Findings Of Fact During the months of June and July, 1987, Respondent Convalescent Services of Venice, Inc., operated Pinebrook Place Health Care Center in Venice, Florida. On or about June 19, 1987, Rev. Spittal, then the licensed Administrator of the facility, submitted his emergency resignation in order to assume administration of another facility to which he was obligated to give guidance. He immediately notified the Regional Director of the Respondent corporation, Mr. Rick Winkler, who was himself a licensed health care administrator in Florida. As Regional Director, with the responsibility for supervising five nursing homes and one retirement center, Mr. Winkler had his office in the Pinebrook Place facility. Mr. Winkler's license was physically located at Respondent corporation's other facility, Lakeside Nursing Home in Naples, Florida. Mr. Winkler had been the Administrator of that facility prior to becoming Regional Director, and because the incumbent administrator, Ms. Harnish, was newly licensed, and because an administrator in training, Ms. Cox, was undergoing training at that facility, he left his license at the Lakeside facility when he moved to Pinebrook to become Regional Director. Upon the departure of Rev. Spittal, Mr. Winkler immediately assumed administration of the Pinebrook facility, fulfilling all the functions of the administrator and advising the staff that he had done so. In addition, he immediately entered into a contract with Ms. Joyce A. Coleman, a licensed nursing home administrator, to assume the position of Administrator of Pinebrook Place effective July 13, 1987. Thereafter, between Rev. Spittal's departure on June 19 and Ms. Coleman's arrival on July 13, 1987, Mr. Winkler was the Administrator of Pinebrook Place Health Care Center. A licensed assistant administrator was not employed at Pinebrook during that period. On June 30, 1987, Mr. Dowless, an investigator for HRS Office of Licensure and Certification, pursuant to a report filed by a discharged former employee at Pinebrook, visited the facility to determine if the allegation made that Pinebrook was operating without a licensed administrator was true. That day in question, Mr. Winkler was absent from the facility attending the opening of the Respondent corporation's newest facility. When Mr. Dowless arrived he spoke with the acting Administrator In Charge, the chief nurse to whom Mr. Winkler supposedly gave a letter of authority in writing to assume supervision in his absence, and after an inspection of the facility, concluded that the Respondent corporation was in violation of the law. This was because Mr. Winkler, though a licensed nursing home administrator, had his license physically located at Lakeside and he failed to have an Assistant Administrator under his supervision at the Pinebrook facility. This information was telephonically reported to Mr. Winkler who called Mr. Dowless by telephone later that day. The discussion was somewhat heated. Because he was unable to convince Mr. Dowless of the fact that he was the administrator at that facility, Mr. Winkler placed a telephone call to Mr. Richard Reysen, a Deputy Director of the Office of Licensure and Certification. During this conversation, Mr. Winkler explained his licensure situation and was led to believe that the situation was acceptable so long as he would have his license physically removed from Lakeside to Pinebrook. He did this and took no further action. Considering the matter closed, he was somewhat surprised when a citation was subsequently issued by Petitioner levying a fine of $1300. The fine was $100 per day for each day of the alleged violation.
Recommendation Based on the foregoing findings of fact and conclusions of laws it is therefore: RECOMMENDED that the Administrative Complaint filed in this case against the Respondent, Convalescent Services of Venice, Inc. d/b/a Pinebrook Place Health Care Center be DISMISSED. RECOMMENDED in Tallahassee this 16th day of June, 1988. ARNOLD H. POLLOCK 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 16th day of June, 1988. APPENDIX TO RECOMMENDED ORDER 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. By the Petitioner 1 - 2. Accepted. Accepted and incorporated herein. Irrelevant. Respondent is not cited for this alleged violation. Accepted and incorporated herein. 6 - 10. Accepted and incorporated herein. 11. Irrelevant. 12 - 13. Accepted and incorporated herein. By the Respondent Accepted and incorporated herein. Accepted and incorporated herein. Accepted and Incorporated herein. 4 - 5. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as a synopsis of testimony, not a finding of fact. Irrelevant. COPIES FURNISHED: ANTHONY DELUCCIA, ESQUIRE DISTRICT VIII LEGAL COUNSEL P. O. BOX 06085, SUITE 110 FT. MYERS, FLORIDA 33906 R. BRUCE MCKIBBEN, JR., ESQUIRE P. O. BOX 10651 TALLAHASSEE, FLORIDA 32302 GREGORY L. COLER, SECRETARY DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BOULEVARD TALLAHASSEE, FLORIDA 32399-0700 R. S. POWER, AGENCY CLERK DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BOULEVARD TALLAHASSEE, FLORIDA 32399-0700
Findings Of Fact The Rule The full text of the proposed rule, as changed by the Notice of Change filed with the Department of State, is as follows: 59A-4.128 Evaluation of nursing homes and rating system. The agency shall, at least every 15 months, evaluate and assign a rating to every nursing home facility. The evaluation and rating shall be based on the facility's comp- liance with the requirements contained in sections 59A-4.100 through 59A-4.128, of this rule, Chapter 400, Part II and the require- ments contained in the regulations adopted under the Omnibus Budget Reconciliation Act (OBRA) of 1987 (Pub. L. No. 100-203) (December 22, 1987), Title IV (Medicare, Medi- caid, and Other Health Related Programs), Sub- title C (Nursing Home Reform), as amended and incorporated by reference. The evaluation shall be based on the most recent licensure survey report, investigations conducted by AHCA and those persons authorized to inspect nursing homes under Chapter 400, Part II, Florida Statutes. The rating assigned to the nursing home facility will be either conditional, standard or superior. The rating is based on the compliance with the standards contained in this rule and the standards contained in the OBRA regulations. Non-compliance will be stated as deficiencies measured in terms of severity. For rating purposes, the following deficiencies are considered equal in severity: Class I deficiencies; Class II deficiencies; and those Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy. Further for rating purposes, the following defici- encies are considered equal in severity: Class III deficiencies; and those Substand- ard Quality of Care deficiencies which con- stitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm. Class I deficiencies are those with either an imminent danger, a substantial probability of death or serious physical harm and require immediate correction. Class II deficiencies are those deficiencies that present an immediate threat to the health, safety, or security of the residents of the facility and the AHCA establishes a fixed period of time for the elimination and correction of the deficiency. Substandard Quality of Care deficiencies are deficiencies which constitute either: immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immedi- ate jeopardy; or a widespread potential for more than minimal harm, but less than immedi- ate jeopardy, with no actual harm. Class III deficiencies are those which present an indirect or potential relationship to the health, safety, or security of the nursing home facility residents, other than Class I or Class II deficiencies. A conditional rating shall be assigned to the facility: if at the time of relicensure survey, the facility has one or more of the following deficiencies: Class I; Class II; or Substan- dard Quality of Care deficiencies which con- stitute either immediate jeopardy to resident health or safety or a pattern of or wide- spread actual harm that is not immediate jeopardy; or, if at the time of the relicensure survey, the facility has Class III deficiencies, or Substandard Quality of Care deficiencies which constitute a widespread potential for more than minimal harm to resi- dent health or safety, but less than immedi- ate jeopardy, with no actual harm and at the time of the follow-up survey, such defici- encies are not substantially corrected with- in the time frame specified by the agency and continue to exist, or, new class I or class II deficiencies or Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy are found at the time of the follow- up survey. A facility receiving a conditional rating at the time of the relicensure survey shall be eligible for a standard rating if: all Class I deficiencies, Class II deficiencies, and those Substandard Quality of Care deficiencies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy are corrected within the time frame established by the AHCA and All class III deficiencies and and (sic) those Substandard Quality of Care deficiencies which constitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm are substantially corrected at the time of the follow-up survey. A facility receiving a conditional rating at the time of the relicen- sure survey shall not be eligible for a superior rating until the next relicensure survey. A standard rating shall be assigned to a facility, if at the time of the relicen- sure survey, the facility has: No class I or class II deficiencies and no Substandard Quality of care defici- encies which constitute either immediate jeopardy to resident health or safety or a pattern of or widespread actual harm that is not immediate jeopardy, and Corrects all class III deficiencies and those Substandard Quality of Care deficiencies which constitute a widespread potential for more than minimal harm to resident health or safety, but less than immediate jeopardy, with no actual harm with- in the time frame established by the AHCA. A superior rating shall be assigned to a facility, if at the time of the relicen- sure survey, the facility has received a standard rating and meets criteria for a superior rating through enhanced programs and services as contained in (7) of this section. In order to qualify for a superior rating, the nursing facility must provide initiatives or services which encompass the following areas: Nursing services. Dietary or nutritional services. Physical environment. Housekeeping and maintenance. Restorative therapies and self help activities. Social Services. Activities and recreational therapy. In order to facilitate the development of facility wide initiatives and promote creativity, these areas may be grouped or addressed individually. In establishing the facility's qualification for a superior rating, the AHCA survey team will use the Rating Survey and Scoring Sheet, Form No AHCA 3110- 6007, June, 1995, incorporated by reference, and may be obtained from the Agency for Health Care Administration. Upon initial licensure, a licensee can receive no higher than a standard license. After six months of operation, the new licensee may request that the agency evalu- ate the facility to make a determination as to the degree of compliance with minimum requirements under Chapter 400, Part II, F.S., and this rule to determine if the facility can be assigned a higher rating. Nursing facilities will be surveyed on this section of the rule beginning March 1, 1995. Petitioner's Exhibit No. 3. The "specific authority" given for the rule by the agency is Section 400.23, Florida Statutes. The rule implements Sections 400.12, 400.19 and 400.23, Florida Statutes. The Parties Florida Health Care Association, Inc., is a trade association. Its members are Florida nursing homes and it represents the great majority of nursing homes in the state. The Agency for Health Care Administration is the licensing agency of the State of Florida responsible for regulating nursing homes under Part II of Chapter 400, Florida Statutes. Florida Unique Among the 50 States Federal regulations do not require the rating of nursing homes. As one might expect, therefore, states typically do not rate nursing homes. In fact, of the fifty states, Florida is the only state that rates nursing homes. Statutory Requirement for Nursing Home Rules Section 400.23, Florida Statutes, mandates the Agency, "in consultation with the Department of Health and Rehabilitative Services and the Department of Elderly Affairs, [to] adopt and enforce rules to implement," Part II of Chapter 400. Rules to be adopted by the Agency with regard to nursing homes "include reasonable and fair criteria in relation to ... the care, treatment, and maintenance of residents and measurement of the quality and adequacy thereof, based on rules developed under [Chapter 400, Part II, Florida Statutes,] and [OBRA,] the Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 100-203) (December 22, 1987), Title IV (Medicare, Medicaid, and Other Health-Related Programs), Subtitle C (Nursing Home Reform), as amended." (e.s.) Section 400.23, Florida Statutes. The Statutory Framework for the Evaluation and Rating of Florida Nursing Homes The Agency is not mandated just to adopt rules for measuring the quality and adequacy of the care, treatment and maintenance of nursing home residents. The Agency is also mandated to evaluate and rate the state's nursing homes. Section 400.23(8), F.S. Presumably, this rating process is intended to promote improvement of nursing homes, to enhance quality and adequacy of care of residents and to aid in selection of nursing homes by potential residents and their families. In any event, the Agency is required, "at least every 15 months, [to] evaluate all nursing home facilities and make a determination as to the degree of compliance by each licensee with the established rules ... as a basis for assigning a rating to that facility." Id. The various ratings Taking into consideration the most recent inspection report and other material deemed pertinent by statute, the Agency must assign one of three ratings to a nursing home under evaluation: standard, conditional or superior. A standard rating means, that a facility has no class I or class II deficiencies, has corrected all class III deficiencies within the time established by the agency, and is in substantial compliance at the time of the survey with criteria established under this part, with [agency rules] ... , and, if applicable, with rules adopted under [OBRA] ... as amended. (e.s.) Section 400.23(8)(a), F.S. A conditional rating means, that a facility, due to the presence of one or more class I or class II deficiencies, or class III deficiencies not corrected within the time established by the agency, is not in substantial compliance at the time of the survey with criteria established under this part, [agency rules] ..., or, if applicable with rules adopted under [OBRA] ... as amended. ... (e.s.) Section 400.23(8)(b), F.S. A superior rating means that a facility meets the criteria for a standard rating and exceeds those criteria through enhanced programs and services in seven areas: 1. nursing service; 2. dietary or nutritional services; 3. physical environment; 4. housekeeping and maintenance; 5. restorative therapies and self-help activities; 6. social services; and, 7. activities and recreational therapy, (the "seven statutory areas of enhancement.") Section 400.23(8)(c), F.S. In order to achieve a superior rating, a facility may group the seven areas of enhancement within single programs or address each individually. If a facility chooses to group any within a program or initiative, however, the facility will not qualify for a superior rating "if fewer than three programs or initiatives are developed to encompass the required areas." Section 400.23(8)(d), F.S. ii. Rules with regard to Ratings. The Agency is responsible for establishing the rules under which most of the evaluation and rating process takes place. The Agency was charged with establishing uniform procedures by January 1, 1994, for evaluating nursing homes including the provision of criteria in the seven statutory areas of enhancement. Section 400.23(8)(h), F.S. Under the proposed rules, the rating is tied to classification of deficiencies, which must be "according to the nature of the deficiency." Section 400.23(9), F.S. OBRA Regulations and their Applicability Compliance by a nursing home with OBRA regulation, if applicable, is part of the evaluation of nursing homes and is one aspect used to determine which rating, (conditional, standard or superior,) is to be given a nursing home. Section 400.32(8)(a),(b) and (c), F.S. Effective July 1, 1995, the U.S. Department of Health and Human Services amended its rules regarding the survey, Medicare-certification and enforcement of regulations for nursing homes. The new rules implemented certain provisions of the federal Omnibus Budget Reconciliation Act of 1987 ("OBRA '87,") as amended. Changes were thereby made in the process of surveying skilled nursing facilities under Medicare and nursing facilities under Medicaid and in the process for certifying that such facilities meet the federal requirements for participation in Medicare and Medicaid programs. The agency considers federal OBRA regulations in place after the amendments made under OBRA 87 to be applicable, including those adopted with an effective date of July 1, 1995. No evidence was introduced in this proceeding to contradict the agency's opinion that OBRA regulations are applicable to Florida nursing home ratings and evaluations. The OBRA regulations effective in July of 1995 include a "matrix" made up of twelve boxes. The matrix, to be referred to in determining whether a nursing home is in "substantial compliance" with federal regulations and whether a deficiency constitutes "substandard quality of care," or not, was published by the federal Health Care Financing Administration in the Department of Health and Human Services as a pamphlet entitled "Public Reference Guide." The pamphlet states as part of its "Background" section, "[t]his regulation becomes effective on July 1, 1995. The matrix (see Appendix "B", a copy of the matrix admitted into evidence as Petitioner's Exhibit No. 1) contains four levels of severity of federal deficiencies in bands stacked horizontally one on top of the other, described in descending order to the left of the matrix: "Immediate Jeopardy to Resident Health or Safety"; "Actual Harm that is not Immediate Jeopardy",; "No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy"; and, "No Actual Harm with Potential for More than Minimal Harm". The matrix is divided into three columns at its base describing the scope of the deficiency in ascending order from left to right: "Isolated," "Pattern," and "Widespread." The intersections of the four bands of severity and the three columns of scope produce the twelve boxes. The boxes are labeled "A" through "L." The A box, the least intense in severity, is denominated "No Actual Harm with Potential for Minimal Harm" and is the most confined in scope, that is, "Isolated." The antipode of the "A" box is the "L" box, where severity is most intense, denominated "Immediate Jeopardy to Resident Health and Safety," and scope is the broadest, that is, "Widespread." The pamphlet is coded to indicate deficiencies which do not defeat substantial compliance. These are all the deficiencies which fall into the A, B and C boxes; that is, the least severe deficiencies no matter what their scope. Deficiencies falling into the remainder of the boxes indicate a facility's failure to achieve substantial compliance. The pamphlet is also coded to indicate deficiencies which constitute substandard quality of care. These are all of the categories of most severe deficiencies, ("Immediate Jeopardy to Resident Health or Safety"), that is, the J, K and L boxes; the two of the next most severe category of deficiencies, ("Actual Harm that is not Immediate Jeopardy") that are broadest in scope, ("Pattern" and "Widespread"), that is, the H and I boxes; the broadest in scope ("Widespread") of the third level in descending order of categories of severity, ("No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy,") that is, the F box; and none of the least severe category of deficiencies. Left as not indicating substandard quality of care are deficiencies which fall into Boxes A through E and Box G. One would be disappointed if holding the expectation that deficiencies which would indicate a facility culpable of substandard of care would be divided somewhere neatly in the progression from the A box to the L box so that every box lettered higher in the alphabet and above this division would contain deficiencies constituting substandard care and every box below this line and lower in the alphabet would contain deficiencies not constituting substandard care. This is because the expectation fails with the F and G boxes. Every box higher than G, (H through L) contain categories of deficiencies constituting substandard of care and every box lower than F, (A through E,) contain categories free of substandard of care. But there is a reversal when it comes to the F and G boxes. The G box, with the next to the most intense severity, ("Actual Harm that is not Immediate Jeopardy") and the narrowest scope, ("Isolated,") does not contain deficiencies constituting substandard quality of care. In contrast, deficiencies which fall into the F box, a box with lower severity than the G box, that is, the next to the least intense severity, ("No Actual Harm with Potential for More than Minimal Harm that is not Immediate Jeopardy,") do indicate substandard quality of care because the scope of the F box is the greatest, that is, "widespread." The code "key," which appears in the federal pamphlet and is part of the federal regulation, appears just below the matrix on the pamphlet. With regard to any box coded as "substandard quality of care," the key contains the following stipulation: Substandard quality of care: any deficiency in s. 483.13, Resident Behavior and facility Practices, s. 483.15 Quality of Life, or in S. 483.25, Quality of Care that constitutes: [deficiencies that fall in the F box, or boxes H through L.] Respondent's Exhibit No. 2. The Challenge to the Proposed Rule The Association's challenge to the proposed rule has two parts: the first is to the text of the rule; the second, to Form No. AHCA 3110-6007, a "superior rating" form incorporated into the rule by reference. The Text Omission of Federal Limitations The proposed rule contains definitions of Class I, II and III deficiencies as well as definitions of "substandard quality of care" deficiencies. The definitions of the Class I, II and III deficiencies come directly from Section 400.23 of the Florida Statutes. In contrast, the definition of "substandard quality of care" deficiencies, while established by regulations adopted under the Omnibus Reconciliation Act (OBRA) of 1987 (Pub. L. No. 100-203), as discussed above, are not the same in the proposed rule as in the federal regulations. This is because the federal regulations limit the definition in ways the proposed rule does not. The federal regulations furnish the following definition: Substandard Quality of Care means one or more deficiencies related to participation require- ments under [s.] 483.13, Resident behavior and facility practices, [s.] 483.15, Quality of life, or [s.] 483.25, Quality of care of this chapter, which constitute either immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm. 42 CFR 488.301. This provision of OBRA regulation limits the definition of "substandard quality of care," to deficiencies related to participation requirements under three sections of Chapter 42 in the Code of Federal Regulations: s. 483.13, governing resident behavior and facility practices; s. 483.15, governing quality of life; and s. 483.25, governing quality of care. The proposed rule, by comparison, defines "Substandard Quality of Care" deficiencies as those which constitute either: "immediate jeopardy to resident health or safety; a pattern of or widespread actual harm that is not immediate jeopardy; or a widespread potential for more than minimal harm, but less than immediate jeopardy, with no actual harm." Petitioner's Ex. No. 3, p. Unlike the federal regulations, the proposed rule does not limit the definition to deficiencies related to participation requirements under the three sections enumerated in the section defining "substandard quality of care," 42 CFR 488.301. It was the agency's intent that the proposed rule follow the definition of the federal regulations precisely. Nonetheless, the agency omitted from the proposed rule the limitations present in the federal regulations. The omission was attributed by the agency to oversight on its part. In the view of the agency, the absence in the proposed rule of the federal regulations' limitations makes the proposed rule "incomplete." (Tr. 339.) Lack of Definitions in OBRA Regulations The OBRA regulations do not define the terms used to describe scope: "isolated," "pattern," or "widespread." Neither do the statute or the proposed rule. With regard to severity, the term "immediate jeopardy" is defined in the OBRA regulations, but the terms "actual harm" and "minimal harm" are not defined. The terms "actual harm" and "minimal harm" are not defined by statute or the proposed rule. The lack of definitions creates a problem among surveyors. Left to themselves, surveyors define the terms differently. Differences as to definitions are found even among surveyors on the same agency survey team. Superior Rating with Substandard Quality of Care Deficiencies assigned the next to the lowest severity but the broadest scope, that is, those that fall into the F box, are considered substandard quality of care under the OBRA regulations and the proposed rule. Nonetheless, these deficiencies are equated with Class III deficiencies. A facility found to have rendered substandard quality of care equated with a Class III deficiency, therefore, is eligible still to receive a superior rating provided the deficiencies are corrected in a timely fashion. At present, under current law without the proposed rule being effective, it is possible for the most severe OBRA deficiencies to be classified by the state as Class I, II or III deficiencies. The proposed rule would change that so that the most severe OBRA deficiencies would not be classified as Class III deficiencies. Aside from any requirement of the statute, the agency's rationale for using the OBRA regulations with regard to substandard quality of care was to ensure that facilities which are found to be providing substandard quality of care not receive a superior rating. The Superior Rating Form The Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007, (the "Superior Rating Form) used by agency surveyors since March 1, 1995, opens with a section of instructions to the agency's surveyors to be used in making the determination as to whether a nursing home should be rated "superior." In observance of the statute, the instructions caution the surveyors that a superior rating survey is to be conducted only on facilities which have achieved "a standard rating at the time of the relicensure survey." The instructions go on to state: Florida law provides that a superior rating may only be awarded to a facility that exceeds the criteria for a standard rating in the following areas: Nursing services. Dietary or nutritional services. Physical environment. Housekeeping and maintenance. Restorative therapies and self help activities. Social services. Activities and recreational therapy. Petitioner's Ex. No. 6. The instructions then state, "[a] facility will be deemed to have met the statutory requirements if it attains the score necessary for a superior rating under this survey instrument." Id. After further instructions, the form is divided into six sections, four of which are to be completed by the surveyor and two of which are to be completed by the facility. The two to be completed by the facility are titled, "Consumer Satisfaction Survey," and "Staffing Characteristics." Id. The remaining four (those to be completed by the surveyors) call for descriptions of: 1. the resident population; 2. any quality improvement programs; 3. training not required by regulation to staff; and, 4. types of adjunct or specialty positions consistently used to provide improved resident care. Scored Sections Of the six sections to be filled out by the surveyor or the facility, four are scored to determine whether a superior rating should be assigned. The four are "quality improvement," "training," "resident care," and "staffing characteristics." Each demands a minimum number of points in order for the facility to receive a superior rating. "Quality improvement" demands 14 points, "training" 5, "resident care" 16, and "staffing characteristics" 12. Staffing Characteristics As to "staffing characteristics," the section of the form awards points for the years of experience of various key personnel at the facility. Points are also awarded for the number of years those individuals who occupy key staff positions have been employed by the facility. Points are awarded neither on the basis of ability of staff nor for adequate performance. The staffing section is the one scored section completed by the facility rather than the surveyors. After completion, the information filled in by the facility is not reviewed by the agency. While common sense advances a nexus between longevity of service and quality of service, no hard data was presented that longevity of service of key staff members plays a role in a facility's ability to provide superior service. Furthermore, the form provides for points to be assigned for the credentials of the staff members but neither the form nor the rule identify which credentials should yield points. The agency has such a list of credentials but neither the form nor the rule makes reference to the list. Agency surveyors do not confirm or question the information the facility provides in the "staffing characteristics" section of the form. The other scored sections With regard to the other three scored sections of the form, most of the information and scoring relate to the seven areas of enhanced programs and services the statute lists as necessary to qualify for a superior rating. For example, under Section III., the "Quality Improvement" section, points are awarded for active involvement in the quality improvement program of the following department/disciplines: nursing, rehabilitative services, dietary, housekeeping, maintenance, activities, social services and administration/medical staff. These department/disciplines all relate to at least one of the seven statutory areas of disciplines. Involvement of the nursing staff in a quality improvement program, for example, clearly relates to enhanced services in the area of "nursing services." Likewise, the same may be said for involvement of housekeeping and maintenance in the quality improvement program vis-a-vis the statutory area of housekeeping and maintenance. Other areas of scoring, however, do not relate as directly to one of the seven statutory areas of enhancement. Under Section III., "Quality Improvement," for example, 2 points are awarded under the heading "Implementation plans," for each of "resolve problems identified thorough monitoring aspects of care," "resolve problems identified by consumers," and "resolve problems identified by staff and management." With regard to the resolution of problems identified by staff and management, there is nothing to connect the problems to the seven areas of enhancement. For instance, a staff member could identify a personal problem with a supervisor, the resolution of which would have no impact on enhancement in any of the seven statutory areas. This shortcoming of the Superior Rating Form, (lack of nexus, with regard to achievement of points, between scored information and the seven areas of enhancement, appears throughout the scored sections.) In sum, it is difficult to know for certain that when points are awarded in every instance there will be a relationship with one of the seven statutory areas of enhancement. At the same time, at least one of the areas of enhancement appears to be shortchanged in the form. The only place "physical environment" enhancement is awarded points is under Section V., "Resident Care," and then only when "the facility has enhanced the physical environment to meet the extraordinary needs of special population residents." Id., p. 7. Yet, the listing of "physical environment," in the statute as one of the seven areas of enhancement does not limit the applicability of the area to any segment of the resident population. "Physical environment," is an area of enhancement applicable without limitation to the entire resident population of a nursing home. Nor does there appear to be much in the Superior Rating Form that relates directly to the statutory area of enhancement, "Restorative therapies and self-help activities." The difficulty in relating the scored categories of the form to the seven statutory areas of enhancement sets up the possibility for a nursing home to receive a superior rating when it does not deserve one because it does not exceed the criteria for a standard rating through enhanced programs and services in all seven areas. The form also requires a minimum of 14, 5, 16 and 12 points in the form's scoring categories of "Quality Improvement," "Training," "Resident Care," and "Staffing Characteristics," respectively. These minimums set up the possibility that a nursing home deserves a superior rating and yet will not receive one because, although it has enhanced programs and services in all seven areas, it may still not receive enough points as required by the form. This is true particularly if it does not receive the minimum number of points, (twelve,) under "staffing characteristics." In such a case, a facility could have enhancements in all seven areas, yet be defeated because of key personnel not having been in the facility's employ long enough. AHCA Use of an Unpromulgated Rule With the exception of the agency's use of the Superior Rating Form, there was no evidence offered at hearing that AHCA is using an unpromulgated rule to evaluate and rate nursing homes.
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
The Issue The issue in this proceeding is whether DHRS should approve the application for certificate of need of any one or more of the January, 1987, applicants for community nursing home beds in Hillsborough County. STIPULATIONS The parties stipulated to the following facts: All applicants timely filed their respective letters of intent, applications and omission responses with DHRS and the appropriate local health council for the January, 1987, batching cycle. The petitioners each timely filed a petition requesting a Section 120.57(1) hearing and have standing in this proceeding. The parties agree the Division of Administrative Hearings has jurisdiction over this matter and the parties. The CON application content requirements of Section 381.494, Florida Statutes (1985), apply as that was the statute in effect at the time the applications were filed. The review criteria in Section 381.705(1) and (2), Florida Statutes (1987), apply to this proceeding. The following statutory criteria have been met orare not applicable in this proceeding: Section 381.705(1)(d), (f), (g), (j) and (k) and all of Section 381.705(2), Florida Statutes (1987). Except for the effects the project will have on clinical needs of health professional training programs, the extent to which services will be accessible to schools for health professionals and the availability of alternative uses of such resources for the provision of other health services, Section 381.705(1)(h) is in dispute and remains to be litigated.
Findings Of Fact SUMMARY DESCRIPTION OF THE PARTIES. HCR's application (CON Action No. 5000) is to construct a 120-bed nursing home consisting of 40,000 square feet at a cost of $3,964,000.00, or $33,033 per bed (including adult day care; $32,1127 when the cost for day care is excluded.) The HCR application describes special programs and services for Alzheimer's Disease and related disorder patients in a distinct special care unit and an Alzheimer's day care center, both Identified in the plans submitted by HCR showing special design elements. HCR also proposes to offer sub-acute care and respite care. The HCR nursing home will have 2.08 (120/57.6) patients per staff, which includes the assistant director of nursing and occupational therapy and recreational therapy aides listed by HCR in its application. FCP submitted an application for 30 nursing home beds to be constructed as a part of a retirement facility (CON Action NO. 4993). The 30 beds will comprise approximately 17,558 square feet at a cost of $1,549,599.00, or $51,653 per bed. The Florida Country Place application proposes a patient staff ratio of approximately 2.3 (30/13). Palm Court submitted an application for a 60-bed addition to its existing 120-bed facility (CON Action No. 4987). The 60-bed addition would consist of 15,260 square feet at a cost of $1,472,435.00, or $24,571 per bed. The Palm Court facility is located in Plant City in the far eastern portion of Hillsborough County, near the Polk County line. Palm Court proposed a ratio of 2.31 (60/26) patients per nursing staff. Manor Care submitted an application (CON Action No. 5006) to add 60 beds to an approved certificate of need for 60-beds for which construction has not yet begun. The area to be added would consist of 19,000 square feet at a cost of $2,187,045.00, or $36,451 per bed. The Manor Care addition would include a distinct special care unit for Alzheimer's Disease and related disorder victims and the 60-bed addition would provide a patient staff ratio of 1.98 (60/30.3), which includes a half-time physical therapy aide, a half-time recreational therapy assistant and an assistant director of nursing. Forum submitted an application (CON Action No. 4999) to construct a 120-bed nursing home as a part of a retirement complex. The nursing home element will consist of 49,283 square feet at a cost of $5,053,301.00, or $42,111 per bed. Forum proposes a staffing ratio of 3.0 patients per staff FTE. Forum proposed to provide respite care and hospice care, and adult day care and meals on wheels during or after the second year of operation. HHL submitted an application (CON Action No. 4978) for 120-bed nursing home consisting of 37,700 square feet at a cost of $3,900,000.00, or $32,500 per bed. The HHL facility proposes 2.27 (120/52.8) patients per staff, which includes the rehabilitation assistants and the assistant director of nursing listed by HHL. HHL proposes sub-acute care, respite care, programs for Alzheimer's Disease victims (but not a distinct special care unit) and an Alzheimer's adult day care program of from four to six patients. Cypress submitted an application (CON Action No. 5004) to construct a 60-bed nursing home in Sun City Center in southeastern Hillsborough County. The nursing home described in the application would contain 24,069 square feet at a cost of $2,125,000.00, or $35,419 per bed. But Cypress' estimated construction cost per square foot of $49.81 does not account for inflation and is unreasonably low. Median cost of nursing home construction in Florida is $55 per square foot. It is estimated that Cypress' construction cost estimate is 10-15 percent too low. Assuming that the cost estimate is 12.5 percent too low, the cost of construction would increase to approximately $2,274.485 or $37,914 per bed. Cypress did not detail any special programs in its application and proposed 2.45 (60/24.5) patients per staff. However, this ratio is questionable in view of the confusion surrounding Cypress' evidence regarding staffing and the apparent inaccuracy of the staffing presented by the application. DHRS is the state agency that preliminarily reviewed and passed on the applications and is responsible for final agency action on them. DHRS PRELIMINARY REVIEW AND ACTION. HCR, FCP, Palm Court, Manor Care, Forum, HHL, Cypress, and others filed their applications for community nursing home bed certificates of need for Hillsborough County in the January, 1987, batching cycle. On June 18, 1987, DHRS issued its State Agency Action Report (SAAR), in which it denied all of the applications except HCR's, FCP's and VHA/Oxford's (for 120 beds). Review of the SAAR in light of the evidence introduced at the final hearing indicates that DHRS erred in reviewing the applications in at least the following respects: Manor Care. -- The SAAR indicates that DHRS was not cognizant that Manor Care had a final approval for a 60-bed nursing home CON (No. 4155) to which to add the 60 beds applied for in this case, CON Action No. 5006. The SAAR was somewhat critical of the Manor Care proposal for being a two-story structure. It appears that DHRS confused the proposal to add 60-beds (CON Action No. 5006) with a parallel contingent proposal to build a new 120-bed facility (CON Action No. 5005), which Manor Care eventually withdrew during the final hearing. Actually, CON Action No. 5006, added to the approved CON No. 4155 for a new 60-bed nursing home, would result in a one-story 120-bed nursing home. On page 7 of the SAAR, DHRS indicated its understanding that Manor Care had not specified a location for its proposal. Later, on page 11, the SAAR acknowledges the true fact that Manor Care's proposed nursIng home would be located in the Northwest Hillsborough County subdistrict, which is the Local Health Plan's first priority for location of additional nursing home beds in DHRS District 6. HHL. The SAAR (p. 13) states that Convalescent Services, Inc. (CSI), the management corporation HHL and other limited partnerships for which the Kellett Brothers are the general partners, has no other nursing homes in Florida. While technically correct, Kellett limited partnerships do have other nursing homes in Florida. Staffing tables on page 17 of the SAAR are incorrect, attributing no LPNs to the HHL proposal instead of 6 and only 36 aides instead of 38. On page 18 of the SAAR, the table of patient privileges incorrectly states that the HHL applications had no patients' bill of rights. Also on page 18 of the SAAR, DHRS incorrectly omitted adult day care and community outreach from the table of programs provided by HHL. On page 26 of the SAkR, it gives HHL's private pay private room rate ($101) as its semi-private room rate (actually $69.92) The SAAR Review Matrix incorrectly omits adult day care, community outreach and sub-acute care from HHL's proposed programs and omits HHL's patients' bill of rights. Forum. -- The SAAR starts out on page 3 by misidentifying Forum as being affiliated with Hospital Corporation of America. On pages 4, 6 and 15, the SAAR incorrectly fails to recognize that a retirement living center (apartments) is part of the overall development Forum proposes. The semi-private room rate of $110 attributed to Forum's application on page 26 of the SAAR is wrong; it should have been $85. Cypress. -- The Review Matrix in the SAAR failed to identify several services and programs Cypress stated in its application that it would offer. The matrix did not recognize that Cypress would offer social activity functions within the community, would offer rehabilitation, would provide some Alzheimer's type services, (which Cypress called supportive care and mentally frail services) and physically frail services. Cypress also spoke of hospice care and respite care in its application, as well as specialized rehabilitation, physical therapy, and speech therapy. Cypress also spoke of community outreach programs, psychiatric services, home health agencies, and numerous other areas that were not recognized by DHRS in its matrix. However, there are valid reasons for some of these omissions. On May 9, 1988, the first day of the final hearing, VHA/Oxford withdrew its application. On the afternoon of May 17, 1988, DHRS announced it was supporting the grant of Palm Court's application since VHA/Oxford had withdrawn. But the only evidence to support the new DHRS position was through the testimony of Reid Jaffe, DHRS Health Services and Facilities Consultants Supervisor, who did not express a personal opinion but acted as a messsenger to relay the positions taken by others at DHRS who did not testify. NUMERIC NEED. Rule 10.5.011(1)(k), Florida Administrative Code, is a methodology for calculating net numeric need for nursing home beds. Under the methodology, gross numeric need is calculated essentially by multiplying the population of two age cohorts projected on the planning horizon by a use rate. The use rate is calculated by divIding current population by the current number of licensed beds. To obtain net need in a health planning sub-district, the methodology first prorates the gross need in the entire district, using the proportion of current licensed beds in the subdistrict to the current licensed beds in the district, and adjusts the resultant by a current occupancy rate factor (occupancy rate /0.90); then, the number of licensed beds, plus 90 percent of the number of approved beds in the subdistrict, are subtracted from the adjusted gross need in the subdistrict. With three exceptions, the parties agree on how net numeric need is calculated under the rule methodology. The parties disagree only on the current licensed bed count, the current approved bed count, and the occupancy rate at one facility that has both community nursing home beds and sheltered nursing home beds. (Sheltered nursing home beds generally are not factored into the formula.) As for the licensed bed count, the issue is whether The Home Association, a 96-bed facility in Hillsborough County, should be included as a licensed community nursing home facility or excluded as a sheltered facility. At hearing, all of the parties presenting evidence on the issue except Forum counted The Home Association's 96 beds as licensed community beds. Forum excluded The Home Association from the licensed bed count because it was not listed on the Department's Community Nursing Home Report for January 1, 1988. This same report reflects three other facilities in Hillsborough County in which the beds were formerly sheltered but as of August 1, 1987, began to be counted by the Department as community beds. Forum conceded, however, that if the Department recognizes The Home Association as a community facility, then it would be appropriate to include those beds in the licensed bed count under the rule formula. In its proposed recommended order, even Forum agrees that The Home Association beds are included in the licensed bed count. Two issues are presented relating to the inventory of approved beds under the rule formula: the date at which approved beds are to be counted; and whether the 120 beds under Careage CON #4714 and Manor Care's 60 beds under CON #4155 were approved at the pertinent time. On the first question, Forum again stands alone. In the face of a rule which is silent as to the date on which approved beds are to be counted, Forum suggests that they be counted cn the same day licensed beds are counted, December 1, 1986, for this batch. All other interested parties follow the Department's general practice of counting approved beds as of the date the State Agency Action Report for this batch was executed, June 18, 1987. Forum supports its position on the ground that use of the same date for both licensed and approved beds avoids the prospect that beds may be "lost" from the calculation if they are not licensed as of December 1, 1986, but become licensed before June 18, 1987, and therefore are no longer approved beds on that latter date. The argument is meritless. There is no evidence of any "lost" beds under this policy for this batch. Indeed, the evidence is that such beds are not lost: 120 beds at Carrollwood were licensed on December 15, 1986, after the December 1 licensed bed cut-off and before the June 18, 1987, SAAR date. These beds were included in the approved bed inventory on June 18, 1987. The Department's policy under its numeric need rule is to count approved beds as of the execution date of the SAAR. Under this policy, the need for beds in the future is predicated on the number of beds currently or soon to be available to meet the need. When more than seven months can elapse after licensed beds are counted but before the agency decision is formulated, it makes sense to count beds approved during this intervening period. A 120-bed award to Careage in the prior batch was published by DHRS in the Florida Administrative Weekly of January 23, 1987, reflecting approval on January 7, 1987. However, DHRS then received criticism.of the approval, and a new supervisor in charge initiated a second review of the circumstances and of the Careage approval. The second review did not conclude until after June 18, 1987. When it did, DHRS re- affirmed its decision to approve Careage and issued a CON for 120 beds on August 18, 1987. Although the Careage CON was issued after June 18, 1987, DHRS proved that there is a rational basis for including it in the approved bed count under these unusual circumstances. The Careage CON represents 120 beds approved in the batching cycle preceding the one at issue in this case. Counting the 120 beds as approved promotes sound health planning. The projection of net need on the planning horizon is predicated on the most accurate count of approved beds from prior batching cycles that can be anticipated to come on line in the near future. As of June 18, 1987, there were 308 other beds approved but not yet licensed in Hillsborough County. Included among these 308 approved beds are 60 beds awarded to Manor Care under CON 4155 by Stipulation dated March 30, 1987. By mistake, DHRS did not count Manor Care's 60-bed CON in the SAAR. This mistake was not discovered, and DHRS served discovery responses and took a final position on need, as required by prehearing orders, that did not count the Manor Care CON. But this mistake f fact should now be corrected, even if it could have been discovered earlier through the use of due diligence, so that the health planning decision resulting from these de novo proceedings will be predicated on the correct facts. See Gulf Court Nursing Center v. HRS, 483 So.2d 700, 712 (Fla. 1st DCA 1986). It is appropriate to include Manor Care's finally approved 60 beds in the rule formula. Adding Careage's 120 beds, the total approved bed count is 428. The final variation accounting for the differences in the parties' calculations under the formula is the manner in which the occupancy rate should be computed at John Knox Village, a facility containing both community and sheltered beds. The issue is whether the patient days in this mixed facility should be prorated between the two types of beds or whether the full patient days for both types of beds should be used in calculating the occupancy rate in the facility. There is no separate report of occupancy by bed type for this mixed facility. The number of patient days delivered in the community beds at John Knox is not known. If the patient days for the entire facility are prorated according to the percentage the community beds bear to the total number of beds, there is a necessary but wholly unsupported and speculative assumption that the proportion of patient days delivered in community beds is identical to the proportion of community beds. DHRS historically has been unwilling to make this assumption and has always included the total number of beds and patient days in mixed facilities to determine the occupancy rate under the community bed rule. The rationale supporting this policy has been appropriately explicated on the record. The use of prorated patient days to determine occupancy in mixed facilities, as suggested by DHRS for the first time at final hearing, also is a change from the position the Department took when exhibits were exchanged and the prehearing stipulation was executed and then relied on by the parties. Because the Department, as a party litigant, did not prorate in its prehearing submissions, it cannot do so at hearing in the absence of fraud, mistake of fact, or newly discovered evidence. No evidence of any such extenuating circumstances was presented. The only explanation DHRS gave for changing its treatment of the John Knox occupancy data was that more accurate recent data (using daily census data instead of first day of the month census data) furnished by the Local Health Council was prorated. But DHRS just as easily could have prorated the older, less accurate data if it had chosen to take that position at the time the parties were required to take final positions in prehearing procedures. The Department, therefore, is precluded from adopting a posture at hearing relating to the treatment of patient days in mixed facilities which is different from that reflected in the Department's prehearing stipulation and exchanged exhibits. In summary, the appropriate numeric need calculation must include The Home Association in licensed beds, count both Careage's 120-bed CON and Manor Care's 60-bed CON in the approved bed count, and use the full John Knox bed complement and patient days in determining the Hillsborough County occupancy rate. Using these factors in the rule methodology, the net need for community nursing home beds in Hillsborough County for the January, 1990, planning horizon is 231, as reflected in the calculation included in the attached Appendix To Recommended Order, Case Nos. 87-3409, etc. Rule 10-5.011(1)(k), Florida Administrative Code, provides that DHRS normally may not approve more beds than the numeric net need calculated under rule methodology. In this case, none of the circumstances specified in the rule that would justify exceeding the numeric net need were proven by the evidence. At the same time, the rule does not require DHRS to fill all, or as much as possible, of the numeric net need by attempting to "mix and match" applications to come as close as possible to the calculated number. LOCAL GEOGRAPHIC NEED PRIORITIES. The current, 1985 District VI Local Health Plan provides that, after consideration of numeric bed need under the rule need methodology, its "priority need rankings" should be considered in the competitive review for new nursing homes. Hil1sborough County, Northwest, is priority rank number one. HCR, FCP, Manor Care, Forum and HHL all propose to locate their nursing homes there. Cypress proposes to locate in Sun City Center and Palm Court is in Plant City, both in Hillsborough County, Southeast, an area ranked fifth in priority in District VI. Plant City is close to Polk County, which the Local Health Plan designates as the fourth ranked area in priority. Cypress proposes its 60-bed nursing home approximately 1/4 mile down the road from an existing nursing home called Sun Terrace, operated by CSI. Quality of care concerns have arisen due to rapid fill-up of 60 additional beds recently licensed at Sun Terrace and opened in September, 1987. See Findings of Fact 83-87, below. As a result, Sun Terrace has imposed on itself a moratorium on new admissions until quality of care concerns can be addressed. In part as a result of the moratorium, Sun Terrace's occupancy rate at the time of the final hearing was only approximately 65 percent, leaving 42 empty beds. MEDICAID NEED. One of the three major considerations for competitive review of nursing home CON applications in the Longterm Care section of the 1985-1987 State Health Plan is "resource access." Except as reflected in the priority rankings, geographic access is not an issue in this proceeding. (Priority/Policy 7 of the Local Health Plan, setting a goal of providing for nursing home services within 30 minutes travel time of 90 percent of urban residents and within 45 minutes travel time of 90 percent of rural residents, already has been achieved in District VI.) But, to address concern for financial access, Priority/Policy 2 of the Local Health Plan provides that applicants "should commit, at a minimum, to serve Medicaid eligible patients in proportion to the representation of elderly poor in the subdistrict." In Hillsborough County, Northwest, where all but two of the applicants propose to locate, the elderly poverty rate is 18.6; in Hillsborough County, Southeast, where Cypress and Pal:n Court would be located, the elderly poverty rate is 15.6 percent. The applicants propose to commit the following percentages of their nursing home beds to the care of Medicaid- 4 eligible patients: HCR, 70 percent; FCP, 70 percent; Manor Care, 30 percent; HHL, 45 percent; Palm Court, 70 percent; and Cypress, approximately 10 percent. Cypress proposed in its application to commit 10 percent of its beds for Medicaid use. It attempted to update its application to provide for a 15 percent Medicaid commitment. The update was said to have been the result of a decrease in the average age of the residents of Sun City Center, Cypress' proposed primary service area, from 73 to 70. But the percentage was calculated by first estimating 60 percent private pay and "backing down" to a Medicare percentage of 25 percent, leaving 15 percent Medicaid. The evidence was persuasive that this attempted update was not due to extrinsic factors. See Conclusions of Law 20 to 25, below. Forum has committed only to have 50 percent of its beds Medicaid- certified and to meet the requirements of Priority/Policy 2. Although Priority/Policy 2 is written as a minimum Medicaid percentage, no evidence was presented from which to determine how high a percentage of Medicaid commitment is desirable. There was, e.g., no evidence on which to find that a Medicaid percentage as high as four times the elderly poverty rate is more desirable than a percentage approximately equal to or perhaps just a bit higher than the elderly poverty rate. To the contrary, the only evidence on the subject was that DHRS does not now consider the Medicaid percentage to be as important as it was considered to be in the past and that DHRS now just checks to see that the percentage approximates the elderly poor rate in the County. NEED FOR ALZHEIMER'S DISEASE PROGRAMS. Description Of The Disease And The Need. There is a need in Hillsborough County for additional nursing home beds and services for Alzheimer's Disease and related disorder victims. There is no known nursing home in Hillsborough County which provides a distinct care unit for Alzheimer's Disease and related disorder victims. There is an estimated unmet need by Alzheimer's patients for nursing home care in Hillsborough County of approximately 1,271 by July, 1989. DHRS has recommended that "preference should be given to applicants for new nursing home beds which propose the development of special Alzheimer's units" and "greater preference should be given to units that will also provide adult day care and/or respite care." Alzheimer's Disease is a brain disorder that was discovered at the turn of the century. It primarily affects persons over the age of 60. The term "related disorders" is used because some non-Alzheimer's disorders mimic Alzheimer's Disease symptoms and create many of the same needs for specialized care. Typically, Alzheimer's Disease results in gradual memory loss and, as memory loss progresses, results in the need for ever- increasing personal care. In the earlier stages, the victim is often in reasonably good physical condition and simply exhibits signs of recent memory loss. However, as memory loss increases, various activities of daily living are disrupted. Victims encounter more serious physical problems and exhibit symptoms such as wandering, significant weight loss, clumsiness, incontinence and antisocial behavior. In the last stages of the disease, the victim requires increasingly intense medical attention, becomes totally dependent on others, and may eventually require total skilled nursing care. The intensity of care required for the Alzheimer's Disease and related disorder victim increases as the disease progresses. In early stages, the victims are typically cared for at home by a family member. The nature of care required for an Alzheimer's Disease or related disorders victim is very exhausting for the care giver. Toward the end of the first stage of the disease when the victim requires increasing supervision, the victim can be maintained longer in the home if there is available to the care giver some form of occasional rest, such as adult day care or respite care. Adult day care and respite care provide opportunities for the primary care giver to "take a break". See Findings of Fact 133 to 135, below. An Alzheimer's Disease patient usually requires inpatient nursing home care late in the second stage of the disease. If the patient is ambulatory, he often exhibits a wandering behavior. Approximately 50 percent of the Alzheimer's victims admitted to a nursing home have the potential to wander. Ultimately, Alzheimer's victims become bed-ridden and require skilled or sub- acute nursing home care, including tube feedings, cathethers, and artificial life support. Historically, ambulatory Alzheimer's patients in nursing homes have been mixed with other patients. The Alzheimer's victim has often disrupted life in the nursing home because of the victim's wandering, incontinence, confusion, and socially unacceptable behavior. Because of these characteristics, some nursing homes avoid admitting Alzheimer's patients and others control problem behavior with sedation and physical restraint. A separate Alzheimer's care unit enables the nursing home to utilize special techniques to manage the Alzheimer's disease victim and allows the victim to maintain his cognitive capabilities for as long as possible, without restraint and sedation. Nursing home patients who do not suffer from Alzheimer's and related diseases are often agitated and disrupted by the Alzheimer's patients' unacceptable social behavior. A separate unit for Alzheimer's Disease victims accommodates the needs of the non-Alzheimer's patient by eliminating unpleasant, often violent encounters between dementia victims and other patients. Distinct Alzheimer's special care units provide better care for Alzheimer's disease and related disorder victims for several reasons. A separate unit eliminates the tendency of the Alzheimer's disease patient to disrupt the remainder of the nursing home. A separate unit provides a smaller, safer, specially designed area with specially trained staff to address the unique needs of the Alzheimer's disease victim. A separate unit is preferable to mixing Alzheimer's patients with non- Alzheimer's patients. Traditional nursing home programs and activities are often inappropriate and counterproductive for the Alzheimer's patient. HCR's Proposal. The 120-bed nursing home proposed by HCR will help meet the needs in Hillsborough County for adult day care, respite care, sub-acute care and a special care unit for Alzheimer's Disease and related disorder victims. The programs and services will enable the HCR nursing home to provide at one location a complete continuum of care from the least intense level of care in adult day care to total (sub-acute) care. HCR's Alzheimer's special care unit will incorporate special design features, special patient activities and programs and higher staffing levels to meet the unique needs cf Alzheimer's disease victims. These features are intended to compensate for memory loss and provide a safe environment where cognitive capabilities can be maintained for as long as possible while patients enjoy personal freedom without the use of restraints and sedation which have typified the treatment of unmanageable Alzheimer's and dementia patients. The architectural design of the HCR nursing home will accommodate the tendency of Alzheimer's victims to wander by allowing the victims to ambulate in circular patterns through the facility and the adjacent court yard and by providing an electronic warning system to prevent inadvertent exit from the nursing home. Patient bathrooms are specially designed to avoid fright and confusion through the use of automatic lighting fixtures, appropriate coloring and distinctly shaped fixtures and waste baskets. Calming colors, color coding, carefully selected art work, special floor coverings and labeling are provided. Separate dining and activities areas enable the nursing home to provide programs and activities for Alzheimer's disease victims in a more effective and efficient manner than would be possible if the same areas also had to be used for non- Alzheimer's Disease victims. The proposed HCR nursing home includes a discreet area designed for an adult day care center, which will share some resources with the nursing home. The program will accommodate 12 persons and be operated in accordance with adult day care regulations. The physical spaces include an entry separate from the main nursing home entry, a lobby, an office, a therapeutic kitchen for use by the patients, toilet facilities, an activities center, and a lounge with an adjacent covered porch. The adult day care program will be staffed by a nurse director, an assistant and volunteers. The participants in this program will be provided with various activities of daily living in an environment developed for Alzheimer's Disease victiMs. This program is intended to provide placement for persons not yet in need of in-patient care and will provide an alternative to premature nursing home admission. Manor Care's Proposal. Manor Care proposes a dedicated 30-bed specialized unit for persons suffering from Alzheimer's disease and related disorders. In 1985, Manor Care perceived the need to treat Alzheimer's patients in a manner different than patients in the general nursing home population. Manor Care's task force of nurses, administrators, architects, and designers developed an Alzheimer's program which recognizes the special needs of the patient. Manor Care now operates 21 special dedicated Alzheimer's units throughout the country and is planning 16 additional Alzheimer's units. Manor Care's comprehensive Alzheimer's program encompasses five components: (1) environment, (2) staffing and training, (3) programming, (4) specialized medical services, and (5) family support. Environment. The proposed 30-bed Alzheimer's unit will be separate from the rest of the facility and self-contained, with its own dining room, activities room, lounge, quiet/privacy room, nurses sub-station, director's office, and outdoor courtyard. A separate dining room for Alzheimer's residents enables staff to provide individualized attention and special assistance. By providing a simple and separate dining environment, residents are no longer embarrassed by confusion and agitation displayed in the presence of non-Alzheimer's residents during mealtime. A separate lounge area is provided for families to visit with residents. In a typical nursing center, the family must visit a confused resident in the presence of other families; families of Alzheimer's residents can find this embarrassing. A separate lounge makes visitation more desirable for Alzheimer's residents and families. The quiet/privacy room can be used by families as a quiet area to visit with a family member, by residents who want to spend time alone, or by staff persons and residents for individualized programming away from the activity on the unit. The outdoor courtyard, which is enclosed and accessible to the unit through the activities room and hallway door, allows Alzheimer's residents to walk outside freely without wandering off. The Manor Care Alzheimer's unit is specially designed with features which reduce environmental stress by minimizing glare (using parabolic lenses), noise and bold patterns which increase agitation in Alzheimer's residents. Throughout the unit, a residential, uncluttered atmosphere is emphasized, using soft, contrasting colors and textures. The unit also contains visual cues to increase orientation. Furnishings are functional, durable and easy to maintain. Staffing and Training. The Alzheimer's unit has its own specialized staff including a Unit Director, Activities Director, and nursing staff. The unit is staffed at a higher "nurse to resident" ratio than the rest of the facility. Staffing patterns emphasizu continuity to ensure that residents receive individualized care. The nurses become f;i1iar with the behavior and abilities of each resident and are able to render care appropriately. Programming. The goal of programming and activities in the Alzheimer's unit is to improve the quality of life of the Alzheimer's resident. This specialized programming results in reducing the use of medications and restraints necessary to manage the Alzheimer's resident. The Manor Care Alzheimer's activity program is success-oriented; staff provide activities designed to allow Alzheimer's residents to succeed more frequently. (They usually fail when mixed in with the general nursing home population.) specialized Medical Services. The use of consultant medical specialists is an integral part of Manor Care's Alzheimer's Program. Specialists provide diagnostic and treatment services for Alzheimer's residents upon admission to the unit, and thereafter when deemed medically appropriate. Family support. Family support is another important aspect of the Manor Care Alzheimer's program. Families are very supportive of the unit's programming and have benef itted from the understanding and support available to them. The Others' Proposals. None of the other applicants propose specialized units for the care of patients with Alzheimer's disease and related disorders. Alzheimer's sufferers will be treated in an "open unit" at the HHL facility and will be placed as compatibly as possible with other residents. Although these residents will be able to intermingle with other residents, their movements will be monitored by the "wander guard" system and all doors will be equipped with buzzers connected to the nurse's stations. The HHL facility will be designed to incorporate secure courtyards and other areas where residents will be free to wander safely throughout the living areas. The facility's nursing personnel will be specially trained to provide services to Alzheimer's sufferers. The proposed HHL facility will also offer an adult Alzheimer's day care program. Although the program will be small (accommodating between four to six individuals) it will interface with the Alzheimer's program offered to the in-house residents. As with the respite program, the Alzheimer's adult day care program will give the families of Alzheimer's disease sufferers an opportunity to take a breather during the day, and the participants will benefit from the special Alzheimer's programs and activities offered. With its proposed 60-bed addition, Palm Court plans to add a program directed specifically at persons suffering from Alzheimers and related brain disorders. Currently, it does not have one. Neither FCP nor Forum make any particular provision for the care of Alzheimer's patients. FCP points out that its facilities in other states historically have cared for this special category of patient, primarily through use of high quality, thereapy-oriented programs, especially at the earlier stages of the disease. Cypress proposes to locate off of a central core: a 60-bed nursing home, offering both intermediate and skilled care, with its own recreation area and dining, serviced from the central kitchen; (2) a 20-bed assisted living unit (which Cypress also calls "supportive care") for mentally frail and physically strong individuals which has its own outdoor recreation area and dining area; and (3) another 40 assisted living beds broken into two 20-unit wings for mentally strong and physically frail individuals, with their own dining and recreation area, including outdoor recreation. The various levels of care are separate since each of the levels have different needs and methods of treatment. However, Cypress will only accept in the mentally frail, physically strong wing, Alzheimer's-type patients who are in the earlier stages of the disease. QUALITY OF CARE. Priority/Policy 9 of the 1985 Local Health Plan states: "Applicants should be evaluated as to their achievement of superior quality ratings by DHRS and other indications of quality as available." Track Record. At the time of application, three of the nursing homes operated by HCR in Florida had superior licenses and the remaining homes had standard licenses. FCP has one nursing home in Florida. It is rated standard by DHRS. None of the facilities operated by FCP's principals, the Phillipses, has ever been in receivership or had a Medicaid or Medicare certification revoked. The Phillipses have an excellent reputation in Ohio for their operation and management of nursing homes and have remained in positive standing with federal and state certification agencies. Manor Care's proposed 60-bed addition will be owned by Manor Care of Florida, Inc., a wholly-owned subsidiary of Manor HealthCare Corporation. Manor HealthCare Corporation is a publicly-held corporation which owns and operates about 130 nursing homes in various states. Manor Care owns and operates nine nursing homes and three adult congregate living facilities (ACLFs) in Florida. All nine Florida nursing homes exceed DHRS licensure standards; the majority of Manor Care's Florida facilities hold a superior license rating. Manor Care has never had a license denied, revoked, or suspended in Florida. Manor Care has opened three nursing homes in Florida in recent years. All three are superior rated. Palm Court Nursing Home has a superior license, with zero deficiencies, from DHRS' Office of Licensure and Certification with the most recent inspection having occurred between May 2 and May 4 immediately preceding the beginning of the final hearing. It is managed by National Health Corp., Murpheesboro, Tennessee. National Health Corp is an owner-operator of other facilities and either owns or operates some 19 facilities in Florida. It has managed Palm Court Nursing Home since its inception and, if the 60 bed addition is approved, will manage the addition. Forum has never had a license denied, revoked or suspended, nor had a facility placed in receivership. Forum has never had any nursing home placed in receivership at any time during its ownership, management or leasing. Forum has a history of providing quality of care and owns and operates facilities in other states which hold superior ratings. Forum has a corporate policy of seeking to attain a superior rating in those states which have such a system. Forum presently owns and operates one facility in Florida. That facility is rated standard and was acquired by Forum within the past two years. That facility, which only has 35 nursing beds, is not a prototype of what Forum proposes in this case. Seventeen (17) of the twenty-one (21) nursing homes currently managed by CSI are located in states which utilize a superior rating system. Of the facilities that are eligible to receive superior licenses, CSI maintains superior ratings in over 80 percent of its beds. CSI's Sun Terrace in Sun City Center was the subject of an extensive survey issued by the Office of Licensure and Certification, an arm of DHRS, in April, 1988, that cited numerous deficiencies in the areas of quality of care, staffing, and programs at the Sun Terrace facility. The licensure survey also cited violations of state and federal laws in the handling of controlled substances and problems with resident care plans at the facility. The findings of DHRS in its licensure survey of Sun Terrace appear to be serious matters, the resolution of which is clearly within the control of CSI. Following the opening of the second 60 beds at Sun Terrace in September, 1987, the facility experienced a shortage of nursing personnel which necessitated a greater use of agency personnel to staff the facility. The problems cited by DHRS at Sun Terrace were largely the result of the increased use of agency personnel, lack of documentation, a newly licensed administrator, and the unexpected resignation of the director of nursing. Even before the DHRS licensure survey, CSI had taken affirmative action to address the problems at Sun Terrace, including a voluntary moratorium on new admissions. In response to the recent problems at Sun Terrac, CSI has moved toward more centralized management of its facilities. CSI now requires administrators to adhere very closely to the corporate policies and procedures. Further, the addition of a second full-time nurse/consultant will double the frequency of quality of care monitoring visits at CSI facilities. The problems experienced at Sun Terrace are atypical of CSI-managed facilities. When CSI's policies and procedures are properly followed, the result is excellent nursing care and services. But the problems at Sun Terrace are examples of what can happen when an organization attempts to expand operations more rapidly than it should. In this connection, CSI has received seven CONs since July 1984. Two of the seven are preliminary approvals that have been challenged and have not yet gone to hearing. One was the 60-bed addition to Sun Terrace which is now licensed. Another is a 73-bed nursing home in Brevard County which is expected to open within the next several months, and another is a 21-bed addition project in Collier County. Cypress has never operated a nursing home and has no track record. Staffing. Staffing arrangments are important considerations in assessing the quality of care to be expected from a proposal, but there is not necessarily a proportional correlation between staffing and quality. How staffing affects quality also depends on the breadth and types of programs to be offered. For example, Alzheimer's programs and sub-acute care will require higher staffing ratios. HCR, FCP, Manor Care, Palm Court and Forum all propose staffing arrangments that meet or exceed state requirements. See Findings Of Fact 1-5, above. Cypress' application, on the other hand, leaves much to be desired in its proposed staffing. The staffing plan presented by Cypress on its Updated Table 11 fails to meet the requirements of Rule 10D-29, F.A.C. Specifically, no provision has been made for an activity director (10D-29.116), a medical director (10D-29.107), a pharmacy consultant (10D-29.112), or a medical records consultant (10D-29.118), all of which are required by rule. (Cypress attempted to explain that it would have a pharmacy consultant on contract who would bill patients separately.) Further, no provision has been made for utilization review to monitor the appropriateness of the placement of residents, as required by Rule 10D-29. Cypress' Updated Table 11 provides for LPNs of 1.5 FTEs on the first shift and night shift and 6.0 FTEs on the second shift. The second shift LPN coverage is over-staffed by 4 1/2 FTEs which will result in inefficiency. Rule 10D-29.108, F.A.C., requires staffing of nursing assistants on all shifts. The Cypress staffing plan makes no provision for nursing assistants on the second shift. In testimony, Cypress attempted to explain that Table 11 was wrong and that the second shift LPNs should have been aides. The proposes Cypress nursing home will not offer 24-hour RN coverage. The third shift has no RN coverage. Based upon the proposed staffing pattern appearing in Cypress' Updated Table 11, its proposed facililty would not qualify for licensure under Florida regulations, much less qualify for a superior rating. Cypress has not secured or identified the day-to-day management of the proposed nursing home. No medical director has been secured or identified. Quality Assurance programs. All of the applicants except Cypress have existing quality assurance (QA) programs that are adequate to assL're quality of care. From the evidence HCR's, Manor Care's, HHL's and Forum's QA programs are comparable and are the best among the applicants. Palm Court has had results comparable to or better than the others , which is itself evidence of an adequate QA program. Meanwhile, CSI, despite an evidently superior QA program, has experienced quality programs due to rapid fill-up of its 60 additiional beds at Sun Terrace. Cypress has no experience operating a nursing home. Not surprisingly, it professes to desire quality and to plan to implement stringent QA programs. But its plans at this stage are not as developed and detailed as the existing QA programs being used by the other applicants at other facilities. Other Factors. Whether Therapies Are In-House or Contracted. Assuming a need for it, and reasonable cost of providing it, provision of therapies--e.g., physical therapy, occupational therapy and speech therapy-- in-house generally is preferable to providing them by contracts with third parties. From an operational and administrative perspective, there are advantages to providing physical therapy services (PT) on an in- house basis. Contracted physical therapy staff tend to be available only for scheduled treatments; in-house staff are always available to assist staff and perform unscheduled maintenance therapy. In-house physical therapy staff work regularly with the nursing home staff. They are present within the facility anc learn the operation of the nursing home facility better than outside agencies. Manor Care proposes to provide in-house physical therapy staff, as opposed to employing outside physical therapy staff on a contract basis. The evidence was that the other applicants plan to provide all of these therapies through third- party contracts. Palm Court has one full-time PT assistant who works under the direction of a licensed physical therapist who now divides time among three 120- bed nursing homes managed by National Health Corp. The service of this licensed physical therapist is provided as part of National Health Corp's management services. Having to cover another 60 beds at Palm Court will spread the service even thinner. In addition, Palm Court's administrator conceded that the single PT assistant in Palm Court's application will not be enough once 60-beds are added to the facility; two will be required. Of course, the trade-off (implied in Finding of Fact 102, above) for providing in-house therapy is that it is less efficient if full use of the services is not required. De-institutionalization. FCP, Forum and Cypress have made special efforts to "de- institutionalize" nursing home care at their proposed facilities. All three proposals emphasize the provision of nursing care within aresidential development--a combination of retirement apartments, assisted living accommodations and nursing home. (See also this concept's impact on Continuum of Care concerns, Findings of Fact 114-127, below.) FCP's proposed facility is designed with a residential appearance to facilitate and implement the philosophy of de-institutionalization co:tained in its application. It reflects FCP's modular approach to care with residential units in wings tied to a common area of support services. The support services are extensive. There are activities areas, craft areas, exercise rooms, therapy areas, a beauty salon and barber shop, men's and women's recreational areas, private dining rooms, a community dining room, screened patios and porches, a newsstand, a bank, a post office, a library, a chapel, a screened-in gazebo, and a swimming pool. The exterior amenities of the design include a pond, an exercise course, a sitting deck, and a putting green. The center core and its recreation and therapy programs are designed to encourage interact ion among the residents in all the different levels of care. Although the third floor, where the nursing home is located, also has a secondary lounge and supplemental dining area, the primary dining area, as well as all of the other amenities, are on the first floor to enhance the interaction. The 30-bed size of FCP's proposed nursing home unit is a part of the original Phillips concept of a de- institutionalized setting, enabling the provision of more personalized care. Where there are fewer residents to care for, a better rapport between the residents and the care givers and a more family-type, personal atmosphere are achieved. This 30-bed concept previously has been approved by the Department in Lee and Polk Counties. Those projects are operationally, structurally, and physically identical to this proposed project. The symmetrical, 3-story design minimizes the amount of travel distance for the resident at the farthest unit to the amenities of the center core and its services. The nursing unit is on the third and smallest floor so that the distance by elevator to the central core for the nursing home iesidents is at a minimum'while still providing those residents with the greatest opportunity for quiet time. Privacy is an essential element in achieving high quality of care. The semi-private room plan utilized in this proposal is a unique approach to maximizing privacy for each resident. A permanent partial partition separating the two beds in each room effectively creates two private rooms. This provides a private space for each resident with his or her own thermostat, window, storage space, television, and telephone accommodation, and heightened auditory privacy. There will be equal access to and control of the vestibule and bathroom for each resident. The 585 gross square feet per bed in the FCP proposal is approximately one-third greater than standard nursing home room configuration. Forum's proposal's chief effort in furtherance of the goal of deinstitutiona1izationother than the continuum of care concept and overall residential appearance--is in the relatively large and "up-scale" living areas. The Cypress facility will include a central core dividing the two 60- bed portions of the project. The central core will include an administrative area, a chapel, a beauty and barber shop, enclosed courtyard, physical and occupational therapy, dining, a central kitchen, and a laundry area. One trade-off for de-institutionalization is cost. Both FCP and Forum generally cost more than the others. Cypress claims not to, but its projected construction cost of $49 per square foot is unrealistically low. See Findings of Fact 147 and 149, below. PROGRAMS (OTHER THAN ALZHEIMER'S). Continnum of Care. As just alluded to, several of the proposals emphasize the placement of their nursing home within a larger community of persons needing different levels of care. FCP. FCP proposes the construction of a 30-bed nursing unit as part of a family owned and operated, 120-unit, full continuum of care facility for the elderly. The facility also contains 60 independent living apartments and 30 adult congregate living units. The full continuum of care is proposed in a uniquely designed, de-institutionalized, home-like atmosphere. FCP offers a therapeutic community offering individualized, personalIzed care in small self- contained units, each specializing in various levels of care ranging from day care and respite care, through apartments for the elderly and assisted living, to skilled, post-hospital rehabilitation. The continuum of care will provide a homogeneous environment through which residents can move as their medical and personal needs change. Forum. Forum Group, Inc., is a national company which owns, develops and operates retirement living centers in a number of states. Forum's proposed nursing home will be part of a total retirement living center containing two other levels of care, assisted living (or ACLF units) and independent apartment units. Forum's proposal calls for provision of a continuum of care, from independent living to assisted living to nursing care, all on the same campus. Cypress. Cypress Total Care would be part of an overall medical project known as Cypress Park. The corporation was formed and a master plan was created, to be developed in two phases. Phase I is a 120-bed nursing facility consisting of 60 skilled and intermediate nursing beds, the subject of these proceedings, and 60 personal care units. Phase II would consist of a 290-unit adult congregate living facility (ACLF) and 143 units of independent villa housing on a golf course with nature trails and other amenities. Also proposed in Phase II would be units of medical offices and commercial health-related facilities to support the community. The area selected by Cypress is adjacent to the Sun Hill Medical Arts Building and the Community Arts Building, as well as a hospital owned by Hospital Corporation of America known as Sun City Hospital. These components would be worked into the overall master plan proposed by Cypress. Cypress proposes a multi-level assessment program. The 120-bed Cypress Park Community facility will have an independent level one facility in Sun City Center which will admit healthy elderly residents. These elderly may have canes, but no walkers or wheelchairs, and they will function normally in their activities of daily living. These individuals may prepare two meals a day in their apartments, or have them in the dining room. The main meal will be in the dining room. Social services and activities will be provided and recommended to the independent living residents to enhance their lifestyles. A home health agency is planned as a part of the center so that house calls can be made to insure that any necessary medications are taken and that residents receive the services they might need from time to time. (Cypress has not yet applied for a CON for its home health agency.) The next level of living is for patients who need more assistance. These are residents who require 24-hour companion service. These patients do not require skilled nursing care and do not require the institutional environment of a nursing home. Some of these paients may be in the first stage of Alzheimer's, or they may be physically frail, but not enough to require skilled nursing care. This level is primarily for those individuals who are physically frail and mentally strong or mentally frail and physically strong. The physically frail and mentally strong may have limited ambulatory capabilities, need assistance in activities of daily living, need medication, or need all their meals prepared. As noted above, this level of services also will be provided to individuals who are physically strong but mentally frail. The majority of these people will be Alzheimer's residents, they must be carefully monitored 24 hours a day and receive strong psychological support. The next level of care offered is for individuals who require some nursing care and no longer qualify for the level two care described above. This will be intermediate nursing care and will consist of care from certified nursing aides and licensed practical nurses. These individuals do not require skilled nursing care. Rehabilitation is the key to this portion of the plan, and the rehabilitative center will be involved to constantly push these individuals to the point of rehabilitation where they can reenter an independent lifestyle. If individuals progress further, they can move into the skilled nursing care center in which they will receive care not only from nursing aides and licensed practical nurses, but also from registered nurses. The final level would be acute hospital care which would be provided by the existing Sun City Hospital. The medical staff who are involved in the Cypress project also are on the medical staff of the Sun City Hospital and will be working and consulting with individuals both in the acute hospital care and the nursing home setting to provide appropriate levels of care to the individuals who need it. The nursing home will share IV teams, work with tracheotomy patients, A.D.A. dieticians, accounting services, and other services with the existing hospital in Sun City Center. Palm Court. Palm Court, while currently a free-standing 120- bed nursing home, is located on property where construction of a 360-bed adult congregate living facility (ACLF) is now starting. In addition, Palm Court has transfer agreements with area hospitals including Plant City Hospital, South Florida Baptist Hospital, Brandon Humana Hospital and Lakeland Regional Medical Center. It also has formal working relationships with home health agencies and with elderly programs in the area. The Others. The other applicants--HCR, Manor Care and HHL-- propose free-standing nursing homes. But all can be expected to make efforts to achieve transfer and other agreements with local hospitals, home health agencies and providers of care for the elderly where reasonable and appropriate. Sub-Acute Care. The HCR nursing home will be staffed and equipped to provide sub- acute care. The sub-acute care services provided by HCR will include high tech services such as ventilator care, IV therapy, pulmonary aids, tube feeding, hyperalimentation, and short and long term rehabilitation. HCR currently provides a wide variety of these sub-acute services in its existing nursing homes. CSI currently provides sub-acute nursing services at its existing Florida facilities. Those services include ventilators, hyperalimentation, intravenous therapy, Clinitron beds, heparin pumps, nosogastric and Jejunoscopy tube feedings, subclavian lines, and Hickman catheters. These service will be provided at HHL's proposed facility. Forum will provide skilled and intermediate care, and the following services will be offered at the proposed facility: Sterile dressing changes for decubitus care. Brittle diabetics on sliding scale insulin. Continuous administration of oxygen. Sterile case of tracheotomies. Ventilators. Continuous bladder irrigation. Hyper-alimentation or N-G feeding. IV treatment. Special medication monitoring (e.g. heparin, comadin). New post-operative cases facing hospital discharge as a result of D.R.G. reimbursement. The skilled nursing services to be provided by FCP include parenteral nutrition, internal nutrition, tracheostomy care, respirator care, skin wound decubitus care, ostomy care, and head trauma care. Palm Court also will provide sub-acute care. Adult Day Care Adult day care is a part of the specialized Azfleimer's program HCR proposes. In addition, HHL, FCP and Forum offer adult day care. Respite Care. HCR and Manor Care offer respite care as part of their Alzheimer's programs. Both will have no minimum length of stay and no extra charge over the regular daily rate for nursing home care. All the others except Palm Court also offer respite care, but Cypress' proposal for respite care is sketchy. HHL says it will offer respite care at no extra charge. D. Hospice. Only HCR, Forum and HHL offer hospice care as part of their nursing home programs. F. Rehabilitation and Community Outreach. All of the applicants propose rehabilitative (or restorative) care and some kind of community outreach programs. The distinctions among the ideas expressed by the applicants are not particularly competitively significant. However, the manner in which the therapies are delivered can be significant. See Finding of Facts 102 to 105, above. HOW SOON THE PROJECT BECOMES OPERATIONAL. Because there is a shortage of nursing home beds in Hillsborough County, there is a valid concern how long it would take for the holder of a CON to get its facility operational. Priority/Policy 3 of the 1985 Local Health Plan gives expression to this concern as follows: In competitive reviews, preference should be given to applicants with a documented history of implementing certificates of need within the statutory time frames. Of the applicants who have developed nursing homes in the past (i.e., excluding Cypress), all but Palm Court have a history of timely implementing their CONs. Palm Court had to request an extension of time in implementing its existing 120-bed facility. But Palm Court bought the CON for that project from the original owners in 1982 or 1983. Palm Court then had to secure another, more suitable location, re-design the facility, get construction financing and enter into a construction contract before construction could begin. This delayed the project and resulted in administrative litigation to decide whether Palm Court should lose the CON for failure to timely implement it or be given an extension of time. Palm Court prevailed, and the facility opened in September, 1985. HHL, through CSI, also has a history of timely implementing CONs but recent expansion in Florida raises some question whether it can continue to be as timely in implementing this CON, along with the others. See Findings of Fact 82-87,98, and 100, above. Generally, an addition of beds to an existing nursing home can be constructed more quickly than a new facility, giving Palm Court an advantage in potential speed of implementation. similarly, Manor Care, which is prepared to begin construction on its finally approved 60-bed CON, has an advantage over the others, as well as a potential construction cost savings over Palm Court. See Findings of Fact 146, below. COST OF CARE. Cost of Construction And Development. Advantage of Additions. Within limits placed on recovery of capital costs under the Medicaid and Medicare reimbursement programs now in place (which, to some extent, are emulated by private health care insurers and employers' health benefit plans), construction and development costs generally are reflected in the charges patients pay for nursing home care. Additions, such as Palm Court's and Manor Care's proposals, have a cost advantage over the other proposals. Construction sites already have been prepared, and it is not ncessary to duplicate some features already incorporated in the original structure, such as the kitchen, laundry and building plant. Due to delays in finalization of its approved CON for 60 beds, Manor Care has the fortuitous additional potential cost advantage of being able to construct both the "original facility" and the 60-bed "addition" at the same time. Quality vs. Cost Trade-Off. Other than the cost advantage of adding on, and of saving the contractor's fee by using an in-house construction team (as HCR does), reduced cost of construction generally will reflect reduced quality. For example, some of the quality features incorporated in the proposals of Forum, FCP and Cypress will cost more. See Finding of Fact 113, above. Put another way, lower costs may result in lower patient charges but also may result in lower quality, everything else being equal. The costs of construction of the various proposals may be found in Findings of Fact 1 to 7, above. It should also be noted at this point that Cypress' facility design has features--primarily unusual wall and roof angles and one water heater requiring larger pipe sizing-- which make its construction costs appear lower than they should be. Cost Overruns. The applicants' respective records for cost overruns in implementing CONs mirror their records for timeliness. See Findings of Fact 138-143, above. Cypress has no track record; all the others except Palm Court have experienced no cost overruns; Palm Court's $1.3 million cost overrun was precipitated by the need to secure another site and re-design the facility after it acquired the CON for 120 beds; and CSI, which would be responsible for implementing HHL's proposal, is involved in recent expansion which could affect its ability to bring all of its' CONs on line within budget. Cost of Operations. Economies of Scale--Size of Facility. In addition to construction and development costs, cost of operations are reflected in patient charges. It generally is accepted that a 120-bed nursing home is the optimal size for operational efficiencies. In this respect, the proposals by HCR, Forum and HHL have an advantage over the others. Manor Care has the advantage of proposing to expand a less efficient 60-bed nursing home to an optimally efficient 120-bed facility. To some extent, the generally accepted principle that 120-bed nursing homes are more desirable may have become dated. Two of the proposals--FCP's and Cypress'--combine some of the operating efficiencies of a 120-bed nursing home with the continuum of care and quality of care that can be achieved in a 120-bed living complex that incorporates a smaller nursing unit with other living units of different levels of care. By c(Jmparison, these type facilities are less institutionalized than a 120-bed nursing home, whether free-standing or incorporated within a larger complex with other living units. See Findings of Fact 106 to 113, above. Economies of Scale--Size of Organization. Economies of scale also can be realized from the size of the organization that owns or manages a nursing home. The proposals of all of the applicants except Cypress benefit from this principle, Palm Court to a lesser extent than the others, including in the area of quality assurance, nurse training and nurse recruiting. At the time of hearing, HCR operated nine nursing homes in Florida. HCR has approximately twelve nursing homes scheduled to begin construction in Florida within the next year. Nationwide, HCR operates more than 125 facilities containing approximately 16,000 beds. HCR has designed and built over 200 nursing homes and related health care facilities. HCR realizes substantial savings by using national contracts for the purchase of furniture, equipment, hardware and other operating supplies. Forum, as a national company, has the experience and purchasing power to cut operational costs through national purchase contracts and through economies and improvements experienced at the local level with a total retirement facility all on one campus. The Manor Care Florida Regional Office offers the services of a Regional Director, a Regional Nurse, a Nurse Recruiter, and a Comptroller to work with the corresponding departments of the Manor Care Florida nursing homes. FCP's long term plans are to develop homes in clusters, currently concentrating on the central west coast area of Florida. FCP has previously been granted certificates of need in Lee County and Polk County and has been recommended by the Department for a certificate of need in Hillsborough County. This cluster will operate under a unified local administration and share rehabilitative, medical, social, dietary and transportation personnel, enhancing economies of operation. CSI was formed in 1978 for the purpose of operating extended care facilities, including nursing homes and retirement centers. Since that time, the company has grown to its current operations of twenty-one (21) nursing homes, two (2) retirement centers and one (1) home for the aged located in seven states. Historically, much of this growth has occurred through the acquisition of existing facilities, although more recently the focus has shifted to the development of new facilities. Because CSI has established "national accounts" for the acquisition of movable equipment CSI can purchase nursing home equipment and furnishings and other operating supplies for HHL at reduced prices. (3) Patient Charges. The applicants propose the following room charges for semi-private rooms. Applicant Medicaid Medicare Private Pay HCR 60.94 76.00 75.00 FCP 60.00 65.00 80.00 Manor Care 1/ 69.37 ---- 72.57 HHL 66.30 109.33 2/ 72.76 Forum 67.18 80.67 79.50 Palm Court 77.00 100.00 77.00 Cypress 58.00 65.00 69.00 However, Cypress' charges are suspect; they probably are unrealistically low. Palm Court's charges also are suspect. It is difficult to understand from the evidence whether they are charges or Medicaid reimbursements. It also is difficult to tell if they are current or projected. In any event, they do not relate to the information in Palm Court's pro forma. As previously alluded to, patient charges do not necessarily proportionately reflect construction and development and operating efficiencies. They also are affected by programs and quality. BUILDING DESIGN AND ENERGY FEATURES. Patient Care and Safety. Overall, HCR's design is excellent. Functional elements are effectively inter-related, the building is designed to be open to landscaping, sunlight and court yards, and there is a wide range of amenities. Cypress' patient rooms are smaller than allowed under state requirments. The state minimum in Chapter 10D-29, Florida Administrative Code, is 80 net square feet per bed for multi-bed and 100 net square feet in a single room. Cypress' proposal only has approximately 65.58 gross square feet per bed. Cypress' building design also has rooms that are approximately 130 feet from the nurses' stations and clean utility and soiled utility rooms, 10 feet over the state maximum under Rule 10D-29.121(24), Florida Administrative Code. Forum's :4 floor plan also violates this standard. Rule 10D-29.121(6), Florida Administrative Code, requires a 20 foot clear view out room windows. Cypress' design also violates this standard. Manor Care's floorplan is the most compact one- story design. It has four compact wings off a central core. Forum proposes a two-story structure, creating a potential increased hazard for patients with reduced mobility. But DHRS rules provide for nursing homes of more than one floor, and required safety features, which Forum will provide, keep the potential to an insignificant minimum. FCP proposes a three-story facility with the nursing home on the third floor adjacent to the elevators connecting it to the first floor central core and amenities. FCP, too, adequately addresses DHRS safety concerns and actually could be more convenient to more nursing home patients than a one-story structure. Energy Conservation Features. All of the applicants propose to insulate their facilities for energy efficiency, some, e.q., HHL, somewhat better than others. Building design itself also affects energy consumption. Cypress' high exterior building surface area makes it a less energy-efficient design; Manor Care's compact design aces it a more energy-efficient design. FCP's three-story design also is a more energy-efficient design. Cypress' design incorporates only one water heater. This will produce line loss and lower energy efficiency, as well as potential total loss of hot water. (Cypress also has only one electrical plant.) Other Unique Design Features. Several unique features in FCP's room design helps "de- institutionalize" the facility and contributes to overall quality of care. Similarly, residents at FCP will be able to offer their guests refreshments from the kitchen at any time of the day or nights and children, spouses, and entire families will be encouraged to join residents for meals as often as they wish, assisting in the maintenance of ties with the community. Dining may be either communal or in the several lounge areas and private dining rooms. One of Cypress' unique design features is of the bizarre and morbid variety--a room designed to store deceased residents. FINANCIAL FEASIBILITY. The short-term and long-term feasibility of the proposals of HCR, FCP, Manor Care, Forum and HHL was never seriously questioned and was easily proven. Not so with Palm Court and Cypress. Palm Court. The duty to defend the immediate and long term financial feasibility of Palm Court's project rested with Steve Jones. Mr. Jones, who was not involved in the preparation of the application, offered his opinion that the Palm Court 60-bed addition would be feasible in the immediate and long terms. In giving his opinion of the project's financial feasibility, Mr. Jones stated he believed the pro forma in years 1 and 2 relate back to the corresponding tables in the application; but acknowledged he performed no analysis of his own, but rather he took the information provided him at face value. The pro forma is one of the key components of an application, as literally the heart of the application ties directly or indirectly into developing the pro forma, including Tables 1, 2, 3, 7, 8, 10, 11 and 25, as well as the amortization schedule. It is a required component of the application. Section 381.494(4)(e), F.S. (1985). Mr. Jones was asked to render an opinion on the reasonableness of Tables 8, 10, 11 and 25, which he did. On cross examination, however, Mr. Jones acknowledged he did not evaluate existing staff at Palm Court to determine the reasonableness of the pro forma. He did not verify the projected management fee and, in fact, stated he didn't know if it was included as a line item under "administration and general" on the pro forma nor how the management fee was computed. Mr. Jones, who has never prepared all the financial information in a CON application, also admitted he didn't know what current nursing salaries were in Hillsborough County, or any other salaries for that matter. He further acknowledged that he could not testify that the application's hourly wage times the number of working hours in a year would give you the stated nursing salaries. In sum, Mr. Jones admitted his opinion of the project's feasibility was based solely on his review of Tables 8, 11, 20 and 25 and his firm's involvement in the preparation of Palm Court's two most recent cost reports and not on the pro forma filed with Palm Court's application. Mr. Jones' accounting firm, in preparing Palm Court's cost reports, does not conduct an audit or express any opinion relating to the reasonableness of the statement of revenues and expenses. Joseph Lennartz, an expert in financial feasibility analysis, gave persuasive testimony outlining the inconsistencies in Palm Court's application. Palm Court's total revenue projections appearing in Table 7 for years 1 and 2 do correspond to the daily room and board revenues appearing in the pro forma, yet none of the Table 7 revenue projections correspond to the projected charges on Table 8. Assuming the salaries on Table 11 do not include fringe benefits, all FTE's and salaries on Table 11 are not accounted for in the pro forma. The pro forma salaries are significantly lower than on Table 11: RNs ,- understated by $12,426 LPNs - understated by $30,518 CNAS -understated by $239,541 Social Worker - understated by $2,983 Dietary - understated by $3,009 Maintenance - understated by $10,165 Activities - understated by $4,486 Housekeeping - understated by $6,365 Laundry & Linen - understated by $6,498 Admin & General - understated by $2,560 Palm Court's salary information on Table 11 is in 1987 dollars and needs to be inflated forward at least two to three years. Palm Court's current average salaries exceeded the proposed salaries on Table 11--including the administrator's salary, proposed at an annual salary of just over $31,000 when it actually was over $50,000 in 1987. Based on Palm Court's answers to interrogatories, Palm Court's management fee is not accurately reflected in the pro forma and is $44,559 too low in year 2; the projected dietary expense is understated by $112,386 in year 2; the projected housekeeping expense is understated by $46,609 in year 2; the projected laundry expense is understated by $35,308 in year 2; and plant expenses are understated by $100,116 in year 2. The terms of debt financing appearing on Table 2 of Palm Court's application do not conform to the amortization table, causing the interest expense line item on the pro forma to be understated. Cypress. As previously alluded to, the reasonableness of Cypress' projected Medicaid and Medicare rates appearing on its Updated Table 8 has not been established by competent substantial evidence. The Cypress pro forma fails to make provision for interest expense, depreciation, and property tax expense. These omissions represent an understatement of expenses as follows: YEAR ONE YEAR TWO INTEREST $177,818 $176,186 DEPRECIATION $110,000 $100,000 PROPERTY TAXES 2,200 25,000 (at assessed value 75 percent of market) TOTAL $290,018 $301,186 When interest, depreciation, and property taxes are included in the Cypress pro forma, the result is a loss of $90,000 in year one and $80,000 in year two. Furthermore, from a cash flow perspective, Cypress will incur a cash loss of $2,037 in year one and a cash gain of just $6,342 in year two. If property taxes are based on an assessed value at 100 percent of fair market value, there would be a $2,000 cash loss even in year two. It is not unusual for a nursing home to experience a negative cash flow in its first year of operation due to its low occupancy. However, it is unusual for a nursing home to experience a negative cash flow, as the Cypress facility will, while operating at optimal occupancy (95 percent). Cypress' owner/investors are willing to proceed with the project because they expect to be able to use some of the approximately $90,000 per year tax loss in years one and two to offset personal income, resulting in a cash on cash return of approximately $23,000 or 5.4 percent. Cypress' Table 1, "source of funds" states that the applicant has $425,000 "in hand". In fact, Cypress does not have those funds in hand. They are in the hands of the Cypress owner/investors. So far they have contributed $90,000 to the venture and will have to contribute not only an additional $425,000 to fund the nursing home but also an unspecified larger sum to fund Cypress planned ACLF and other projects. The evidence suggests that at least $425,000 more of equity contribution would be required for the rest of the project. Cypress did not prove that its proposed facility is financially feasible, either in the immediate or long term. BALANCED CONSIDERATION. Giving a balanced consideration to all of the statutory and rule factors addressed in the preceding findings, it is found that there is a net need for 231 community nursing home beds in Hillsborough County, that the applications of HCR, FCP and Manor Care should be granted and that the other applications should be denied.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Department of Health and Rehabilitative Services enter a final order granting the applications of HCR (CON Action No. 5000), FCP (CON Action No. 4993) and Manor Care (CON Action No. 5006) and denying the applications of Forum (CON Action No. 4999), HHL (CON Action No. 4978) Palm Court (CON Action No. 4987) and Cypress (CON Action No. 5004). RECOMMENDED this 14th day of November, 1988, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 14th day of November, 1988.
The Issue The issue for determination is whether the Agency for Health Care Administration found deficiencies at Wellington Specialty Care and Rehab Center sufficient to support the change in its licensure status to a conditional rating.
Findings Of Fact Wellington is a nursing home located in Tampa, Florida, licensed by and subject to regulation by the Agency pursuant to Chapter 400, Florida Statutes. The Agency is the licensing agency in the State of Florida responsible for regulating nursing facilities under Part II of Chapter 400, Florida Statutes. On September 10, 1998, the Agency conducted a complaint investigation at Wellington in a matter unrelated to the issues that are the subject of this proceeding. On that same date, the Agency also conducted an appraisal survey that focused on six areas of care for which Wellington had been cited as deficient in past surveys. After the investigation and survey were completed, the Agency determined that there was no basis for the complaint, and further determined that Wellington was not deficient in any of the six areas of care which were the subject of the appraisal survey. Notwithstanding its findings that the complaint against Wellington was unfounded and that there were no deficiencies in the targeted areas of care being reviewed, the Agency determined that Wellington was deficient in an area not initially the subject of the September 1998 survey. Specifically, the Agency found that Wellington had failed to provide adequate supervision and assistance devices to two residents at the facility in violation of the regulatory standard contained in 42 C.F.R. s. 483.25(h)(2). Based on its findings and conclusions, the Agency issued a survey report in which this deficiency was identified and described under a "Tag F324." The basis for the Agency’s findings were related to observations and investigations of two residents at the facility, Resident 6 and Resident 8. During the September 1998 survey and complaint investigation, the surveyors observed that Resident 6 had a bruise on her forehead and that Resident 8 had bruises on the backs of both of her hands. Resident 6 suffered a stroke in May 1998 and had left-side neglect, a condition that caused her to be unaware of her left side and placed her at risk for falls. Moreover, Resident 6's ability to recall events was impaired. The Agency's investigation revealed that Resident 6 sustained the bruise on her forehead when she fell from the toilet on August 31, 1998. The Agency determined that Resident 6 fell because she was left alone by the staff of the facility and further concluded that Wellington was responsible for causing this fall. The Agency believed that given Resident 6's left-side neglect, the facility staff should have known not to leave the resident unattended during her trips to the toilet. The Agency suggested that Wellington should have provided constant supervision to Resident 6, although it acknowledged that such supervision may have created privacy violations. In making its determination and reaching its conclusions, the Agency relied exclusively on an interview with Resident 6, notwithstanding the fact that her ability to recall events was impaired. Since Resident 6 was admitted to the facility in May 1998, Wellington appropriately and adequately addressed her susceptibility to falls, including falls from her toilet. After Resident 6 was initially admitted to the facility in May 1998, she received occupational therapy to improve her balance. In late June 1998, following several weeks of occupational therapy, Wellington’s occupational therapist evaluated Resident 6’s ability to sit and to control the balance in the trunk of her body and determined that the resident was capable of sitting upright without support for up to 40 minutes. Based upon that assessment, Resident 6 was discharged from occupational therapy on June 25, 1998, and her caregivers were provided with instructions on how to maintain her balance. At the time Resident 6 was discharged from occupational therapy, a care plan was devised for her which provided that the facility staff would give her assistance in all of her activities of daily living, but would only provide stand-by assistance to Resident 6 while she was on the toilet, if such assistance was requested. In light of the occupational therapist's June 1998 assessment of Resident 6, this care plan was adequate to address her risk for falls, including her risk for falls while on the toilet. Wellington also provided Resident 6 with appropriate assistance devices. In Resident 6's bathroom, Wellington provided her with a right-side handrail and an armrest by her toilet to use for support and balance, and also gave her a call light to alert staff if she felt unsteady. These measures were effective as demonstrated by the absence of any falls from the toilet by Resident 6 over the course of June, July, and August 1998. The Agency's surveyor who reviewed Resident 6’s medical records was not aware of and did not consider the June 1998 Occupational Therapy Assessment of Resident 6 before citing the facility for the deficiency. Resident 8 was admitted to Wellington in February 1998 with a history of bruising and existing bruises on her body. At all times relevant to this proceeding, Resident 8 was taking Ticlid, a medication which could cause bruising and also had osteopenia, a degenerative bone condition that could increase Resident 8's risk for bruising, making it possible for her to bruise herself with only a slight bump. After observing the bruising on the backs of both of Resident 8's hands during the September 1998 survey, the Agency asked facility staff about the bruising and also reviewed the resident’s medical records. Based on her interviews and record review, the Agency surveyor found that these bruises had not been ignored by Wellington. Rather, the Agency found that when facility staff initially observed these bruises on Resident 8's hands, (1) staff had immediately notified Resident 8's physician of the bruises; and (2) the physician then ordered an X-ray of Resident 8 to determine whether there was a fracture. The X-ray determined that there was not a fracture but that there was evidence of a bone loss or osteopenia, which indicated that Resident 8 had an underlying structural problem which could increase the resident's risk for bruising. The Agency surveyor found nothing in Resident 8's medical record to indicate that the facility had investigated the bruising on the resident’s hands, identified the cause of the bruising, or identified any means to prevent the bruising from reoccurring. Based on the absence of this information in Resident 8's records, the Agency cited the facility for a deficiency under "Tag F324." The Agency's surveyor made no determination and reached no conclusion as to the cause of the bruising. However, she considered that the bruising on Resident 8 may have been caused by the underlying structural damage, medication, or external forces. With regard to external forces, the surveyor speculated that the bruising may have occurred when Resident 8 bumped her hands against objects such as her chair or bed siderails. During the September 1998 survey, when the Agency surveyor expressed her concerns about the cause of the bruising on Resident 8's hands, Wellington’s Director of Nursing suggested to the surveyor that the bruising could have been the result of the use of improper transfer techniques by either Resident 8’s family or the facility staff, or Resident 8’s medications. Despite the surveyor's speculation and suggestions by the facility's Director of Nursing, the Agency surveyor saw nothing that would indicate how the bruising occurred. In fact, the Agency surveyor's observation of a staff member transferring Resident 8 indicated that the staff member was using a proper transfer technique that would not cause bruising to the resident’s hands. The Agency surveyor made no other observations and conducted no investigation of the potential causes of the bruising on Resident 8's hands. During the September 1998 survey, after the Agency surveyor inquired as to the cause of the bruises on Resident 8's hands, the facility conducted an investigation to try to identify the potential causes for the bruising. The investigation was conducted by the facility’s Care Plan Coordinator, a licensed practical nurse who was also the Unit Manager for the unit on which Resident 8 was located. Included in the Care Plan Coordinator's investigation was a thorough examination of the potential causes suggested by the Agency's surveyor. The Agency surveyor’s speculation that the bruising was caused when Resident 8 hit her hands against her chair or bed siderails was ruled out as a cause for the bruises because Resident 8 was unable to move around in her bed or chair. More importantly, there were no bedrails on Resident 8's bed and her chair was a heavily padded recliner. Also, as a part of her investigation, the Care Plan Coordinator observed the transfer techniques employed by both Resident 8's family members and facility staff. During these observations, she did not see any indication that the techniques used were improper or would otherwise cause Resident 8 to bruise her hands. Based upon her thorough investigation, the Case Plan Coordinator determined that there were no identifiable causes of the bruising and, thus, there were no care plan interventions that the facility could have implemented then or in September 1998 to prevent the bruising suffered by Resident 8. Instead, the Care Plan Coordinator reasonably concluded that the bruising was most likely an unavoidable result of Resident 8's medications and her osteopenia. The Agency is required to rate the severity of any deficiency identified during a survey with two types of ratings. One of these is "scope and severity" rating which is defined by federal law, and the other rating is a state classification rating which is defined by state law and rules promulgated thereunder. As a result of the September 1998 survey, the Agency assigned the Tag F324 deficiency a scope and severity rating of "G" which, under federal regulations, is a determination that the deficient practice was isolated. The Tag F324 deficiency was also given a state classification rating of "II" which, under the Agency’s rule, is a determination that the deficiency presented "an immediate threat to the health, safety or security of the residents." Because the Agency determined that there was a Class II deficiency at Wellington after the September 1998 survey, it changed Wellington’s Standard licensure rating to Conditional, effective September 10, 1998. At the completion of the September 1998 survey, the Agency assigned the Class II rating to the deficiency although the surveyors failed to determine and did not believe that there was an immediate threat of accidents to other residents at Wellington. In fact, at the time of the September 1998 survey, the number of falls at Wellington had declined since the last survey. The Agency returned to Wellington on November 6, 1998, to determine if the facility had corrected the Tag F324 deficiency cited in the September 1998 survey report. After completing that survey, the Agency determined that the deficiency had been corrected and issued Wellington a Standard License effective November 6, 1998.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that the Agency for Health Care Administration enter a final order issuing a Standard rating to Wellington and rescinding the Conditional rating. DONE AND ENTERED this 17th day of May, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 1999. COPIES FURNISHED: R. Davis Thomas, Jr., Esquire Qualified Representative Broad and Cassel 215 South Monroe, Suite 400 Post Office Drawer 11300 Tallahassee, Florida 32302 Thomas Caufman, Esquire Agency for Health Care Administration 6800 North Dale Mabry Highway Suite 200 Tampa, Florida 33614 Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Paul J. Martin, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue Whether Respondent committed deficient practices as alleged in violation of 42 C.F.R. Section 483.13(b) and 42 C.F.R. Section 483.13(c)(1)(ii), adopted by reference in Florida Administrative Code Rule 59A-4.1288; and if so, whether Petitioner should impose a civil penalty in the amount of $5,000 and issue a conditional license to Respondent.
Findings Of Fact Petitioner is the state agency charged with licensing and regulating nursing homes in Florida under state and federal statutes. Petitioner is charged with evaluating nursing homes facilities to determine their degree of compliance with established rules as a basis for making the required licensure assignment. Additionally, Petitioner is responsible for concluding 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 the statute, Petitioner must classify deficiencies according to the nature and scope of the deficiency when the criteria established under the statute are not met. The classification of any deficiencies discovered is determinative of whether the licensure status of a nursing home is "standard" or "conditional." Respondent is a 98-bed nursing home located at 1024 Willow Springs Drive, Winter Springs, Florida, and is licensed as a skilled nursing facility. On May 30, 2003, Petitioner's staff conducted an inspection, also known as a survey, at Respondent's facility. Upon completion of the survey, Petitioner issued a document entitled, Center for Medicare and Medicaid Services, CMS Form 2567L, also known as a "2567," which contains a statement of the alleged violations of regulatory requirements, also referred to as "deficiencies," titled "Statement of Deficiencies and Plan of Correction." The evaluation or survey of a facility includes a resident review and, depending upon the circumstances, may consist of a record, reviews, resident observations, and interviews with family and facility staff. Surveyors note their findings on the 2567 Form, and 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. Petitioner's surveyors use the "State Operations Manual," a document prepared by the United States Department of Health and Human Services, Center for Medicare and Medicaid Services, as guidance in determining whether a facility has violated 42 C.F.R. Chapter 483. Count I In Count I of the Administrative Complaint, Petitioner alleges that Respondent's staff subjected three residents (Resident Nos. 6, 13, and 18) to verbal and mental abuse in violation of 42 C.F.R. Section 483.13(b), which provides that a nursing home resident has the right to be free from verbal and mental abuse. As to Resident No. 6, Petitioner contends that this resident stated to a surveyor that the resident had "overheard" a certified nursing assistant (CNA) loudly tell another staff member that the resident was "going to the bathroom 25 times a day." Petitioner believes the CNA's statement, which was allegedly "overheard," occurred sometime during the month of March 2003, based upon nurses' notes which indicate Resident No. 6 had an episode of diarrhea during this time. However, the nurses notes also reveal that during this time Resident No. 6 was subject to confusion and nonsensical outbursts. Petitioner's belief that Resident No. 6 was a reliable historian is based on Petitioner's mistaken belief that Resident No. 6 was admitted about March 30, 2003, and was alert and oriented and not confused upon admission. Petitioner's staff exhibited a lack of understanding of the timing and significance of the Multiple Data Set (MDS) forms describing Resident No. 6's mental condition upon which they relied. In fact, Resident No. 6 was admitted in mid-February 2003 and exhibited confused and eccentric behavior. The "overheard" comment was not reported to Respondent until the survey. Therefore, the evidence that this incident occurred as described by Petitioner is unreliable hearsay. Surveyors reviewed Respondent's records, which contained a complaint from a family member of Resident No. 6 that the same CNA had noticed that the resident had a physical anomaly. The CNA called other CNAs to view this anomaly, which was located in Resident No. 6's genital area. Respondent learned of the allegations relating to Resident No. 6's physical anomaly on April 21, 2003, from a family member of Resident No. 6. Respondent immediately began an investigation, including an interview with and physical examination of Resident No. 6 and an interview with the CNA. The resident only stated that she did not want this CNA taking care of her any longer. The CNA denied the allegations. The CNA was suspended pending investigation and later terminated based upon directions from Respondent's corporate office based on additional, unrelated information. The incident was reported to the Department of Children and Families (DCF) Abuse Hot Line on April 22, 2003. Although Resident No. 6 and her family member had frequent contact and conversation with Respondent's director of nursing (DON), neither had ever complained about the CNA's conduct. Respondent's DON observed no mental distress on the part of Resident No. 6 after Respondent's DON learned of the allegations. Petitioner alleges that this CNA had observed the physical anomaly for the first time. If that is true, it would be expected that the CNA would consult other nursing staff to address potential nursing issues. As to Resident No. 13, Petitioner alleges verbal abuse based upon the allegation that Resident No. 13 reported to a surveyor that she found a male resident sitting on her bed in her room. When this was reported by Resident No. 13 to one of the Respondent's nurses, the resident alleged that the nurse "laughed at" the resident. This incident was reported by Resident No. 13 to Respondent's DON shortly after it happened. Respondent's DON interviewed the resident and the two nurses who were on duty at the time. The nurses reported that they assured Resident No. 13 that everything was okay, escorted the male resident to his room, and Resident No. 13 went to bed with no complaint or distress. This incident was reported by Resident No. 13 to Respondent's DON in a joking manner, as an event and not as a complaint. Although Respondent's DON was concerned that the nurses should respond appropriately and was also concerned that the wandering resident be identified, Respondent's DON did not believe that the incident constituted any form of abuse. Respondent's DON did not observe this incident to have any adverse impact on Resident No. 13. During the survey, Petitioner's surveyor advised Respondent that the incident should have been investigated and reported to the DCF Abuse Hot Line. Respondent's DON completed a written report and called the DCF Abuse Hot Line and related the incident. The incident did not meet the DCF guidelines for the reporting of abuse. On or about March 30, 2003, two surveyors observed Resident No. 18 in her wheelchair as she approached the nurse's station. One of Respondent's nursing staff spoke in a "curt, loud voice" to Resident No. 18. The resident had approached the nurses' station to ask for her medication, to which the nurse replied: "I told you I will give you your medicine." Resident No. 18 was hearing-impaired and was documented in her medical record as one to whom staff "must speak loudly." This resident did not wear any hearing assistance devices. Respondent's staff credibly described this resident as one to whom staff had to speak loudly and in clipped words for the resident to understand. Petitioner's surveyors did not speak to this resident after the alleged incident. There is no evidence that this incident had any effect on the resident or even that the resident heard the staff member. The incident does not rise to the level of verbal abuse of the resident. Count II Count II of the Administrative Complaint alleges a violation of 42 C.F.R. Section 483.13(c)(1)(ii), which provides that a nursing home must develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse; and that the nursing home must not employ individuals who have been found guilty of abuse or neglect or are listed in the state nursing aide registry with a finding of abuse, neglect, or mistreatment. Count II is based on the allegation that Respondent failed to report to Petitioner (the appropriate "state agency") the incidents involving Resident No. 13 and 18 and other allegations of abuse or neglect, which the surveyor allegedly identified in Respondent's log of grievances. Respondent has in place written policies and procedures regarding abuse and neglect and its staff receive regular training regarding these policies and procedures. Petitioner has offered no evidence that these written policies and procedures or the staff's knowledge of these policies and procedures is inadequate. With regard to Resident No. 13, when Respondent's DON learned of the incident from the resident, Respondent's DON made inquiries of nursing staff who were on duty at the time, in addition to interviewing the resident. Respondent's DON did not consider any aspect of the incident to constitute abuse or neglect. Later, after Petitioner alleged, during the survey, that the incident should have been reported to DCF, Respondent's DON prepared a written report of the incident and called and related the incident to the DCF Abuse Hot Line. Respondent's DON was advised by DCF that the incident did not meet DCF's requirements for reporting. Respondent is required to report all allegations of abuse and neglect to the DCF's Abuse Hot Line. Petitioner does not dispute this fact. Instead, Petitioner contends that Respondent is also required to report allegations of abuse and neglect to the "state agency" and that Respondent failed to do so. The "state agency" for the purpose of federal regulations is Petitioner. Petitioner's allegations are based upon its review of Respondent's grievance log, which Petitioner's surveyors say allegedly records 18 incidents of alleged abuse, none of which was reported to the state agency. At the time of the survey, Respondent was a part of the Mariner Corporation. It has since disassociated from that corporation and changed its name to Tuskawilla Nursing and Rehabilitation Center, effective October 1, 2003. At the time of the survey, all reporting of abuse allegations were done by the corporate regional risk management department, and it is not known if they reported any of the incidents cited by the surveyors to Petitioner. However, the document received in evidence, which has many more than 18 entries in summary style, is almost completely illegible. Petitioner's witness was unable to identify any entries on this document which could be identified as alleged abuse and which had not been properly reported. Understanding this document requires substantial explanation, which was never provided. Standing alone, this document is not probative of any fact. Petitioner offered no evidence that Respondent employed any individuals who had been found guilty of or who had been listed on the nurse aide registry of abusing, neglecting, or mistreating residents. Even if it is assumed that Respondent should have reported but did not report to Petitioner the 18 alleged incidents or the incident regarding Resident No. 13, Petitioner offered no evidence that reporting this information to DCF, but not to Petitioner, had any impact on any resident or prevented a resident from maintaining or achieving the resident's highest practicable physical, mental, or psychosocial well-being. Count III Since there is no proof of Class II deficiencies, there is no basis for imposing a conditional license status on Respondent for the period May 30, 2003, until July 8, 2003.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that a final order of dismissal of the Administrative Complaint be entered in this case. DONE AND ENTERED this 31st day of March, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 31st day of March, 2004. COPIES FURNISHED: Alfred W. Clark, Esquire 117 South Gadsden Street, Suite 201 Post Office Box 623 Tallahassee, Florida 32302-0623 Gerald L. Pickett, Esquire Agency for Health Care Administration Sebring Building, Suite 330K 525 Mirror Lake Drive, North St. Petersburg, Florida 33701 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue The issues for determination are: (1) whether the deficiency alleged as a result of a Complaint Survey conducted on June 18, 2002, is appropriately classified as a Class I deficiency; (2) whether a fine in the amount of $10,000 is appropriate; (3) whether the "Conditional" licensure status, issued October 29, 2002, is warranted; and (4) whether the alleged violation constitutes grounds for a six-month survey requirement and $6,000 survey fee.
Findings Of Fact At all times material hereto, AHCA was the state agency responsible for evaluating nursing homes in Florida pursuant to Section 400.23(7), Florida Statutes. As such, in the instant case it is required to conduct a complaint evaluation of nursing homes in Florida in accordance with Section 400.23(8), Florida Statutes (2000). AHCA's evaluation of Florida nursing homes requires an assignment of a rating of standard or conditional to each licensee. In addition to its regulatory duties under Florida law, AHCA is the state "survey agency," which, on behalf of the federal government, monitors nursing homes that receive Medicaid or Medicare funds. Carrollwood Care Center is a nursing home located at 15002 Hutchinson Road, Tampa, Florida, and is duly-licensed under Chapter 400, Part II, Florida Statutes. On June 18, 2002, a complaint investigation survey was conducted at Carrollwood by Pamela Mraz, a surveyor for AHCA, who visited the Carrollwood facility to inquire into the death of Resident 1 that occurred on May 5, 2002. Ms. Mraz is a registered nurse (RN) with over 20 years of nursing experience, including having served as a director of nursing and having completed more than 100 surveys of long-term care facilities. She has been a surveyor for AHCA since September 2001. During the course of her complaint survey of the facility, Ms. Mraz examined the facility's records pertaining to Resident 1's death. Her review indicated that the death of Resident 1 constituted failure to meet the standards set-up under Tag F324, as identified on the Form 2567-L of the U.S. Department of Health and Human Services' Health Care Financing Administration. The parties refer to this form as the HCFA 2567-L or the "2567." The 2567 is the document used to charge nursing homes with deficiencies that violate applicable law. The 2567 identified each alleged deficiency by reference to a tag number. Each tag on the 2567 includes a narrative description of the allegations against Carrollwood and cites a provision of the relevant rule or rules in the Florida Administrative Code violated by the alleged deficiency. To protect the privacy of nursing home residents, the 2567 and this Recommended Order refer to the resident by a number (i.e., Resident 1) rather than by the name of the resident. AHCA must assign a class rating of I, II or III to any deficiency that it identifies during a survey. The rating reflects the severity of the identified deficiency, with Class I being the most severe and Class III being the least severe deficiency. There is one tag, Tag F324, at issue in the instant case, and, as a result of the complaint survey of June 18, 2002, AHCA assigned Tag F324 a Class I deficiency rating. Tag F324, reflecting the requirement of 42 C.F.R. Chapter 483.25(h)(2), requires a facility to ensure that each resident receives adequate supervision and assistance devices to prevent accidents. AHCA's witness, Ms. Mraz, was asked her opinion only regarding the facility's compliance with the requirements of Tag F324. She opined that Carrollwood did not provide adequate supervision and assistance devices to prevent the accidental death of Resident 1. Resident 1's first admission to Carrollwood was on March 27, 2002. He was 89 years of age at the time of his admission, weighted 118 pounds and was 5'3" in height. He did not speak English. His initial screening assessment form reflected that he suffered with both short-term and long-term memory impairment, incontinency, decubitus ulcer, prostate cancer, malnutrition, heart problems, and was determined by Carrollwood's staff to be "bedfast" (in bed not less than 22 hours per day). Resident 1's range of motion was limited to his hands, arms and legs. Even though he could make occasional slight changes in body or extremity positions, he was unable to make frequent or significant body changes independently. Resident 1 was incapable of getting out of bed on his own, had no involuntary body movements, and required two persons to physically assist him in bed mobility. He could not use a wheel chair and experienced short periods of restlessness demonstrated by crying out in Spanish, his native language. Carrollwood's Fall Risk Assessment observation indicated that Resident 1 was virtually immobile and was, therefore, a minimum risk for falls. His assessment and care plan were adequate for his condition and comfort. Resident 1 was placed in a semi-private room with his wife. A curtain between the beds separated them. Viewed from the foot of Resident 1's bed, his wife's bed would be to the left of his bed. On the right side of his bed, an upper half side rail was placed as an enabler. On April 17, 2002, three weeks after his admission, Resident 1 was discharged to the hospital due to an increase in his temperature and congestion. On April 30, 2002, he returned from the hospital and was readmitted to Carrollwood. At this time, his second admission, he was assessed by Carrollwood's staff to be in a much weaker condition than at his initial admission, with additional diagnoses of sepsis, pneumonia, psychosis, anemia, depression and malnutrition. Upon his second admission to Carrollwood, his assessment determination changed, and Resident 1 was classified as "bed-bound," as opposed to the prior assessment of bedfast, and he required extensive assistance, at least two persons to physically assist in transferring and dressing him with use of the upper bed side rail as enablers. The doctors' notes made in conjunction with the second admission did not include the use of upper side rails as in-bed enablers. The Nurse Evaluation Assessment, dated May 1, 2002, reported that Resident 1 was completely dependent on staff for all his daily living activities, i.e., bathing, grooming, dressing, feeding, and toileting, because he could not do these functions for himself. His Resident Care Plan reflected that he had a "potential for falls due to decreased cognition and physical mobility." His bed was lowered, the head of his bed was elevated, a second mattress was added, and a pneumatic call bell was attached. With knowledge of his updated medical history and further weakened condition, the nursing staff made an independent decision to use one upper bed side rail on Resident 1's bed. The staff had received a Food and Drug Administration alert regarding potential dangers resulting from the use of side rails as recently as February 2002, and had participated in in- service training sessions concerning the use of side rails. AHCA presented no evidence of authoritative directives for "the care giver's use of side rails" in long-term care facilities. There was no evidence of statutory proscriptions, rules or accepted industry standards relating to the use of side rails in long-term care facilities. Therefore, each long-term care facility, including Carrollwood, may independently determine when, where, how and under what circumstances bed side rails will be used. Thus, AHCA's evidence of record affords no substantial basis to support its allegation that Carrollwood's decision to use an upper side rail on Resident 1's bed demonstrated a lack of adequate supervision that would cause or tend to cause immediate harm and/or death to Resident 1. Marie Gianan, RN and MDS Coordinator for Carrollwood, which included coordination of assessments and care planning since July 2000, determined that Resident 1's April 17, 2002, transfer to the hospital was a "complete discharge" from Carrollwood. According to Ms. Gianan, Carrollwood's policy, as she understands it, is that once a resident is completely discharged, his or her medical records go to medical storage. Thus, Resident 1's return on April 30, 2002, was considered and treated as a new admission requiring an original initial assessment, a new care plan and 30 days thereafter, preparation of a new MDS. The procedure, as understood by Ms. Gianan, was to not consider Resident 1's old medical records, old care plans, and old MDS, but rather to start anew based upon staff's observations, inquiries, and a check and review of current medical records and, thereafter, formulate an assessment and initial care plan within 24 hours of admission. The MDS would follow within 30 days after completion of the initial care plan. Resident 1's April 2, 2002, care plan and fall risk assessment, indicated the following: skin problems that required repositioning him in bed every two hours; bath to be given on shower day or twice weekly; dehydration requiring liquids every night; placing his bed in a low position to prevent falls due to his decreased physical mobility; providing a pneumatic call bell; and using one upper side rail as an enabler placed on his bed. The care plan for Resident 1 met all requirements and does not indicate nor support an allegation of lack of supervision or inadequate care. Ms. Gianan was adamant that Resident 1, although maybe weaker in body strength than before his discharge on May 8, 2002, was "mobile," per her interpretation of the word on his April 2, 2002, admission. She disagreed with the March 27, 2002, assessment of Resident 1 as being "immobile." Ms. Gianan has opined that, "immobile means you do not move in bed--you just stay in the position that you are put in--I do not agree with that evaluation." Carrollwood's policy permits its MDS Coordinator to independently evaluate, assess, interview and otherwise determine the status and condition of each resident. On May 5, 2002, the date of Resident 1's death, at approximately 6:45 a.m., Ann Nickerson, certified nursing assistant (CNA), entered Resident 1's room to empty his catheter. During this process, Resident 1 cried out in Spanish. His wife, awaken by the activity and Resident 1's cry, said to Ms. Nickerson "he is alright," and Ms. Nickerson completed her task and departed the room. An hour and one-half later, at approximately 8:15 a.m., Jermaine Martinez, CNA, entered Resident 1's room with his breakfast tray. Mr. Martinez found Resident 1 on the floor with his clothing pulled upward around his torso. His head was wedged between the bed's upper side rail and the mattress, with his chin resting upward against the upper side rail, thereby hyperextending his neck. Resident 1 had no pulse or respiration when found by Mr. Martinez. The Hillsborough County Medical Examiner, in an amended1 death certificate, listed Resident 1's cause of death as positional asphyxiation; the result of a lack of oxygen due to the position of his head wedged between the bed mattress and the upper side rail and hyperextension of his neck. Within a few minutes of the discovery of Resident 1 on the floor by the Mr. Martinez, Resident 1's family entered the facility for a visit and was stopped in the hall by the duty nurse who informed them of his death. During that brief period, and following the instructions given by the duty nurse, Mr. Martinez and Ms. Nickerson moved the body of Resident 1 from the floor and placed him back in his bed, pulling the cover up to his chin. Thereafter, staff contacted Carla Russo, director of nursing, for further instructions. Following instructions, staff called and released Resident 1's body to the funeral home without first notifying the Hillsborough County Medical Examiner. Because of this action, in violation of policy, no autopsy was performed on the body. It is undisputed that the facility's failure to immediately notify the Hillsborough County Medical Examiner of Resident 1's death constituted a violation of the facility's own policy and procedures regarding the death of residents at the facility. AHCA did not cite the facility for this particular facility policy violation. Therefore, there is no evidence to support an allegation of lack of supervision or inadequate care for this policy violation. Based upon the care plan, nurse's notes, and medical records, it is undisputed that staff visited Resident 1's room an average of every two and one-half hours, if not more often, to provide medications and to attend the personal needs for both Resident 1 and his wife, during each 24-hour period from April 2, 2002, to May 5, 2002. During those staff visits, while attending one occupant, staff would, could and did observe the other occupant. During those frequent room visits during the 24-hour period preceding Resident 1's demise, staff had not observed him to be restless or to independently move his body about in his bed. There is no evidence that Resident 1 was not under staff's observation, and, by implication, not under staff's supervision for any overly long period or an extended period of time of more than two and one-half hours during the April 2, 2002, through May 5, 2002, time period. The evidence does not indicate or support an allegation of lack of supervision or inadequate care by the facility. From all medical records in evidence, it is clear that during his residency in the facility, Resident 1 never exhibited the type of behaviors that would indicate to staff he was a risk for falls; he had no recorded prior history of falls at home, at the hospital or at Carrollwood, he did not use a wheelchair and he could not independently ambulate. He was never observed by staff attempting to get out of bed, and his only infrequent and occasional expressions of restlessness were "crying out" in Spanish. The evidence of record does not indicate or support an allegation of lack of supervision or inadequate care by the facility. AHCA presented no evidence of sufficient reliability to provide a plausible foundation upon which to conclude that the cause of Resident 1 moving from his bed-bound prone position to a sitting position on the floor with his neck wedged between the upper side rail and the bed mattress was due to a lack of supervision or inadequate care by the facility's staff. The evidence supports a plausible conclusion that Resident 1's demise, although inexplicable from the evidence of record, was nonetheless accidental.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order dismissing in its entirety the Administrative Complaints filed in this cause. DONE AND ENTERED this 27th day of March, 2003, in Tallahassee, Leon County, Florida. FRED L. BUCKINE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 2003.
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
