Findings Of Fact Danette Wilkins was licensed by the Board of Nursing and held License #17317-2 issued by the Board. Respondent was given notice of the formal hearing as required by mail at 321 North Clark Street, Starke, Florida 32091. Neither the notice nor other mail sent to her by the Hearing Officer was returned. Notice is deemed adequate, and Respondent did not appear or request a continuance. By order of the Board Respondent's license as a registered nurse was suspended from April 24, 1981, until April 23, 1982, one year from receipt of the signed Counter-Stipulation by the Board. Barbara M. Hunter, the Administrator of Tanglewood Nursing Home, was present at the termination of the home's employee known as Danette Wilkins (date of birth: 10/07/36; Social Security #262-48-7112). The employee spoke with Hunter about her prior employment and disciplinary problems with the Board of Nursing. The employee was Danette Wilkins. Respondent was employed at Tanglewood Nursing Home from June 16, 1981, until July 18, 1981, as a registered nurse and performed the duties of a registered nurse during the course of her employment. At the time she was employed her license was suspended.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that the license of Danette Wilkins be revoked. DONE and ORDERED this 14th day of January, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1982. COPIES FURNISHED: William M. Furlow, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Ms. Danette Rae Wilkins 321 North Clark Street Starke, Florida 32091 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue Which of three competing applicants for a certificate of need to construct a nursing home in health planning District 4, Subdistrict 3, best meets the statutory and rule criteria for approval.
Findings Of Fact The Agency for Health Care Administration (AHCA) is the department of state government which administers the certificate of need (CON) program for health care facilities and services in Florida, pursuant to Section 408.034, Florida Statutes. For the planning horizon beginning July 2001, AHCA published a numeric need for an additional 121 community nursing beds in nursing home planning District 4, Subdistrict 3, for southeast Duval and St. Johns Counties. Sawgrass Care Centers, Inc. (Sawgrass), Woodlands Extended Care, Inc. (Woodlands), and National Healthcare Corporation (NHC) are competing, mutually exclusive applicants for a CON to construct a 120-bed nursing home in District 4, Subdistrict 3. After reviewing the applications, AHCA preliminarily approved the issuance of CON No. 9125 to NHC. In the Prehearing Stipulation, filed on November 2, 1999, the parties agreed that the following criteria are either not applicable or are not in dispute: Subsections 408.035(1)(d), (e), (f), (g), (j), and (k), and Subsections 408.035(2)(a), (b), (c), and (d), Florida Statutes; Rule 59C- 1.036, Florida Administrative Code; and allocation factors 1, 3, 4, and 9 of the local health plan. During the final hearing, the parties also stipulated that all letters of intent were legally sufficient. The issues requiring resolution in this proceeding, the parties agreed, are: Subsections 408.035(1)(a), (b), (c), (h), (i), (l), (m), (n), and (o); and Subsection 408.035(2)(e), Florida Statutes; allocation factors 2, 5, 6, 7, and 8 of the local health plan; and Section 408.037, Florida Statutes. Sawgrass is the applicant for CON No. 9126 to construct a 120-bed nursing home in northern St. Johns County for approximately $3,967,000 in construction costs for a 56,800 square-foot building. The total project will cost approximately $6.4 million. Mr. S. W. Creekmore, Jr., who is the sole shareholder and president of Sawgrass, has been in the nursing home business over 30 years. Currently, Mr. Creekmore owns and operates between 30 and 40 nursing homes in Arkansas, California, Missouri, New York, Tennessee, Texas, and Nevada. Sawgrass is currently constructing Sawgrass Care Center of North Duval, an 84-bed addition to a 60-bed facility in Duval County. If CON No. 9126 is issued to Sawgrass, it will be on condition that Sawgrass: locate the 120-bed nursing home in northern St. Johns County within zip codes 32082, 32092, 32095, and 32259, in District 4, Subdistrict 3; provide a minimum of 63.51 percent total annual patient days to Medicaid patients; establish a 20-bed Alzheimer's care unit, a 20-bed Medicare unit, hospice services and respite care; admit AIDS patients; and construct the facility according to the schematic drawings. Sawgrass contends that its application should be approved primarily because of its proposed location in northern St. Johns County. An increase of beds in St. Johns County will correct what Sawgrass' expert health planner described as a maldistribution of nursing home beds within the district. Sawgrass also presented evidence questioning the financial feasibility of NHC's proposal. Woodlands is the applicant for CON No. 9123 to construct a 120-bed nursing home in southeast Duval County for approximately $5.2 million in construction costs for 53,155 gross square feet, and $7.9 million in total project costs. Woodlands currently operates Woodlands Terrace Extended Care Center (Woodlands-Deland), a 120-bed nursing home located in Deland, Florida. Woodlands is owned by Mr. Morris Esformes, who also owns EMI Enterprises, Inc. (EMI), a nursing home management company, with its headquarters in Illinois. EMI manages almost 3,000 nursing home beds in Missouri, Illinois, and Florida, including Woodlands-Deland. EMI provides bookkeeping, payroll, purchasing, insurance and other contract negotiation services for the nursing homes it manages. If its CON application is approved, Woodlands is committed to constructing the facility in southeast Duval County, to serving 63.01 percent Medicaid, 1 percent AIDS, and .5 percent indigent care, and to establishing units of 24 beds for subacute care and 20 beds for Alzheimer's care. Woodlands contends that existing nursing home occupancy levels support its decision to build and to condition its CON on a location in southeast Duval County. Woodlands presented evidence intended to demonstrate that the design of its Alzheimer's unit, and its proposed staffing levels are superior to those of NHC. Woodlands also maintained that its estimated construction cost is more reasonable and its design preferable to that of Sawgrass. Woodlands presented evidence to support the accuracy of Schedule 2 of its application and of its projected financing costs. NHC, the applicant for CON No. 9125, started in 1971, with fourteen nursing homes. Currently, NHC owns or manages approximately 100 facilities in nine states, 42 of those in Florida. Ten of the 42 Florida facilities are also owned by NHC. The new facility, NHC HealthCare, St. Augustine, will cost approximately $6.7 million to construct the building with 63,104 gross square feet, and $10.2 million in total project costs. NHC's CON would be issued on condition that NHC (1) provide 63.05 percent of total facility patient days to Medicaid at stabilized occupancy; (2) establish, as special programs, a 16-bed subacute unit and a 30-bed Alzheimer's/Dementia unit, provide adult day care through an existing provider, and offer respite and HIV/AIDS care. In addition, NHC commits to selecting a highly accessible site within one mile of a major artery or within three blocks of a bus stop. Although NHC presented evidence that St. Johns County is the preferable location for a new nursing home, it is not willing to have a condition on the county in which it will build as a condition for the CON. NHC, through the testimony of its assistant vice president for health planning, specifically reserved the right to locate anywhere within the subdistrict so long as the location complies with the local health plan description of a highly accessible site. NHC contends that approval of its CON will bring possibly the first and, among the competing applicants, the largest Alzheimer's unit to St. Johns County. NHC also challenged the financial feasibility of the Sawgrass and Woodlands proposals. 408.035(1)(a) - need for the facility and services proposed in relation to the district plan At issue in this proceeding, from the district health plan for District 4, are the following preferences or allocation factors: 2) For urban areas, applicants who will locate in an area highly accessible in terms of public and private transportation - within one mile from a major artery or within three blocks from a bus stop. Applicants who include in their CON application specific plans detailing how they intend to address the mental health needs of their clients, including having a provider skilled in the recognition and treatment of mental health problems. Applicants who document that their project addresses an unmet need for the nursing home placement of persons with a specific debilitating illness. Applicant must document that a need exists. (In November 1992, hospital discharge planners reported having difficulty placing ventilator and tracheotomy patients). Applicants who have JCAHO accreditation and superior ratings from AHCA in existing facilities. Applicants who propose to locate in a county or defined subcounty area within a subdistrict (such as north, southwest or southeast Duval; east or west Volusia) with a licensed bed occupancy rate of at least 91 percent for the most recent six-month period (January-June or July-December) prior to the start of the current CON review cycle and no additional beds are approved. Sawgrass described the area of St. Johns County in which it will locate as not urban and concluded, therefore, that allocation factor two is inapplicable to the Sawgrass application. Woodlands, which proposed locating in southeast Duval County, identified three alternative sites, all within a mile of major county, state, or interstate roads and highways, and within three blocks of public bus stops. Woodlands is not, however, committed to selecting any of those three sites. NHC's CON would include compliance with preference two as a condition for approval. If it chooses to locate in St. Johns County, NHC cannot comply with the alternative of locating within three blocks of a bus stop because there is no public transportation system in St. Johns County, but NHC can meet the preference by choosing a site in the County which is near a major artery. The three applicants included, in their CON applications, letters from mental health services providers who are willing to enter into agreements to care for residents of the facilities. While an expert witness raised an issue regarding the dates of the supporting letters, which are 1998 and early 1999 for Sawgrass, early in 1999 for Woodlands and, by contrast, late 1997 for NHC, there is no evidence that the services proposed are not still available. Overlapping to some extent with allocation factor five, for providing mental health services, is six, for meeting unmet needs of persons with specific debilitating illnesses, such as Alzheimer's/Dementia. The proposed 20-bed units dedicated to Alzheimer's/Dementia care at Sawgrass and Woodlands, and 30-bed unit at NHC comply with the that factor. Sawgrass and NHC, based on their evaluations of the subdistrict, particularly of St. Johns County, noted an absence of Alzheimer's care in a dedicated unit. There was credible evidence, however, that 40 residents have been placed in a locked 60-bed dedicated dementia unit, established at a facility called Bayview in St. Johns County, subsequent to the filing of these CON applications. There was also evidence that an estimated 50 percent of all nursing home residents suffer from some form of dementia. Ratings by AHCA and the Joint Commission on Accreditation of Health Organizations (JCAHO), are not yet available for the 84-bed Sawgrass facility in Duval County, because it is still under construction. Sawgrass relied on the experience of its principal, Mr. Creekmore, and of Mr. Donald Fike, the president and owner of RFMS, a corporation which manages nursing homes in Florida, Nevada and Illinois. RFMS has an agreement with Mr. Creekmore to manage Sawgrass. Mr. Creekmore, who resides in St. Johns County, owns facilities in Tennessee, California, New York, Nevada, Arkansas, Texas, and Missouri, none of which has had a license revoked or suspended or been in receivership within 36 months prior to the hearing. Currently, RFMS manages and Mr. Fike has a controlling interest in partnerships that own two nursing homes in Florida, 120-bed Surrey Place of Ocala (Surrey Place), which also has 36 assisted living units, and Hawthorne Care Center of Brandon (Brandon) with 90 existing beds, 30 approved beds, and 64 assisted living units which are under construction. An additional facility managed by RFMS and owned by Mr. Fike is under construction in Lakeland. RFMS' employees at its corporate headquarters in Galesburg, Illinois, provide management, budgetary, accounting, and recruiting services. RFMS has never managed a facility for Sawgrass or Mr. Creekmore, but its two Florida facilities, Surrey Place and Brandon, were rated superior until the state eliminated superior licenses on July 1, 1999. Woodlands operates one Florida facility, Woodlands- Deland, which had been rated superior as long as it was eligible for that designation. Woodlands-Deland is not JCAHO-accredited. Woodlands relied on the experience of its owner, Mr. Esformes, and his management company, EMI. Mr. Esformes has been in the nursing home business for approximately 30 years. No specific information on the ratings of the facilities owned by Mr. Esformes or managed by EMI was provided. Of the 42 Florida nursing homes operated by NHC, ten are also owned by NHC. Three of the ten were rated superior, one was not yet eligible, and one was also JCAHO-accredited at the time the CON application was submitted. By February 1999, five of the ten NHC owned and operated facilities in Florida were rated superior. Twenty-eight of the 32 NHC-operated Florida nursing homes were rated superior. From January through June 1998, the average occupancy was 90.84 percent in the subdistrict, 91.3 percent for southeast Duval County, and 89.36 percent for northern St. Johns County. Woodlands is committed to establishing its facility in southeast Duval County, Sawgrass is committed to the northern four zip codes in St. Johns County, and NHC is not committed to either but, in general, supported the need for a nursing home in St. Johns County. Subsequent data on occupancy shows consistency with past levels. In the second six months of 1998, the occupancy levels in nursing homes in St. Johns County was 88 percent, and in southeast Duval, 93 percent. From January through June 1999, St. Johns was 89 percent and southeast Duval was 92.8 percent occupied. Suggesting that occupancy percentages are not the sole indicators of the availability of beds, a health planning expert for Sawgrass noted that significantly more empty beds are available in southeast Duval County as compared to St. Johns County due to the larger total number of beds in the Duval area. Three CONs were issued in 1998 and 1999 to Vantage Health Care Corporation, which was identified as a Beverly Corporation, the first one for 60 beds in St. Johns County, a second one to add 56 beds to the first CON with Duval/St. Johns as the county on the face of the CON, and the third to add four skilled nursing beds to the first two CONs, or a total of 120 beds all together. Although, counties are indicated on each CON, none is specifically conditioned on a particular location within the subdistrict. AHCA lists the Vantage beds in its inventory for St. Johns County, which is supported by the testimony of the Executive Director of the Health Planning Council of Northeast Florida and by the most restrictive location on the face of the first 60-bed CON. Although of questionable value due to the arbitrariness of using zip codes for health planning purposes and due to the relatively minor, 2 percent difference in occupancy rates, preference eight favors a proposal to locate in southeast Duval County. More important in determining the preference for a southeast Duval location is the prior approval of 120 beds for St. Johns County, even though Vantage could build its facility in southern St. Johns County. 408.035(1)(b) - availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of existing facilities and services in the district In addition to the comparison of occupancy levels in St. Johns and Duval Counties, other factors affecting the availability and utilization of nursing beds have been considered. The total population 65 and over in Duval county was 79,986 as compared to 17,294 for St. Johns County in 1995. Population growth, however, has been and is projected to be greater in St. Johns than in Duval County. From 1998 to 2003, the population 65 years and older is expected to increase from 36,988 to 39,790, or 7.5 percent, in southeast Duval County, and from 8,506 to 9,922, or 17 percent, in the northern four zip codes in St. Johns County. Despite the fact that St. Johns is relatively sparsely populated currently, the data supports a conclusion that the trend from 1990 to 1995, when the over 65 population increased by 12 percent in Duval County and by 26.3 percent in St. Johns County, is continuing. The lower occupancy in St. Johns County was attributed, in part, to two facilities with occupancy rates consistently in the 87 to 88 range which occupy over 30 year-old concrete block buildings with survey problems. Although, in 1998, all of the facilities in St. Johns County were rated superior. Another explanation was the fact that one 57-bed facility, in northern St. Johns County, reserves five beds for residents of its retirement community. A second nursing home, near Ponte Vedra Beach in St. Johns County, is also a sheltered facility, which is limited to residents of the retirement community. Migration patterns, in a study done around 1996, showed significantly more St. Johns County residents placed in Duval County facilities than Duval County residents in St. Johns County facilities. Bed-to-population ratios in St. Johns and southeast Duval Counties are also factors which may indicate the relative availability and accessibility of nursing home services. The health planning experts for Sawgrass and NHC determined that a maldistribution of beds is indicated by the bed-to-population ratio, showing that St. Johns County is underserved as compared to the rest of the district. NHC's health planner testified that, for every one thousand people over the age of 65, there are 32 beds in St. Johns County as compared to 42 beds in Duval County. Sawgrass' health planner noted that 72 percent of the beds but only 66 percent of the district population is located in southeast Duval County, while four percent of the beds and 15 percent of the population are in northern St. Johns County. The discrepancy in bed-to-population ratio is more significant, according to the experts for Sawgrass and NHC, than the two percent difference in occupancy levels between the two areas of the subdistricts. Bed-to-population ratio analyses, however, assume uniform need which is not necessarily valid due to demographic variances in the population. The bed-to-population analysis also assumed that what was, at the time, 116 approved beds for Vantage would be constructed in southern St. Johns County. Considering the Vantage CONs together, the more reasonable conclusion is that Vantage could build the new nursing home anywhere in the County. Woodlands' proposed location was criticized by the health planner for NHC as contributing to a clustering of facilities in Duval County. As a part of that cluster, Woodlands might not greatly enhance accessibility although it does meet the local health plan preferences related to accessibility and occupancy. In addition, NHC argued, that the area is growing in young families not older people due in part to its proximity to Mayport Naval Station, and as indicated by the construction of three new elementary schools in the last six years. Accessibility and availability to specialty programs was another consideration evaluated by the health care planners. There is a need for more complex subacute care in nursing homes. The evidence indicated that Alzheimer's care in a dedicated unit was available in St. Johns County at the time of hearing although it had not been at the time the applications were filed. See also Finding of Fact 18. 408.035(1)(c) - history of providing and ability to provide quality of care As a legal entity, the applicant Sawgrass has no history of providing nursing home care in Florida. Sawgrass, however, through the experiences of Mr. Creekmore and Mr. Fike, has established that the owner and operator have histories of providing high quality of care. Based on the descriptions of operational styles and the policies of RFMS, Mr. Fike's management company, Sawgrass demonstrated the ability to provide a high quality of care if its CON application is approved. See Findings of Fact 20. Woodlands, as to a legal entity operating in Florida, has a limited but excellent history, with a superior rating at Woodlands-Deland beginning in 1997. Woodlands asserted, but without specific information on their other facilities, that its principal, Mr. Esformes, and his management company, EMI, have the ability to provide a high quality of care if CON 9123 is approved. See Findings of Fact 21. NHC has a more inconsistent but improving history, based on licensure, of providing quality of care in its Florida facilities. It is the only applicant with JCAHO accreditation but in only one of its ten Florida nursing homes. NHC has significantly more experience operating nursing homes than either of the other two applicants. See Findings of Fact 22. To determine quality of care, an additional factor urged for consideration is staffing, which overlaps with the following critera: 408.035(1)(h) - availability of resources, including health personnel, management personnel On Schedule 6, the table in the CON application which shows staffing patterns, NHC showed a total of 11.2 full-time equivalent (FTE) registered nurses (RNs). On Schedule 8, which listed the projected income and expenses for the proposal, NHC allocated RN salaries for 7.0 FTEs. NHC's 7.0 FTEs for RNs providing direct patient care is comparable to 5.6 for Sawgrass, and 8.4 for Woodlands. The comparison is valid because NHC included administrative as well as direct care positions in the total of 11.2 FTEs for RNs, including unit directors or managers and an assistant director of nursing. An NHC witness conceded that the RNs in these positions do not, as a routine responsibility, provide direct care. NHC also included a central supply clerk and nursing secretary in the FTEs for nurses aides or CNAs. NHC's regional administrator for Florida, Tennessee and Kentucky testified that staff in these positions also do not, as a routine, provide direct care to patients. NHC included one FTE for a medical director on Schedule 6, but indicated, at hearing, that the position is not full time. When the administrative positions are excluded, NHC's total direct hours of care per patient day (ppd) is approximately 3.18 hours, not 3.29 as described in the CON, as compared to 3.39 for Woodlands, and 3.29 for Sawgrass. When broken down based on the type of nurse providing the care, NHC's 3.18 total hours combines 2.38 hours by certified nurse assistants (CNAs) and 0.8 by licensed nurses (RNs and LPNs). Woodland's total of 3.39, combines 2.32 hours by CNAs and 1.07 hours by licensed nurses. For the Alzheimer's unit, NHC, in the CON application, erroneously described its proposal as providing 5.0 hours of care per resident day, but that was corrected at hearing by NHC's expert in health care financial feasibility and reduced to 2.58 hours. Woodlands provided at its current facility and proposed to provide at a new one approximately 3.9 hours ppd in the Alzheimer's unit. The staffing levels proposed by Sawgrass, NHC, and Woodlands all exceed the minimum state requirements of .06 ppd for licensed staff and 1.7 ppd for CNA, or 2.3 hours ppd total. Direct care staff at NHC perform some functions which would be performed by different personnel in the other two proposals. These duties include evening housekeeping, setting up and cleaning dining tables in the Alzheimer's unit, and answering evening telephone calls. Another indication of the demands on staff time is reflected in NHC's proposal to employ 7 FTEs in housekeeping for a 63,000 square foot building, as contrasted to Woodlands' use of 8 FTEs in its housekeeping department for 53,000 square feet. The staff at Woodlands will provide more direct resident care by higher level staff and reasonably, therefore, presumptively a higher quality of care than Sawgrass or NHC. NHC asserted that it can attract and retain quality staff by paying higher salaries. Using NHC's salary levels, NHC's expert determined that Sawgrass and Woodlands underestimated salary expenses by $573,000 and $522,000 respectively. NHC's total for projected salaries is $2,864,000, as compared to $2,386,653 for Woodlands and $2,318,119 for Sawgrass, although NHC will have seven fewer FTEs than Woodlands and six more than Sawgrass. NHC's comparison used 1998 average salaries, inflated forward, from Palm Gardens of Jacksonville (Palm Gardens), a facility managed by NHC for the owner, Florida Convalescent Centers (FCC). The average salary, for example for nurses, including administrators, such as the assistant director of nursing and Alzheimer's director, was applied to each nurse's position proposed by Woodlands and Sawgrass. NHC's methodology, particularly without any comparison of patient mix and acuity at Palm Gardens to that projected by the applicants, and the use of five percent annual inflation as compared to an actual annual inflation rate of three percent, when two statistical outliers are excluded, renders the analysis unreliable. The testimony of NHC's witness that the opening of new centers forces salaries to go up also indicates that the salary comparison includes some factor over and above actual inflation. 408.035(1)(h) - funds for capital and operating expenses, for project accomplishment and operation; 408.037(1)(a)1. - listing of all capital projects; and 408.035(1)(i) - immediate and long term financial feasibility The ability of Sawgrass to fund and finance the project was, in part, established by the deposition testimony of Jackie Garrett, Vice President, for Commercial Lending, First National Bank, Fort Smith, Arkansas, who is accepted as an expert in banking and finance as well as a fact witness. Having been involved for 30 years in financing projects for the Sawgrass owner, Mr. Creekmore, Ms. Garrett, in her letter of December 28, 1998, and in her testimony expressed the interest of the Bank in financing the Sawgrass project. Ms. Garrett also confirmed the possibility of financing up to 100 percent of the cost at better than an 8 percent fixed rate, as well as providing working capital as long as the loan is guaranteed by Mr. Creekmore. Ms. Garrett's letter to Mr. Creekmore offering to work out any contingencies with him and the inclusion of his personal financial statement in the application, lead to a reasonable conclusion that he can and will guarantee the financing for Sawgrass. Although a specific letter of commitment or the testimony of Mr. Creekmore could have provided a clearer commitment on his part, the documents in the application are sufficient to establish the short-term financial feasibility of Sawgrass. The accuracy of Schedule 2 of the Sawgrass CON application was questioned because it does not include an assisted living facility (ALF) for Duval County, which was proposed for construction on the campus with the nursing home. A financial expert for Sawgrass testified that the ALF is no longer planned, although AHCA was led to believe, in the prior nursing home CON, that an ALF would be built in conjunction with the nursing home. Comparing the historical payer mix and occupancy rates from similar facilities in the service area to staffing, salaries, and other fixed and variable expenses, the financial expert for Sawgrass demonstrated that the project is also financially feasible in the long term. To develop Woodlands-Deland, the general partner, Mr. Esformes, obtained financing primarily from AmSouth Bank in Orlando. The AmSouth loan was guaranteed by Mr. Esformes, who proposes similarly to finance the new Woodlands facility. In a letter dated December 30, 1998, and in her deposition testimony of October 26, 1999, an AmSouth assistant vice president indicates the availability of a loan to cover 75 to 85 percent of the total project cost. On behalf of EMI Enterprises, Inc., Mr. Esformes committed to funding the equity and working capital required from funds which are on deposit. AmSouth's lending limit for a borrower with Mr. Esformes' assigned risk rating is $15 million. NHC argued that Woodlands is not financially feasible in the short term because Mr. Esformes cannot borrow $8 million given his outstanding debt of $12,669,382. That position erroneously ignores the testimony of the bank officer when she stated that such projects, with liquidation of the property as a secondary source of repayment, can be treated separately, not grouped together and not aggregated to come to the $15 million total. She specifically considered Woodlands-Deland, saying, "And his other loan with the Deland property would be isolated for the same reason." See Deposition of Melissa Ann Ledbetter, October 26, 1999, page 11. In addition to the letter from AmSouth Bank, Woodlands presented a letter from and the testimony of Mr. Esformes on his commitment to the project. The evidence showed that Mr. Esformes has sufficient funds available to honor that commitment. Woodlands' proposal is, therefore, financially feasible in the short term. Woodland's long-term financial position was criticized based on Woodlands-Deland's not having achieved the utilization projected as quickly as projected. Utilization goals were adversely affected by the opening or expansion of other nursing homes at approximately the same time in the Deland area, an undesirable consequence which the District 4 health plan seeks to avoid. At the time of the hearing, Woodlands had a 1999 year-to-date profit of $106,000. Considering projected revenues and expenses, based on actual reimbursement rates at Woodlands- Deland, which are extremely high for Medicare, Woodlands' proposal is expected to be profitable in the long term. An expert for Sawgrass questioned NHC's short-term financial feasibility based on the sufficiency, commitment dates and changing investment policies of its funding sources. Schedule 2 of the NHC application lists total capital projects exceeding $436.6 million with approximately $397 million in "funds assured but not in hand and funds currently being sought." The application also includes letters of commitment establishing lines of credit from related companies National Health Investors, Inc. (NHI) for $260 million, and National Health Realty, Inc. (NHR) for $200 million. The letters are expressly valid through December 31, 1999, although what Sawgrass' expert estimated as the 12-month construction period for this project would begin approximately May 1, 2000, to end when operations commence on May 1, 2001. In addition, an examination of documents filed with the Securities and Exchange Commission (SEC) by NHI and NHR, according to the expert for Sawgrass, shows declining available funds and changing company objectives. As real estate investment trust (REIT) companies, NHI and NHR identify their typical financing arrangements mortgages and lease-back agreements, but do not specifically mention the extending of lines of credit. The SEC documents also indicate that NHI had approximately $136.9 million, available to fund health care real estate projects as of December 1998, not $260 million as committed for the line of credit to NHC. By June 1999, the SEC disclosures report a decrease to approximately $15.3 million available to fund health care real estate projects, of which approximately $12 million was available for the next 12 months. NHR's disclosures also indicate that the company will maintain its existing portfolio, not expand further. NHC's net income after taxes decreased from $23.7 million in 1997, to $8.2 million in 1998, adversely affected by declining Medicare reimbursements and increased taxes. The decline in profit from $37 million in 1997 to the projected $14 million for 1999 resulted largely from the expiration, on December 31, 1997, of special tax benefits for corporations. SEC disclosures indicate possible additional declines due to lawsuits over management contracts and a former employee, "whistle-blower" action, neither of which had been finalized at the time of the hearing. NHC's plan to reduce its taxes included the transfer of assets to NHI and NHR. NHC has also off-set losses by providing some therapies in-house and by group purchasing of pharmacy entical and medical supplies. In response to the loss of management agreements with FCC, NHC has successfully secured other management contracts and has eliminated certain regional positions. Reserves of approximately $31 million have been set aside for potential liability resulting from pending litigation, with FCC and in the former employee's qui tam action related to Medicare costs. Despite the efforts of NHC to adjust to changes in its financial position, the termination dates in the NHR and NHI letters of credit are troubling. The position of NHC, as investment advisor to NHI and NHR, and the ability of their Boards of Directors to change investment policies, without stockholder approval, suggests the likelihood of their funding the NHC project, if approved. Stronger support for a determination that at least NHR continues to be a source of funds for NHC comes from the deposition testimony of NHR's Senior Vice President, who signed the NHR line of credit letter. He noted that any projects submitted by NHC in the past have been approved by NHR and thinks it unquestionable that NHC would obtain financing for this project. That testimony rises to the level of the letters of interest by lending institutions submitted on behalf of the other applicants and establishes the short-term financial feasibility of the NHC proposal. NHC projected a net operating profit of $57,000 in year two which, with depreciation of about $350,000, results in a cash flow in excess of $400,000. NHC's proposal is financially feasible in the long term. 408.035(1)(l) - impact on costs; and 408.035(1)(m) - costs and methods of construction The estimated construction cost for Sawgrass is $70 a square foot for a 56,800 square foot building. By comparison NHC's estimated construction cost is $106 a square foot for the nursing home and a separate storage/maintenance building, totaling 63,104 square feet. Woodlands' 53,000 square foot facility will cost an estimated $98 a square foot. Sawgrass' construction costs were considered unreasonably low by some expert. The construction costs were developed by an expert in construction supervision and costs, who works for Medical Holdings Limited, another company which is owned by the Sawgrass President, Mr. Creekmore. The architects for the project work for another related wholly owned subsidiary of Medical Holdings Limited, Healthcare Builders, Incorporated (Healthcare Builders). Healthcare Builders is also owned by and only builds facilities for Mr. Creekmore. The estimated cost, $70 per square foot, is based on the use of local materials and subcontractors and excludes any profit, which alone would add from 8 to 10 percent to the cost. All of the salaries for the supervisors of the project, the general construction superintendent, the regular superintendent, and bookkeeper are paid by Healthcare Builders and excluded from constructions costs. Only one Sawgrass project, over the past 15 years, has required an application for a cost overrun. On this basis, Sawgrass established the reasonableness of the costs for its company. NHC's building is the largest and most expensive, with 71 resident rooms and 9-foot wide corridors, as compared to 66 rooms and 8-foot wide corridors for Woodlands and Sawgrass. NHC has 22 private rooms, but Woodlands and Sawgrass have 12 private rooms in each of their designs. NHC's private rooms range in size from 196.8 to 277 net square feet, as compared to 220 net square feet for Sawgrass, and 194 net square feet for Woodlands. Semiprivate rooms range in size from 196 to 246.7 net square feet for NHC, 198 to 218 for Woodlands, and 220 for Sawgrass. All three exceed the state minimums of 100 square feet for private rooms, and 160 square feet for semiprivate rooms. The schematics for NHC and Woodlands demonstrate more concern for safe outside spaces, with two separate enclosed courtyards, one designated for wandering which is typical of Alzheimer's residents. Woodlands' design also provides for two separate entrances, one for the main facility and one for the subacute unit. The subacute entrance is particularly desirable because the busier pattern of visitors is more akin to that in a hospital setting. NHC has 57 rooms with showers in the bathrooms, as compared to 53 for Woodlands and 18 for Sawgrass. The experts debated the benefits of privacy and the enhanced dignity and the reality that safety necessitates, for many, assistance in bathing. On the one extreme, NHC has unnecessarily included showers on the Alzheimer's unit for residents who are least likely to use them safely and most likely to need assistance, but Sawgrass has so few that the use of central bathing facilities will be necessary for most of its residents and will not enhance their privacy and dignity. Woodlands' design for the purposes intended, is the most reasonable, and its type of construction is the highest rated of the three. Despite the differences in size and construction costs, all three applicants propose relatively similar charges in a very narrow range of lows for Sawgrass and highs for NHC, from $105 to $115 a day for semiprivate rooms to $120 to $130 for private rooms. Reimbursement rates, primarily from Medicare, differ based on differences in acuity levels. 408.035 (1)(n) - past and proposed Medicaid and indigent care Sawgrass has received one CON in Florida with a Medicaid commitment of 87.4 percent of total resident days. Other CON applications prepared for Mr. Creekmore have offered to meet or exceed the prevailing community Medicaid occupancy levels. Woodlands committed to providing a minimum of 63.01 percent Medicaid and 0.5 percent indigent resident days. Woodlands has reached 63 percent but not its committed level of 66 percent Medicaid in its Deland facility, although it expected to do so when final data at full occupancy becomes available for 1999. NHC's proposal includes the provision of 63.05 percent of total resident days to Medicare. AHCA has determined that NHC is not in compliance with its Medicaid commitment in two of its facilities, located in Daytona and on Merritt Island, but due to its extensive operations in Florida, NHC provides substantial Medicaid care. 408.035(1)(o) - continuum of care in multilevel system All three of the applicants plan to offer Alzheimer's hospice, respite and subacute care. Sawgrass included a 60-unit ALF on its schematic design and on its Schedule 2 for a cost of $4 million. The ALF will be connected to the nursing home by a covered entrance. Sawgrass also planned but is not constructing an ALF with its Duval County project. See Finding of Fact 45. Woodlands stated its intention to build an ALF on the same campus with the proposed nursing home in a misleading narrative on page 114 of the application, but did not include it as part of the project in either the schematics or on Schedule 2 of the CON application. At the hearing, Woodlands' witness conceded that an ALF would not be built, if at all, for several years until the nursing home proves to be financially viable and then, by a separate corporation. In addition to the services provided by the other applicants, NHC plans to offer adult day care through existing providers. Only Sawgrass meets the criterion for proposing a multilevel system of care, based on the assumption that it will build the ALF as planned. 408.035(2)(e) - consisting with plans of other state agencies responsible for providing or financing long term care All three proposals are consistent with the policies of other responsible state agencies, including the Department of Elder Affairs. Summary Comparison of Applications This case is difficult, in part, because there is not a great difference among the applicants based on any one of the criteria. In terms of location, southeast Duval has a slight advantage due to its larger population, occupancy levels, and the approved CON for St. Johns County. Woodlands promises to provide a higher quality of care than NHC and Sawgrass based on proposed staffing, but has only operated one other Florida facility, albeit a superior one. Woodlands provided less detailed information on its owner's and manager's operations of out-of-state facilities. All three applicants have what appear to be at this relatively early stage of the process, reliable funding sources and plans to operate profitably. Woodlands' construction cost and design are the most reasonable for the purposes intended, although no appreciable differences in patient room charges were demonstrated. Based on past history and current proposals, all of the applicants will provide adequate and appropriate levels of Medicaid care. Only Woodlands will also provide a small percentage of indigent care. Sawgrass, by offering to construct an ALF in conjunction with nursing home and by designating a funding source to do so, offers the greatest continuum of care in a multilevel setting. On balance, the application submitted by Woodlands is superior.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order of the Agency for Health Care Administration issue CON No. 9123 to Woodlands Extended Care, Inc. to construct a 120-bed nursing home in southeast Duval County on the conditions set forth in the application and in Findings of Fact 10 of this Recommended Order; and deny CON No. 9125 to National Healthcare Corporation, and CON No. 9126 to Sawgrass Care Center, Inc. DONE AND ENTERED this 14th day of August, 2000, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 2000. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Richard Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Robert D. Newell, Jr., Esquire Newell & Terry, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 Gerald B. Sternstein, Esquire Frank P. Rainer, Esquire Sternstein, Rainer & Clarke, P.A. 314 North Calhoun Street Tallahassee, Florida 32301-7606 Theodore E. Mack, Esquire Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: From 1968 to the present time, petitioner University Home Foundation, Inc. has owned and operated the Convalescent Center of Gainesville, a 119-bed skilled care nursing home. In early 1977, petitioner submitted an application for a certificate of need to construct and operate a new 120-bed skilled care nursing home in Gainesville, Florida. Due to the bed need projection of the 1976 Florida State Plan for Construction of Hospitals and Related Medical Facilities, petitioner submitted a revised application for an 83-bed skilled care facility. It is petitioner's intention, should a certificate of need be issued, to downgrade the present Convalescent Center of Gainesville to an intermediate care nursing facility and to build the new facility as an 83-bed skilled facility. Petitioner's revised and completed application was acknowledged by respondent effective June 3, 1977. In the latter part of October, 1976, the respondent denied an application for a certificate of need for a 91-bed nursing home in Gainesville, Florida, proposed by Hill-Guthrie Associates. This adverse determination by respondent resulted in an administrative hearing. On June 8, 1977, the Hearing Officer entered an order finding that the procedural deficiencies surrounding the timeliness of the review process on the Hill-Guthrie application should be construed as an approval of the proposal to construct the 91-bed nursing home. On July 28, 1977, respondent issued a certificate of need to Hill-Guthrie Associates. The 1975 Florida State Plan projected a bed need for Alachua County of 91. The 1976 Plan projected a need for 83 long term care beds for the year 1981. The 1977 Plan, which was not accepted by the Department of Health, Education and Welfare until July 19, 1977, calls for a long term bed need of 106 by the year 1982. These plans do not distinguish between skilled and intermediate care bed needs. Due to federal regulations, the projected need figures do not include patients under 65 years of age. Testimony at the hearing indicated that between 10 and 14 percent of patients in nursing homes are under The figures in the State Plans are derived by subtracting from the projected number of beds needed for the area's population the number of beds presently existing in the area. In this instance, Alachua County presently has three existing nursing homes with a capacity of 332 beds. The projected number of beds needed in the 1976 and 1977 Plans (83 and 106, respectively) do not take into consideration the 91 bed proposal of Hill-Guthrie Associates, for which a certificate of need was issued on July 28, 1977. If the Hill-Guthrie home is completed, Alachua County would be overbedded by eight beds under the 1976 Plan and underbedded by fifteen beds under the 1977 Plan. On June 23, 1977, the North Central Florida Health Planning Council, Inc. (HPC), which serves a sixteen county area, held a public hearing to receive comments on the petitioner's revised proposal for an 83-bed skilled care nursing home. Among the items discussed at the hearing were the effects of the Hill- Guthrie decision and the correctness of the figures contained in the State Plan. (Exhibit No. 2) The Staff of the HPC prepared a report on petitioner's application and recommended that a certificate of need be denied. The Staff Report considered the twelve criteria suggested by respondent and found that the proposal was not in conformity with plans, standards and criteria; that there are less costly alternatives to the proposed project; that the proposal would not promote cost containment; and that there was no documented need for the project. More specifically, the Staff found that the Hill-Guthrie approval for 91 beds would exceed by eight the 83 beds needed in Alachua County under the 1976 State Plan. Since Hill-Guthrie proposed construction at a cost of $11,407.00 per bed and petitioner's proposed cost was $13,614.00 per bed, the Staff determined that it would be less costly to utilize existing facilities and to construct the Hill- Guthrie Nursing Home than to build a more expensive facility that would create an overbedded situation. (Exhibit D) The HPC Project Review Committee held its hearing on July 14, 1977, and petitioner's president, Mr. Paul Allen, presented his comments in response to the Staff Report. He contested the population and bed need projections contained in the State Plan, and the Hill-Guthrie decision was discussed. The Committee voted to follow the Staff's recommendation to deny the petitioner a certificate of need. (Exhibits No. 3 and D) The HPC's Executive Committee meeting was held on July 25, 1977. Mr. Allen spoke to the committee, disagreeing with the figures contained in the State Plan and requesting the committee to vote only on his application and disregard the Hill-Guthrie proposal since a certificate of need to Hill-Guthrie had not yet been issued. Thereafter, the HPC voted to recommend to respondent denial of petitioner's application for a certificate of need for the same reasons set forth in the Staff Report. (Exhibits No. 4 and D) By letter dated August 23, 1977, respondent's administrator, Art Forehand, notified petitioner that its project proposal was not in conformity with established standards, plans and criteria. The 1976 State Plan was specifically referenced, but respondent stated that it also considered petitioner's proposal in accordance with the recently adopted 1977 State Plan (Exhibit No. 1) At the hearing, Mr. Forehand testified that his decision was based upon nonconformity with the State Plan without a detailed showing that a need existed irrespective of said Plan. The issuance of a certificate of need to Hill-Guthrie played a large role in Forehand's decision.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is recommended that the determination of the respondent Office of Community Medical Facilities to deny petitioner's application for a certificate of need to construct and operate an 83-bed skilled care nursing home in Alachua County be upheld and affirmed. Respectfully submitted and entered this 13th day of January, 1978, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Art Forehand Administrator Office of Community Medical Facilities 1323 Winewood Boulevard Tallahassee, Florida 32301 Selig I. Goldin, Esquire Post Office Box 1251 Gainesville, Florida 32602 James Mahorner, Esquire 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Americana operates 48 nursing homes in the United States, including three in Florida. It is a wholly-owned subsidiary of CENCO, Inc., a diversified, publicly-owned corporation. Americana's application for the certificate of need was approved by DHRS over the recommended denial of The South Central Florida Health Systems Council (HSA). The HSA has health planning responsibilities for a nine-county area which includes Naples (Collier County). See Sections 381.493(3)(h) and 381.494(6), Florida Statutes (1980). 1/ However, DHRS has the authority to grant or deny. See Section 381.494(7), Florida Statutes (1980). The HSA prepared the Health Systems Plan, which indicated a requirement for 95 additional nursing home beds in Collier County for 1980-81. However, the HSA apparently recommended denial based on a project review committee determination that cost of construction and the resulting charges to patients would be too high. Americana estimates cost of construction at $1.714 million. Financing is to be arranged by the parent corporation at 11 percent annual interest (estimated) . There was no evidence to indicate that excessive charges for patient care would result from these construction and financing costs. Further, Americana, through CENCO, is now seeking to finance the project with tax-exempt bonds to be issued by the Collier County Industrial Development Authority. A $3.5 million bond limit and a 120-bed facility were proposed to the Authority. If these bonds are successfully issued, mortgage interest expense would be substantially below the market rate. Petitioner contends that both the bond request and the proposed 120 beds violate the terms of the certificate of need. However, Americana demonstrated that the $3.5 million represents only a ceiling and that the original $1.7 million estimate remains an operative figure. The testimony of DHRS, the Collier County Development Council and bonding company witnesses established that none of these agencies were misled as to proposed costs. However, the continuing inflation and the questionable construction starting date necessitated a "cushion" to the original estimate. This was not shown to be improper but is, rather, a prudent measure to be taken during an inflationary period. There was no deception involved in the 120-bed facility proposed to the Collier County Development Authority. This plan calls for construction of the 95-bed approved facility with a shelled-in area to provide for future expansion. This plan was made known to the HSA and DHRS during the processing of the application and was accepted by these agencies even though separate certification of the additional 25 beds would be required. There are currently 213 extended care nursing home beds in Collier County. These are provided by Petitioner (99) and by the Gulf Drive Nursing Home (114). Both facilities are about 12 years old. In addition, there are 180 beds currently under construction. These include 120 beds at the Naples Villa, which will be available to the general public, and 60 beds at the Moorings Presbyterian. The latter will initially open its facility to the general public but will eventually restrict access to these who are residents of its affiliated congregate living community. All of these facilities are or will be licensed for skilled and intermediate care and, except for the Moorings, will offer a substantial portion of their beds to Medicare/Medicaid patients. The standard used by the HSA sets the upper limit of need for nursing home beds at 27 per 1,000 persons 65 years of age or older. This standard is used by health planning agencies throughout Florida. It results in a computed requirement for 95 additional beds in Collier County which, in the view of Respondents, supports grant of the Americana application. Petitioner points out that this standard produces a maximum figure, and that other factors must be considered in calculating actual need. Such other factors include projected area growth, utilization of existing nursing homes, the availability of alternate care facilities, any average or deficit in beds in surrounding counties, effect of competition on other facilities, and the cast to patients of the new service. The evidence established that Collier County is a rapidly growing area and one which is attracting a substantial number of new residents age 65 or older. The two existing nursing homes average about 90 percent occupancy and regularly have patients awaiting admission during the winter months. A waiting list of Medicaid applicants, which is increasing each year, is maintained by the local DHRS office. In addition, placement inquiries are frequently received by this office from outside the area but are discouraged due to the lack of assured acceptance. A significant number of patients now residing in Naples nursing homes could be cared for at other facilities such as "foster homes" if they were available. Conversely, some patients who do not require acute care must remain at the hospital due to the lack of nursing home beds. Facilities in neighboring counties are limited and offer no real alternative for Naples residents seeking nursing home care. Petitioner established that a shortage of nursing personnel in the area now exists and asserted that this shortage will become severe if Americana opens a nursing home as planned. Petitioner further contends that Americana will necessarily compete for area nurse, thus driving up wages and, ultimately, the cost of care. Americana views the shortage of nurses as a national problem and has implemented an active nurse recruitment program. It has adequately considered its staffing needs and reasonably believes it will be able to attract the necessary personnel. The evidence was inconclusive as to the impact the proposed facility would have on local wages.
Recommendation From the foregoing, it is RECOMMENDED that the Petition of Greater Naples Care Center, Inc. to revoke Certificate of Need No. 1288 be denied. DONE and ENTERED this 16th day of January, 1981, in Tallahassee, Leon County, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of January, 1981.
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
The Issue Should Petitioner's license rating have been changed from "Standard" to "Conditional" based on the allegation that Petitioner failed to properly monitor a resident with bilateral edema of the lower and upper extremities?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Agency is vested with the statutory authority under Subsection 400.021(2), Florida Statutes (2001), to license nursing homes, including the assigning of a licensure status pursuant to Section 400.102, Florida Statutes (2001). Petitioner is a licensed nursing home facility (Facility) located in Clewiston, Florida. On January 14-17, 2002, the Agency conducted an Annual Re-Certification Survey (Survey) of the Facility and determined that the Facility failed to monitor Resident 15 (the Resident), who was suffering from bilateral edema of the lower extremities. The Agency cited the Facility for one Class II deficiency described by Tag Number F224. By letter dated January 31, 2002, the Agency advised the Facility that its license rating was changed to "Conditional" effective January 17, 2002. During a follow-up survey the Agency was convinced that the deficiencies that resulted in the conditional license status had been corrected and reissued a standard license to the Facility on January 31, 2002. At the time of admission, on October 17, 2001, the Resident was 66 years old and had been diagnosed with Congestive Heart Failure, Chronic Obstructive Pulmonary Disease, with previous renal failure and electrolyte imbalance. The Resident was also receiving Pain Management for Degenerative Joint Disease. The Resident was not suffering from edema at the time of admission. The staff of the Facility and the Resident's physician, Dr. Daniel McIntire, described the Resident as being very active, a social person who was ambulatory and communicative. The Resident was constantly on the move throughout the Facility's hallways and was constantly in the Patio area to indulge in smoking. On November 1, 2001, the nurses notes indicate that the Resident had 2-3+ edema to both feet and that Dr. McIntire was notified. On November 1, 2001, Dr. McIntire examined the Resident and determined that he was suffering from lower leg edema. Dr. McIntire treated the Resident's edema with a short course (40 mg once a day x 4 days) of Lasix. On November 4, 2001, the nurses notes reveal that the Resident had responded to the Lasix treatment and the Resident's edema was resolved. There is no documentation in the nurse's notes that the Resident was being monitored for edema during the period between November 4, 2001, and January 1, 2002. However, the testimony of the Director of Nursing, which I find to be credible, was that the absence of documentation did not mean that the Resident was not being monitored since only exceptions were documented. The documentation in the nurses notes reveal that on January 1, 2002, the Resident was suffering from a 2+ pitting edema in both lower extremities and both arms. Dr. McIntire was notified of the Resident's condition. Dr. McIntire placed the Resident on Lasix (40 mg once a day x 5 days). Between January 1, 2002, and January 8, 2002, there was no documentation in the clinical record of monitoring for the edema or for the effectiveness of the diuretic, Lasix. On January 9, 2002, the documentation in the clinical record reveals that the Resident had generalized edema in the lower extremities and arms. Dr. McIntire was informed of the Resident's condition. Dr. McIntire ordered Keflex (an antibiotic) for the Resident and referred him to the Pain Clinic. There is no evidence that the pain suffered by the Resident was caused by the edema. On January 14, 2002, during a group meeting, the Resident advised one of the Agency's surveyors that his feet were swollen and that he was having trouble putting on his shoes. The Resident stated that he had no pain in his feet when he walked with his walker but that his shoes did not fit. There is no documentation in nurses notes indicating that the Resident's edema was being monitored from January 9, 2002, until January 16, 2002, when Agency's surveyor advised the Facility's nurse that the Resident's feet were swollen. Upon examining the Resident, the nurse determined that the Resident had bilateral edema of his lower legs and feet and right lower arm. On January 16, 2002, the nurse notified Dr. McIntire that the Resident was suffering from edema. Dr. McIntire placed the Resident on Lasix (20 mg once a day x 5). The Nurses notes of January 17, 2002, revealed that Dr. McIntire increased the dosage of Lasix for the Resident to 40 mg once a day x 3 days. Dr. McIntire visited the Facility regularly, between November 4, 2001, and January 1, 2002, and encountered the Resident on a regular basis during those visits. Dr. McIntire did not observe the Resident suffering from any further edema between November 4, 2001, and January 1, 2002. Although the Resident gained considerable weight during his period of stay at the Facility, there is no evidence that his weight gain was the result of the edema. In fact, the Resident's weight gain was most likely the result of his poor eating habits. The Resident was constantly eating snacks in addition to his regular meals. Although there is a lack documentation that the nurses or Dr. McIntire was monitoring the Resident's edema during his stay at the Facility, there is sufficient evidence to establish facts to show that the Facility was monitoring the Resident's edema throughout his stay in the Facility. Other than his comment to the survey member on January 14, 2002, concerning his swollen feet, the Resident made no complaint concerning his feet being swollen to the point that he could not put on his shoes or that the edema was causing him any pain.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency enter a final order rescinding the conditional licensure status issued to the Facility on January 17, 2002, and reinstate the standard licensure status for the period in question. DONE AND ENTERED this 9th day of September, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 9th day of September, 2002. COPIES FURNISHED: R. Bruce McKibben, Jr., Esquire R. Bruce McKibben, P.A. 1435 East Piedmont Drive Suite 214 Tallahassee, Florida 32308 Gerald L. Pickett, Esquire Agency for Health Care Administration 525 Mirror Lake Drive, North Sebring Building Suite 310H St. Petersburg, Florida 33701 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
