources. The proposed rules work in conflict with that goal. Conversion of underutilized resources to resources that could be more beneficially utilized is a policy that is encouraged by HRS. This policy is encouraged in the various need methodologies. One of the reasons to encourage a conversion is that often zero dollars are involved to convert a project from one CON-approved use to another CON-approved use. Proposed Rules 10-5.008(1)(c)3 and (3)(b) would eliminate consideration of the minimal cost involved in a conversion project and are therefore unreasonable. Moreover, the proposed rules could end up creating excess resources in the system simply because they would eliminate the preference for conversion as opposed to new construction. With respect to allocating prior capital expenditures, the proposed rules, as alleged by HRS, are intended to codify existing HRS policy as well as provide uniformity to the process of ascertaining project costs. These proposed rules do neither. In point of fact, HRS has accepted, within the last three years, conversion projects indicating a zero project cost in the application. The proposed rules are thus inconsistent with current HRS policy of accepting and evaluating these applications and are contrary to HRS's stated intention in this proceeding. However, with respect to providing uniformity to the process of ascertaining project costs, the proposed rules provide no methodology by which prior capital cost allocations are to be determined. Indeed, there is no uniformity proposed regarding how a health care facility or applicant accounts for capital expenditures. Generally, a capital expenditure is one that is "material" and the useful life of the item capitalized exceeds one year. What is material to one applicant may be entirely different from that which would be material to another applicant. Thus, the uniformity of presentation of prior capitalized costs contained in CON applications submitted to HRS for review will not and cannot exist as envisioned by HRS in its proposed rules. 10-5.005(2)(e) Proposed Rule 10-5.005 relates to exemption from CON review and Subsection (2)(e) states as follows: (e) Failure to initiate the exemption within twelve months after it appears in the Florida Administrative Weekly will result in the notice of exemption being void. The alleged basis for this proposed rule is to protect those persons pursuing an exemption by ensuring that they are still eligible for it under the same facts and circumstances. Additionally, HRS has encountered problems in the past when entities have received a determination of exemption for a project but have failed to implement the project. In one case, HRS gave a nursing home an exemption to replace a facility on site. After discharging the patients, the nursing home took no further action. However, these beds are still licensed and are included in the bed inventory. Such a situation artificially suppresses the need for nursing home beds in that district for the planning horizon. The proposed rule is an attempted response to this problem. The laws implemented by the proposed rules are Section 381.706 and 381.713(1). Pursuant to these sections, HRS must grant an exemption if the applicant meets the statutory definitions. Further, if a project is exempt, it is not subject to review. Exemption requests may be made at any time and are not subject to batching requirements. Once a project is deemed to be exempt and not subject to review, HRS ceases to have jurisdiction over the project and HRS, accordingly, has no jurisdiction to void an exemption. 10-5.008(2)(f) Proposed Rule 10-5.008(2)(f) establishes a procedure for HRS and applicants to follow when a departmental need methodology does not exist for a proposed project. The proposed rule attempts to clarify for applicants how best to present themselves when applying for a project for which no methodology has been adopted in an existing rule. This is particularly useful to applicants in addressing the need component required by statute. Policy utilized but not yet adopted by HRS will be provided to applicants in addressing the need component required by statute; however, applicants are not bound by that policy and may tender their need calculations. This proposed rule gives credence to the fact that there may be different methodologies and allows applicants the opportunity to make all the necessary arguments to demonstrate the nature and extent of entitlement to a certificate of need. 10-5.0085(4) Proposed Rule 10-5.008(4) describes shared service arrangements and delineates the procedures applicants must follow to initiate or terminate a shared service. The part of the proposed rule challenged by FHA and the area on which it focused concerned the termination of a shared service arrangement. Proposed Rule 10-5.008(4) provides in pertinent part: (4)(a) The following factors are considered when reviewing applications for shared services where none of the applicants are currently authorized to provide the service: * * * Any of the parties providing a shared service may seek to dissolve the arrangement. This action is subject to review as a termination of service. If termination is approved by the department, all parties to the original shared service give up their rights to provide the service. Parties seeking to provide the service independently in the future must submit applications in the next applicable review cycle and compete for the service with all other applicants. * * * 6.b. The following factors are considered when reviewing applications for shared services when one of the applicants has the service: * * * e. Dissolution of a shared services contract is subject to review as a termination of service. * * * If termination is approved, the entity(ies) authorized to provide the service prior to the contract retains the right to continue the service. All other parties to the contract who seek to provide the service in their own right must request the service as a new health service and are subject to full Certificate of Need review as a new health service. (Emphasis added) The basis for requiring CON review for a termination of a shared service as delineated above is found in Section 381.706(2)(e), Florida Statutes (1989). If a shared service arrangement terminates, the party who originally had the service would retain the service. This is reasonable because the entity would have already been granted a certificate of need for the service, singularly offered. The party would be placed back in the same situation it was in prior to the shared service. Conversely, in situations where neither party originally had the service, the remaining parties would have to apply for the service in a batched review. This, too, is reasonable in that the service would no longer be shared and the ability to provide it singularly would be evaluated anew. Here, the party would also be placed back in the same situation it was in prior to the shared service. Additionally, a shared service arrangement (and approval of it) is based on certain benefits present within that arrangement. Upon termination the same benefits may not be present. The identity of the parties and their relationships to each other will have changed. Review at this point provides an applicant the opportunity to compete again to establish the service in its own right under a different set of circumstances, and it allows other providers to compete either for the service in their own right or through another shared arrangement. Such a policy is prudent because the very reason for the shared service was to produce benefits that were not otherwise obtainable singularly. Indeed, even FHA's own witness, Mr. Bebee, acknowledged that certain advantages to a shared services arrangement might not be present when such an arrangement terminates. 10-5.010(2) Proposed Rule 10-5.010(2) concerns what local health plan is to be used and addressed in a CON application, and it provides as follows: The applicable local health plan is the most current plan adopted by the appropriate local health council and which has been accepted and approved in writing by the Department at the time letters of intent are due or, if not accepted by the Department, as reviewed and commented on by the Department. The agency will provide to all prospective applicants those items of the local health plan which must be addressed in the application. HRS asserts that the purpose of this amendment to existing Rule 10- 5.010 is to assist applicants by identifying various components of the plan to which they should address their application and thereby maximize their time and effort and, ultimately, their chances for approval and that this proposed rule codifies current departmental practice of providing those items of the local health plan which must be addressed by the applicant. Contrary to HRS's assertion that this proposed rule is clarifying in nature, the rule in fact goes far beyond those parameters. "Reviewed and commented on by the Department" means that the local health council's adopted plan has been reviewed for consistency with existing need methodologies and has been commented on by HRS. HRS maintains that "commented on" does not mean verbal comments. The proposed rule does not, however, specify that only written comments were intended. Indeed, HRS admitted that the way the rule is drafted it takes into account oral as well as written comments. Statutorily, HRS is required to adopt as a rule the local health plans or portions thereof to be used in the CON review regulatory process. Local health plans generally contain allocation factors, preferences, and policies with respect to the particular district. Within the last several months, HRS has sought to adopt as a rule preferences and policies set forth in the various local health plans around the state of Florida. HRS withdrew those proposed rules. Proposed Rule 10-5.010(2) does not make reference to or account for the fact that the local health plans must be adopted as rules by HRS. HRS cannot circumvent statutory requirements by proposing that an applicant address "approved plans," nor can it require an applicant to address local health plans with which HRS is not in full agreement with the local health council as to whether the plan is consistent with statutory guidelines. Indeed, where HRS and the local health council are in disagreement, an applicant is pulled between HRS and the local council. This proposed rule allows HRS to simply reject the expressed wants of the local health council and to insert its own comments and views, thereby inserting itself into a province exclusively reserved to the local health councils. 10-5.020 Proposed Rule 10-5.020 involves addition of one sentence to the existing rule. The added language provides that HRS will issue a license to the CON holder in accordance with the CON and will not issue a license for fewer beds than the total on the CON. The proposed addition to this rule addresses a problem currently facing the Department, and it reflects a change in agency policy for HRS. Basically, the added language clarifies for an applicant or certificate of need holder that the Office of Licensure and Certification shall only issue a license consistent with the terms of the certificate of need. The proposed rule addition conforms to several health planning goals. First, it requires the implementation of a project in accordance with the certificate of need. Second, the language addresses HRS's current problem of need suppression by industry members. Third, it seeks to ensure uniform development of services. This proposed rule does not penalize hospitals who want to do phase-in type projects. On the contrary, the language seeks to ensure that needed beds and services will be implemented in the horizon year in accordance with the application and entitlement demonstrated by the applicant. Economic Impact Statement The Summary of the Estimate of the Economic Impact states in relevant part: The proposed amendments are expected to have no adverse impact either on existing and new applicants for certificate of need, or on small and minority businesses . . . . The Economic Impact Statement (EIS) addresses the cost to the agency of implementing the proposed rules, an estimate of the cost to persons directly affected by the proposed rules, an estimate of the impact of the proposed action on competition, a statement of the date and method used in making those estimates, and an analysis of the impact on small businesses as defined in the Florida Small and Minority Business Assistance Act of 1985. Specifically, the EIS states that the proposed rules "will have a minimal economic impact on current or future certificate of need applicants and the public at large." There is no competent, substantial evidence to establish with specificity the existence of any defects in the EIS which impaired the fairness of the rulemaking proceeding or the correctness of the agency actions related to the EIS.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED: 1. Proposed Rules 10-5.002(1) and (52), 10-5.004(2)(g), 10-5.008(2)(f), 10-5.0085(4), and 10-5.020 are valid. 2. Proposed Rules 10-5.002(13); 10-5.008(1)(c)3, (2)(d), and (3)(b); 10- 5.005(2)(e); and 10-5.010(2) are invalid exercises of delegated legislative authority. DONE and ORDERED this 10th day of October, 1990, in Tallahassee, Florida. DIANE K. KIESLING, 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 10th day of October, 1990. APPENDIX TO THE FINAL ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in these cases. Specific Rulings on Proposed Findings of Fact Submitted by Petitioners Venice Hospital and Adventist Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 4(3); 5(5); 6(6); 10(14); 12(15 and 16); 15-17(25-27); and 19(28). Proposed findings of fact 1, 3, 7-9, 11, 13, 18, 21, 22, 24, and 25 are subordinate to the facts actually found in this Final Order. Proposed finding of fact 2 is unnecessary. Proposed findings of fact 14, 20, 23, and 26 are unsupported by the credible, competent, and substantial evidence. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner FHA Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 4(7); 5(10); 6(11); 8-12(12- 16); and 13-17(19-23). Proposed findings of fact 2, 3, 18, 19, and 21-24 are subordinate to the facts actually found in this Final Order Proposed finding of fact 7 is unnecessary. Proposed finding of fact 20 is unsupported by the credible, competent, substantial evidence. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner Humana Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 6(34, 35, and 38). Proposed findings of fact 2, 5, and 7-13 are subordinate to the facts actually found in this Final Order. Proposed findings of fact 1, 3, 4, and 14-19 are unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Petitioners NME and PIA Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2(34, 35, and 38); 3-6(39- 42); 8(53); and 9(54 and 55). Proposed findings of fact 1 and 7 are subordinate to the facts actually found in this Final Order. Proposed findings of fact 10 and 11 are irrelevant because these Petitioners dismissed their challenge to the EIS in the Stipulation of the parties admitted as Joint Exhibit 2. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner Sarasota Proposed findings of fact 1-4, 6, 7, and 13 are subordinate to the facts actually found in this Final Order. Proposed finding of fact 5 is unnecessary. Proposed findings of fact 17, 18, and 20 are unsupported by the credible, competent, and substantial evidence. Proposed findings of fact 8-12, 14-16, and 19 are irrelevant. Specific Rulings on Proposed Findings of Fact Submitted by Respondent HRS Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1 and 2); 2(28); 3(46); 4(47-49); 5(51); 7(29); 8(32 and 33); 9(33); 11(8); 13(17); 14(18); 15(23); 16(23 and 24); 17(36); 19(37); 21(57); and 22(58). Proposed findings of fact unnumbered paragraph re: 10-5.005(2)(e); 10; 12; 18; 20; and unnumbered paragraph re: Economic Impact Statement are subordinate to the facts actually found in this Final Order. Proposed findings of fact 1A and 6 are unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor HCA DOCTORS Each of the following proposed findings of fact is adopted in substance as modified in the Final Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 6(30) and 7(31). Proposed findings of fact 2-5 are subordinate to the facts actually found in this Final Order. Proposed findings of fact 1 and 9-11 are unnecessary. Proposed findings of fact 8 is irrelevant. *NOTE: THIS RECOMMENDED ORDER'S EXHIBIT "A" [RULE 10-5.002, 10-5.004(2), 10-5.005(2), 10-2.008(1)(n), 10-5.008(5)(h), 10-5.010(2), 10-5.020] IS AVAILABLE FOR REVIEW IN THE DIVISION'S CLERK'S OFFICE. COPIES FURNISHED: Jeffery A. Boone, Attorney at Law Robert P. Mudge, Attorney at Law 1001 Avenida del Circo Post Office Box 1596 Venice, FL 34284 Kenneth F. Hoffman, Attorney at Law 2700 Blair Stone Road Post Office Box 6507 Tallahassee, FL 32314-6507 James C. Hauser, Attorney at Law 204-B South Monroe Street Tallahassee, FL 32301 C. Gary Williams, Attorney at Law Stephen C. Emmanuel, Attorney at Law Post Office Box 391 Tallahassee, FL 32302 Theodore C. Eastmoore, Attorney at Law 1550 Ringling Boulevard Post Office Box 3258 Sarasota, FL 34230 Robert A. Weiss, Attorney at Law John M. Knight, Attorney at Law The Perkins House, Suite 101 118 North Gadsden Street Tallahassee, FL 32301 Thomas R. Cooper, Attorney at Law Edward G. Labrador, Attorney at Law Department of Health and Rehabilitative Services 2727 Mahan Drive, Suite 103 Tallahassee, FL 32399-0700 John Radey, Attorney at Law Elizabeth W. McArthur, Attorney at Law Suite 1000, Monroe-Park Tower 101 North Monroe Street Post Office Drawer 11307 Tallahassee, Florida 32302 Donna H. Stinson Moyle, Flanigan, Katz, FitzGerald & Sheehan, P.A. The Perkins House--Suite 100 118 North Gadsden Street Tallahassee, Florida 32301 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Linda K. Harris Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Liz Cloud, Chief Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32399-0250 Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32399-1300
