Findings Of Fact Tampa General Hospital is a 530 bed short term general acute care hospital. Hillsborough County Hospital is a 157 bed general acute care hospital. Both are divisions of Hillsborough County Hospital Authority, a public hospital system located in Tampa, Florida. T. 25; Hearing Officer E. 1. Tampa General Hospital and Hillsborough County Hospital filed timely petitions and have standing to seek such hearings. On January 29, 1987, both petitioners filed fiscal year 1986 actual reports as required by statute and rules of Tampa General Hospital. On April 23, 1987, Tampa General Hospital filed in revision to its actual report with respect to RPICC charges and receipts. It is officially recognized that a recommended order has been entered on this date in the consolidated DOAH case numbers 87-5207H and 87-5208H recommending that the April 23, 1987, revision be deemed final and not a correction submitted pursuant to section 12, chapter 87-92, Laws of Florida. If this conclusion is correct, the question of approval or disapproval of the April 23, 1987, revision is moot. The Board, however, contends that it has generally has the authority to disapprove a report of this nature pursuant to its rules and the statutes establishing the Board. On June 9, 1987, and the weeks thereafter, both Petitioners sought to correct their 1986 actual reports with respect to funds received by the Petitioners from Hillsborough County pursuant to the special sales tax enacted pursuant to chapters 84-373 and 85-555, Laws of Florida. These proposed corrections were submitted pursuant to section 12, chapter 87-92, Laws of Florida. The Hospital Cost Containment Board contends that it generally has authority to disapprove reports filed with the Board by hospitals regulated by the Board, and specifically contends that authority extends to revisions sought by the Petitioners with respect to both the sales tax funds and the RPICC funds. The Board has proposed to adopt rule 27J-1.0075 pursuant to its interpretation of it is authority and cites section 395.505, Fla. Stat. (1987) as general authority for such rulemaking. The portion of rule 27J-1.0075 challenged in this case provides; (2) A hospital may correct its 1986 fiscal year data for purposes of the redistribution of the Public Medical Assistance Trust Fund surplus, if such correction is verified by the hospital's independent certified auditors. Such corrections shall not be considered if received at the Board office after September 29, 1987. All such corrections shall comply with the following criteria, to the Board's satisfaction. (E.S.) The proposed rule was not published in the Florida Administrative Weekly until September 4, 1987, well into the period for filing corrections to 1986 actual reports pursuant to section 12, chapter 87-92, Laws of Florida. Since the record in these cases is consolidated with the section 120.57(1), Fla. Stat., cases, all of the findings of fact in the recommended order in DOAH case numbers 87-5207H and 87-5208H entered this same date, including the Appendix to that recommended order, are incorporated in this order by reference for purposes of background information in this rule challenge.
Conclusions THIS CAUSE comes before the AGENCY FOR HEALTH CARE ADMINISTRATION (the "Agency") concerning Certificate of Need ("CON") Application No. 10048, which was filed by SHANDS TEACH HOSPITAL AND CLINICS, INC. d/b/a SHANDS REHAB HOSPITAL (hereinafter "Shands"), LEESBURG REGIONAL MEDICAL CENTER, INC. (hereinafter "Leesburg") and Filed May 7, 2010 2:01 PM Division of Administrative Hearings. HEALTHSOUTH REHABILITAITON HOSPITAL OF OCALA, LLC ("hereinafter "HealthSouth" in the First Batching Cycle of 2009 request a CON to establish a comprehensive medical rehabilitation hospital. The Agency preliminarily approved HealthSouth Rehabilitation Hospital of Ocala, LLC application for CON 10048, thus denying the applications of Shands and Leesburg Cycle of 2009. Thereafter, Shands and Leesburg timely filed Petitions for Formal Administrative Hearing with respect to the preliminary approval of HEALTHSOUTH'S application, which the Agency Clerk forwarded to the Division of Administrative Hearings ("DOAH"). On March 16, 2010, HealthSouth filed a Notice of Voluntary Dismissal withdrawing its CON application. The Notice of Voluntary Dismissal is attached hereto as Exhibit A. On March 17, 2010, DOAH issued an Order Closing Files as a result of the voluntary dismissal. It is therefore ORDERED and ADJUDGED: The voluntary dismissal by HealthSouth and the withdrawal of its CON application are hereby acknowledged and accepted. The above-styled cases are hereby closed. DONE and ORDERED this ay of _ in Tallahassee, Florida. ,Q ,,Y ---' 2010, THOMAS W. ARNOLD, Secretary
Other Judicial Opinions A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW, WHICH SHALL BE INSTITUTED BY FILING THE ORIGINAL NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A COPY ALONG WITH THE FILING FEE PRESCRIBED BY LAW WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED.CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. or interoffice mail to the persons named below on this '7:1$-- day of 2, :2_ -.!-.:: ;::::--===:::: RICHARD J. SHOOP, Ag.....-T.--."--" lerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 412-36.3«:? COPIES FURNISHED TO: Charles A. Stampelos Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Mark A. Emanuele, Esquire Deborah S. Platz, Esquire Panza, Maurer & Maynard, P.A. Bank of America Building, Third Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308-6225 Counsel for HealthSouth Rehabilitation Hospital of Ocala, LLC Paul H. Amundsen, Esquire Susan L. St. John, Esquire Julia E. Smith, Esquire Amundsen & Smith, P.A. 502 East Park Avenue Post Office Drawer 1759 Tallahassee, Florida 32302 Counsel for Leesburg Regional Medical Center F. Philip Blank, Esquire Blank & Meenan, P.A. 204 South Monroe Street Tallahassee, Florida 32301 Counsel for Shands Teaching Hospital and Clinics, Inc. d/b/a Shands Rehab Hospital Richard Joseph Saliba, Esquire Assistant General Counsel Agency for Health Care Administration 2727 Mahan Drive, Building 3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) Janice Mills Facilities Intake Agency for Health Care Administration 2727 Mahan Drive, Building 3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail)
Conclusions Having reviewed the Amended Notice of Intent to Deny, the Amended Administrative Complaint, and the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named pursuant to Chapter 408, Part IJ, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Amended Notice of Intent to Deny, the Amended Administrative Complaint, the Administrative Complaint, and the Election of Rights forms (Composite Ex. 1). The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement!. (Ex. 2) Based upon the foregoing, it is ORDERED: Filed June 17, 2014 4:37 PM Division of Administrative Hearings 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. Lighthouse Inn North agrees as follows: a. The Notice of Intent to Deny letter is deemed superseded; b. A Change of Ownership application for an eligible provider shall be filed within 180 days of the execution of the settlement agreement; c. Lighthouse Inn North will pay the fine of $2,500.00 plus $237.00 survey fee' and $3,250.00 for a total of $5,987.00 before the Change of Ownership is complete, but not later than 90 days after the execution of the settlement agreement. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 ORDERED at Tallahassee, Florida, on this /3 day of Serena , 2014. Elizabeth Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. 1 Paragraph 4(c) of the Settlement Agreement contains a scrivener’s error. It indicates a survey fee of $500.00, but the correct survey fee amount is $237.00. CERTIFICATE OF SERVICE I CERTIFY that a true and corr persons by the method designated on this Jan Mills Facilities Intake Unit (Electronic Mail) as py of this Final Order was served on the below-named day of ’ a / foo Ws bo , 2014. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Finance & Accounting Revenue Management Unit (Electronic Mail) Alba M. Rodriguez, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Robert C. Wallach, Esq. Wallach Law, P.A. 4171 West Hillsborough Blvd. ~ Suite 9 Coconut Creek, Florida 33073 (U.S. Mail) Robert E. Meale Claude B. Arrington Administrative Law Judges Division of Administrative Hearings (Electronic Mail) Richard J. Saliba Presiding Officer Agency for Health Care Administration (Electronic Mail)
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Administrative Complaint is DISMISSED. ORDERED at Tallahassee, Florida, on this Zz. Z day of Mowe , 2014. etary e Administration Filed April 11, 2014 4:10 PM Division of Administrative Hearings
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct c of this Final Order was served on the below-named persons by the method designated on this 5/>*day of _ Abers , 2014. oop, A Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Thomas J. Walsh II Office of the General Counsel Anna G. Small, Esq. Allen Dell, P.A. Agency for Health Care Administration 202 South Rome Avenue (Electronic Mail) Tampa, Florida 33606 (U.S. Mail) Linzie F. Bogan Administrative Law Judge Division of Administrative Hearings (Electronic Mail) ce: State Survey Agency State Medicaid Agency Medicare Administrative Contractors Jackie Glaze, DMCHO, ARA Stephanie M. Davis, LTCCEB Manager NOTE TO THE MEDICARE ADMINISTRATIVE CONTRACTORS: This letter replaces the CMS-2007, Provider Tie-In Notice
Conclusions THIS CAUSE came on for consideration before the Agency for Health Care Administration (“the Agency”), which finds and concludes as follows: 1. The Agency issued the Petitioner (“‘the Applicant”) the attached Notice of Intent to Deny (Ex. 1). The parties entered into the attached Settlement Agreement (Ex. 2), which is adopted and incorporated by reference. 2. The parties shall comply with the terms of the Settlement Agreement. If the Agency has not already completed its review of the application, it shall resume its review of the application. The Applicant shall pay the Agency an administrative fee of $2,000.00 within 30 days of the entry of this Final Order. A check made payable to the “Agency for Health Care Administration” containing the AHCA number(s) should be sent to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 ORDERED in Tallahassee, Florida, on this_J_ day of frente , 2014. Elizabeth Dudek, Agency for Health/Care Administration Filed June 11, 2014 2:14 PM Division of Admfnigtrative Hearings
Other Judicial Opinions A party that is adversely affected by this Final Order is entitled to seek judicial review which shall be instituted by filing one copy of a notice of appeal with the agency clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE named persons/entities by the method designated on this (day of Uw , 2014. [onl Richard Shoop, Ageficy Clerk Agency for Health Care Administration 2727 Mahan Drive, MS 3 Tallahassee, Florida 32308 Telephone (850) 412-3630 I HEREBY CERTIFY that a true and correct copy of this Final (os was served on the below- David J. Menkhaus Bradford C. Herter KZMSS Again, LLLP d/b/a TLC Outpatient Assistant General Counsel Surgery and Laser Center Office of the General Counsel 201 West Guava Street Agency for Health Care Administration Lady Lake, Florida 32159 (Electronic Mail) (U.S. Mail) Jan Mills Finance and Accounting Facilities Intake Unit Revenue Management Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) L_ Jay Adams, Esq. Broad and Cassel 215 South Monroe Street, Suite 400 Tallahassee, Florida 32302 (U.S. Mail) Page 2 of 2
Findings Of Fact The Prehearing Stipulation filed by the parties included stipulated facts which are found as follows: Petitioner's 1988 budget amendment request was timely filed. HCCB staff preliminary findings and recommendations were timely provided to Petitioner. Petitioner timely filed objections and requested a hearing regarding staff's preliminary findings and recommendations. Petitioner's original 1988 budget was subject to automatic approval and was automatically approved. The Petitioner, Memorial Medical Center of Jacksonville (hereinafter Petitioner or Memorial) is a 353-bed not-for-profit hospital located in Jacksonville, Florida. Memorial is a full service, acute care hospital, which offers a wide range and high level of medical services and is involved in efforts to improve services, and to contain costs. Health South, Inc., is the parent corporation of Memorial. Other subsidiary corporations of Health South, Inc., which are relevant to this matter, include Memorial Regional Rehabilitation Center, a 128-bed, full service rehabilitation center, and HSI Support systems, Inc., which provides financial support and other services to Memorial. Health South, Inc., Memorial, Memorial Regional Rehabilitation Center, and HSI Support Systems, Inc., are related parties for purposes of HCCB reporting requirements. Memorial's administrator, Mark Mrozek, reports to the president of Health South, Inc. Memorial's vice-president of finance, Martin Gutkin, reports to a senior vice-president of Health South, Inc. Memorial's fiscal year runs from May 1 to April 30. Memorial's fiscal year 1988 budget covered the period from May 1, 1987, through April 30, 1988. Preparation of the FY 1988 budget began in mid-August of 1986, therefore, only three to four months of actual data from FY 1987 were available for use in preparing the FY 1988 budget. The gross revenue per adjusted admission (hereinafter GRAA) which was automatically approved by the HCCB for Memorial in its original 1988 budget was $5,816. Memorial implemented a rate increase of between 8.1 percent to 8.3 percent in May 1987. On December 23, 1987, Memorial filed a request to amend its budget. In the amendment, Memorial requested an increase in its GRAA of $556, which would increase Memorial's GRAA to $6,372. The amendment requested by Memorial was reviewed by Judy Cooper, an analyst employed by the HCCB. Ms. Cooper's analysis was reviewed by Terry Richardson, a Regulatory Analyst Supervisor, and James Bracher, HCCB Executive Director, both of whom approved her analysis. The maximum allowable rate of increase for the FY 1987 through FY 1988 period was 8.3 percent, as determined by the HCCB pursuant to the applicable statute. The FY 1988 budget amendment requested by Memorial was in excess of 8.3 percent. In its request for approval of its budget amendment, Memorial identified a number of increased costs which, according to Memorial, provided justification for the request. The Petitioner identified an increase in outlier experience beyond what was projected for the original 1988 budget as a justification for the budget amendment. An outlier is a hospital patient whose length of stay or cost of medical treatment exceeds the range established by Medicare as normal or the level of reimbursement applicable for a particular diagnosis. It is not possible to predict with any degree of certainty, the types of patients or types of illnesses that a hospital will experience from year to year, or the length of time it will take to treat those illnesses. For example, the fact that a hospital could have 1,000 outliers two years ago and 1,500 outliers last year, does not indicate that the hospital could expect 2,000 outliers this year. The HCCB staff methodology for projecting outlier experience for the purpose of budget amendments is to project the ratio of outlier to total cases actually experienced by the hospital from the beginning of its current fiscal year to the remaining portion of the fiscal year covered by the budget amendment. In other words, a hospital is permitted to project outlier experience consistent with that which it has experienced from the beginning of its fiscal year to the point of amendment. Memorial proposes, and in its requested budget amendment attempted, to project outliers based on the rate of change in outliers experienced between the first and second six month period of FY 1987. In recent years Memorial has experienced a fluctuation in its outlier experience with a larger proportion of outliers occurring in the second half of the fiscal year. The fiscal year 1987 outlier data which Memorial used to project 1988 outliers in its budget amendment request reflects a greater rate of change between the first and second year halves in 1987 than Memorial has experienced in other years. Had Memorial used the rate of change in outliers it experienced in 1986 to calculate its amended request, a smaller request for outlier case credit would have resulted. The unpredictability of projecting outliers indicates that Memorial's methodology is not more reasonable than the methodology employed by HCCB staff. There are two mechanisms which protect the Petitioner from being unfairly impacted by the staff methodology. Credit for outliers is available retrospectively to the Petitioner. In other words, if actual outliers exceed predicted outliers, the HCCB permits a revision of the entire year's outlier projection to reflect the actual outliers in a hospital. Further, if a hospital's revenue exceeds its budgeted revenue because of changes in outlier cases, any penalty which may be applied against the hospital for exceeding approved revenue limits would be reduced or eliminated by crediting the increase in outlier experience against the penalty. Accordingly, hospitals may recover any outlier credits to which they are entitled. Utilizing the detailed outlier data submitted by Memorial and the HCCB methodology in projecting outliers, HCCB staff calculated that Memorial was entitled to additional GRAA of $87 based on its increase in outliers. Memorial is entitled to $87 in additional GRAA applied retroactively from the beginning of FY 1988. In its 1988 budget amendment request, Memorial indicated that it was projecting an increase in insurance expense related to increased malpractice insurance and requested additional GRAA of $21. At hearing, Memorial indicated it does not now anticipate that this increase will occur. Memorial is not entitled to any related GRAA adjustment. In its requested budget amendment, Memorial sought additional GRAA for an increase in pharmacy revenue. HCCB staff policy is to deny requests for increased GRAA for pharmacy revenue because pharmacy revenue is viewed as "an effect, rather than a cause." In other words, the staff policy classifies increased pharmacy revenue as a reflection of increased case mix and outlier- related revenue for which credit is already provided. The policy is reasonable. To provide credit for both an increase in pharmacy revenue and an increase in outlier and case mix revenue would constitute double credit. Memorial did not dispute this policy, therefore, Memorial is not entitled to additional GRAA related to these pharmacy revenues. In its requested budget amendment, Memorial submitted information related to changes in Medicare reimbursement policy, which related to changes in the "blended rate" and the "capital pass through rate." Memorial requested additional GRAA of $58 related to Medicare program changes. The staff agreed that Memorial was entitled to the full $58. Accordingly, Memorial is entitled to receive the adjustment, which is credited prospectively from the time of the filing of the budget amendment. As further justification for the requested budget amendment, Memorial sought additional GRAA for increases in Medicaid contractuals and HCCB staff agreed that it was appropriate. Utilizing the HCCB staff methodology as applied to data provided by Memorial, additional GRAA of $1 results. Memorial is entitled to the additional GRAA, applied prospectively from the date of the filing of the budget amendment. Memorial, in its requested budget amendment, sought additional GRAA of $24 based on an increase in its level of charity/uncompensated care. After clarifying information was provided to HCCB staff, the request for the $24 in GRAA was approved. Memorial is entitled to the additional GRAA, applied prospectively from the date of the filing of the budget amendment. During the period of time in which the HCCB staff was reviewing Memorial's requested amended budget, Memorial submitted information related to an increase in its case mix index during FY 1988. The HCCB and Memorial agree that Memorial has justified $137 in additional GRAA to which the Petitioner is entitled, applied retrospectively from the beginning of the fiscal year. Memorial originally requested additional GRAA of $48 based on interest expense of approximately $500,000 related to the acquisition of new equipment. Memorial subsequently withdrew its request for this expense item. Accordingly, no additional GRAA is appropriate. Memorial sought, in its requested budget amendment, additional GRAA for the impact of increased costs associated with the drug, tissue plasmogen activator, which is used in the treatment of cardiac patients. HCCB staff agreed with the request. Application of staff methodology results in additional GRAA of $7. Memorial also provided information to HCCB staff related to the use of isoview contrasting during the course of cardiac procedures. HCCB staff also agreed with this request. Utilizing HCCB staff methodology results in additional GRAA of $26 based on the increased cost of the application of this new drug. Both adjustments are applied prospectively from the date of the filing of the amended budget. At the hearing, Petitioner provided testimony related to $2,058,900 in additional expenses which were not reported in the original budget. Such expenses included increased costs related to nursing, quality assurance programs, and various efforts to improve efficiency. Other expenses were related to employee programs, additional hospital services, a generator repair and a tax related to the recently adopted medical malpractice tax. Some of the additional expenses were reflected in the 1988 amended budget requested by Petitioner, others were not. During the hearing, no evidence was introduced to support the claimed additional expenses. Based on the absence of admissible supporting evidence, and the inability to allocate those costs in an appropriate manner between the pre- amendment and post-amendment periods, no finding can be made relative to the $2,058,900 in additional expenses which were claimed at the hearing. The Hospital Cost Containment Board has established policy which governs the examination of related party transactions during the budget review process. As authorized by the HCCB, Mr. Bracher expressed and explained the HCCB policy. The Respondent has recently promulgated rules which are the result of approximately one year's experience during which time the board's non-rule policy has evolved. The Respondent's treatment of related party transactions is similar to the treatment accorded to any other cost. Related party transaction expenses which are disallowed are deducted from total expenses in computation of appropriate revenue levels. The HCCB policy regarding related party transactions has resulted in the examination of other hospital's related party transactions and has been at issue in other litigation involving the HCCB. Worksheet D-3-2 of the Florida Hospital Uniform Reporting System (FHURS) Manual, incorporated by reference in Rule 10N-1.018, Florida Administrative Code, requires that a hospital report the cost it pays to related parties for services, facilities and supplies furnished to the hospital by related parties. The worksheet requires that if such costs are in excess of "the amount a prudent and cost conscious buyer would pay for comparable services, facilities, or supplies that could be purchased elsewhere," an explanation of the cost is required. Memorial projects to pay HSI Support Systems, Inc., $1,653,274 in rental payments during the FY 1988 period. The cost to HSI Support Systems, Inc., for the same rental payments is $866,774. The difference between the rental payments by Memorial to HSI Support Systems, Inc., and the related cost to HSI Support Systems, Inc., is $786,500. Memorial provided no information which could identify the specific goods or facilities for which rental expense to Memorial was incurred, thus there is no information which would lead to a finding that the difference is reasonable. The $786,500 difference between the rental payment made by Memorial and the related cost to HSI Support Systems is unreasonable and should be deducted from allowable expenses in the HCCB computation of permissible revenue levels. Memorial projects total depreciation expense during FY 1988 of $3,684,512. Health South, Inc., and HSI Support Systems, Inc., project combined depreciation expense of $3,184,512 during the same period. The difference between the depreciation expense of Memorial and the depreciation expense of Health South, Inc., and HSI Support Systems, Inc., is $500,000. (R 1) The HCCB provided no information, beyond noting the difference between the stated depreciation expenses, which would indicate that such depreciation was related to services, facilities, and supplies provided to the Petitioner by related parties, as stated in the rule. Although Memorial, in responding to the Interrogatories of the Public Counsel (R 1), indicated that these depreciation figures may result in payments to related organizations, there was no specific evidence introduced as to what was being depreciated and under what circumstances such depreciation could result in payments to related parties. No finding is made related to depreciation. The HCCB did not introduce any evidence which would lead to a presumption that the depreciation was unreasonable. Depreciation is a method of allocating an asset's cost over the period of the asset's useful life. It is generally a non-cash expense. There was no evidence introduced at hearing which indicated that any payment of expenses would actually be made or was expected to be made. Memorial projects to pay to Health South, Inc., a sum of $1,644,187 for management services during the FY 1988 period. The related cost to Health South, Inc., is $1,927,614. The cost to Health South, Inc., is $283,427 greater than the charge to Memorial. Although, HCCB staff asserted at hearing that the $283,427 could be treated as a credit to Memorial, there is insufficient evidence to support a finding that such treatment methodology is appropriate. Subsequent to the filing of the Petitioner's request to amend its original FY 1988 budget, the HCCB further amended the FHURS manual (incorporated by reference, Rule 10N-1.018, Florida Administrative Code, amendment filed February 29, 1988) to specifically address the issue of interest paid between related parties. The rule was not applicable at the time Petitioner filed the request to amend the FY 1988 budget. The board's non-rule policy, as it has evolved during the past year, and which is now codified by the rule, is that interest paid to related parties is reviewed to determine whether the interest rate is reasonable in light of market conditions which existed at the time the obligation through which the interest is paid was incurred. The board presumes that any interest paid by a hospital to a related party, which exceeds the cost to the related party for the same funds, is unreasonable. The HCCB policy requires that the hospital establish the need for and reasonableness of interest charged by a related party which exceeds the cost to the related party. In 1983, Health South, Inc., received $45,000,000 as proceeds from the sale of a fixed rate bond issue. The funds were used in part to construct hospital facilities. Health South, Inc., is a cost-effective negotiator for the use of funds. The interest rate charged to Health South, Inc., approximately 9.8 percent, is found to be reasonable. The relevant interest amount on the bonds to be paid by Health South, Inc., during Memorial's FY 1988 period is $4,261,495. (R 1) Memorial projects to pay to Health South, Inc., $7,584,576 in short- term interest related to the bonds during FY 1988. The interest is allegedly paid pursuant to a 31 year "lease" to Memorial from Health South, Inc., on the 500,000 square feet which constitutes the hospital facility used by Memorial. Although at hearing, the arrangement giving rise to the short term interest was characterized by Memorial as a lease, it is not so identified in Memorial's responses to the Intervenor's interrogatories, where it is identified as an interest expense. Memorial did not introduce evidence of any agreement which would indicate that the expense is in fact a lease payment. The characterization of the arrangement as a lease arrangement is rejected. It is treated for the purposes of this finding as an interest expense. Based on the amount of interest being paid by Memorial to Health South, Inc., the imputed interest rate upon which the payment by Memorial to Health South, Inc., is based is approximately 14.5 percent. The difference between the interest charges to Memorial by Health South, Inc., and the related interest cost to Health South, Inc., is $3,323,081. Memorial projects to pay HSI Support Systems, Inc., $228,912 in interest during the FY 1988 period. The interest cost to HSI Support Systems, Inc., for the amount of funds loaned to Memorial is $140,523. The difference between the interest charges to Memorial by HSI Support Systems, Inc., and the interest cost to HSI Support Systems, Inc., for the same funds is $88,389. The total interest projected to be paid by Memorial to related parties is $7,813,488 ($7,584,576 to Health South, Inc., plus $228,912 to HSI Support Systems, Inc.). The interest cost to related parties for the same funds is $4,402,018 ($4,261,495 to Health South, Inc., plus $140,523 to HSI Support Systems, Inc.). The difference in total interest charges to Memorial and the interest cost to related parties is $3,411,470. Memorial did not introduce evidence which would lead to a finding that such interest as is charged to Memorial is reasonable. There was no evidence which indicated that Memorial would not have been able to obtain the same interest rate that Health South, Inc., obtained. Accordingly, the $3,411,470 difference between the interest paid by Memorial and the cost to related parties is unreasonable and should be deducted from allowable expenses in the HCCB computation of permissible revenue levels. Memorial provides services in excess of $2,000,000 annually to Memorial Rehabilitation Center. Memorial bills such services at its cost, charging no mark-up to the Rehabilitation Center. Some of the services provided by Memorial to the Rehabilitation Center may be provided for less than Memorial's cost. The effect of the expenses charged to Memorial for funds, facilities or services provided by related parties in which the charge to Memorial exceeds the cost of the funds, facilities, or services to the related parties, is to increase the total expenses of Memorial. The effect of Memorial's provision of services to related parties at Memorial's cost is to reduce the total revenue of Memorial. The effect of disallowing expenses in Memorial's budget is to reduce levels of allowable gross revenue per adjusted admission. The reason is that disallowing such expenses reduces the underlying costs which influence the need for revenue. Memorial is in HCCB group 8. (T 207) There are 19 hospitals in group Hospitals are grouped to provide a meaningful basis for comparison. Relative to the other hospitals in group 8, Memorial ranked first in the amount of interest expense budgeted. In the computation of the GRAA level, HCCB staff stated that the appropriate methodology which should be applied in deducting, from allowable expenses, those expenses which are not found to be reasonable, is to equally divide the expenses into two periods, the "actual" period which extends from May 1, 1987, to October 31, 1987, and the "projected" period which extends from November 1, 1987, to April 30, 1988, and then remove one half of the disallowed expenses from each period. The methodology utilized to remove the disallowed expenses from Memorial's budget is reasonable. One of the statistical measures used by the HCCB to determine the appropriateness of hospital revenue and expenses is operating margin. The operating margin is a source of funds which may be used by a hospital to make capital expenditures. Memorial states that it experienced an operating loss in FY 1987, due primarily to problems related to reimbursement under prospective payment systems. In other words, losses were related to the fact that under prospective payment systems (in which a specific reimbursement level is established based on type of diagnosis) Memorial's reimbursement levels were not sufficient to cover the expense. However, there were additional factors in the FY 1987 loss which were not identified at hearing. In the requested budget amendment, Memorial requested an approved GRAA of $6,372 which results in an operating margin of 0.9 percent (P-1). Memorial asserts that the 0.9 percent operating margin is reasonable (P-1). According to Memorial, the average operating margin for hospitals in group 8 is 5.19 percent (P-4). Assuming that the GRAA level was approved at the level requested by Memorial and that all related party expenses were excluded from Memorial's allowable expenses, Memorial's operating margin for FY 1988 would be 5.9 percent. Assuming that the Petitioner's originally requested GRAA level was reduced to the staff recommended level, and that all related party expenses were deducted from Memorial's allowable expenses, the operating margin for FY 1988 would be .06 percent. Two hospitals in group 8 have negative operating margins (P-4). An operating margin of .06 percent, while not an acceptable margin for an extended period, would not be detrimental to a hospital's survival for a period of one or two years and under the circumstances in this case is reasonable. Memorial's operating margin is between .06 and 5.9 percent. An operating margin of .06 percent is reasonable, as is an operating margin of 5.9 percent. Accordingly, an operating margin which falls within that range is reasonable. In light of the unreasonable expenses charged to Memorial by related parties and the failure of Memorial to increase revenue through charges for services provided to the Rehabilitation Center, the operating margin of Memorial is found to be reasonable. The HCCB does not have the authority to force a hospital to renegotiate or otherwise alter a previously existing financial arrangement between a hospital and another entity and it is not doing so here. The HCCB does have the authority to disallow inappropriate expenses in reviewing the proposed budget of a hospital. The HCCB does not consider that the disallowance of certain expenses is a penalty in the sense of the meaning of the term "penalty" as provided in the statute.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the HCCB amend and adopt a budget for Petitioner's FY 1988 period which contains gross revenue per adjusted admission and net revenue per adjusted admission levels reflecting the following: A total of $4,197,970 in related party expenses should be disallowed and deducted from the Petitioner's allowable expenses and in establishing the HCCB-approved revenue levels. Credit should be given in the amount of $340 gross revenue per adjusted admission due to increased expenses related to outliers, case mix, Medicare program changes, Medicaid contractuals, additional charity/uncompensated care costs, and administration of TPA and Isoview contrast drugs. The net revenue per adjusted admission should be amended to reflect the same credit. DONE and ORDERED this 15th day of April 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 15th day of April 1988. APPENDIX The following constitute rulings on the proposed findings of fact which were contained in proposed recommended orders filed by the parties: Petitioner: 1-3. Accepted. 4. Accepted insofar as necessary for purpose of identifying relevant related parties. 5-8. Rejected. Characterization as "lease" is not supported by the evidence, including Petitioner's identification of expense as "interest" in documentation. Accepted, generally, in reference to increasing costs associated with operation of hospital. Use of word "skyrocketed" is rejected. Accepted. Accepted, generally, in reference to Memorial's attempts to monitor costs. Use of word "leader" is rejected. Accepted. Rejected, this is merely restatement of witness testimony. Accepted. Rejected, restatement of testimony. Rejected, restatement of testimony. Hospital could increase revenue in other ways in order to reduce cost of services. Accepted. Accepted, generally, insofar as costs associated with operation of a hospital continue to increase. 19-20. Accepted. Accepted, reflected in specific credit items sought by Memorial. Accepted. COPIES FURNISHED: W. David Watkins, Esquire OERTEL & HOFFMAN, P.A. Post Office Box 6507 Tallahassee, Florida 32314 David R. Terry, Esquire Gary Walker, Esquire Hospital Cost Containment Board Building L, Suite 101 325 John Knox Road Tallahassee, Florida 32303 John M. Knight, Esquire Office of the Public Counsel 624 Fuller Warren Building Tallahassee, Florida 32303 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
Conclusions Having reviewed the Amended Administrative Complaint ant the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Amended Administrative Complaint and the Administrative Complaint and Election of Rights forms to the Respondent. (Composite Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $18,500.00. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 Filed April 17, 2014 3:12 PM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this_ Z@ day of Cort , 2014. Elizabeth Dudxk, Secretary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct gps of this Final Order was served on the below-named persons by the method designated on this ik. day of / , 2014. a ay X\ OOP, Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting ~ | Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Alba M. Rodriguez, Senior Attorney Peter A. Lewis, Esq. Office of the General Counsel Law offices of Agency for Health Care Administration Peter A. Lewis, P.L. (Electronic Mail) 3023 North Shannon Lakes Drive - Suite 202 Tallahassee, Florida 32309 (U.S. Mail) Cathy M. Sellers Administrative Law Judge [Division of Administrative Hearings (Electronic Mail) STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2012011203 ; v. ISLF WESTCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. AMENDED ADMINISTRATIVE COMPLAINT" COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”), by and through the undersigned counsel, and files this Amended Administrative Complaint against ISLF Westchester of Sunrise, LLC d/b/a Westchester of Sunrise (hereinafter “Westchester of Sunrise”), pursuant to Chapter 429, Part I, Chapter 408, Part Il, and Section 120.60, Florida Statutes (2011), and alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine of $5,000.00 pursuant to Sections 429.14 and 429.19, Florida Statutes (2011), for the protection of public health, safety and welfare, and to impose a survey fee in the amount of $500.00 pursuant to Section 429.19(2)(c) and 429.19(7), Florida Statutes (2011). L The Amended Administrative Complaint is being issued to reflect the revised sanctions imposed by the Agency. Coellae TE EXHIBIT 1 JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2011), and Chapter 28-106, Florida Administrative Code (2011). 3. Venue lies pursuant to Rule 28-106.207, Florida Administrative Code (2011). PARTIES 4. AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Chapter 408, Part II, Florida Statutes (2011), and Chapter 58A-5 Florida Administrative Code (2011). 5. Westchester of Sunrise operates a 150-bed assisted living facility located at 9701 W. Oakland Park Blvd., Sunrise, Florida 33351. Westchester of Sunrise is licensed as an assisted living facility under license number 7440. Westchester of Sunrise was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes, COUNT I WESTCHESTER OF SUNRISE FAILED TO ENSURE RESIDENTS LIVE IN A SAFE ENVIRONMENT SECTION 429.28, FLORIDA STATUTES RULE 58A-5.0182(6), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE — FACILITY PROCEDURES STANDARDS) CLASS If VIOLATION 6. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 7. Westchester of Sunrise was cited with one (1) Class II deficiency as the result of a revisit survey conducted on Aril 2, 2012. 8. Based on observation, record review, and interview, it was determined that the facility failed to ensure residents live in a safe and decent living environment and with due recognition of personal dignity, for 1 resident. (Resident #1) The findings include the following. 9. During an interview on 4/2/12 at 10:30 AM with Resident #1, the resident's room was observed in disarray. Empty food containers were on the resident's side table beside her nebulizer, food was in the draws of the wall unit, and in a box on the table. The resident's clothes were hanging on rods in broken boxes in the corner of the room. Four unidentified pills in a plastic bag were noted on the bedside table, and an empty insulin bottle and 4 empty pill bottles on the counter in the bathroom. The floor in the room was also soiled. 10. The resident stated she felt like nobody likes her, staff is mean, and nobody ever comes to check on her. The resident also stated she is missing medication, the aides don't shower her, and she feels like "the staff are mad at me". Then the resident began crying. 11. At 10:35 AM on 4/2/12, the call light was tested and pressed by the surveyor with the facility manager present. Fifteen minutes later, at 10:45 AM, the call light was answered. The call light was answered by a med tech, who stated nobody was in the medication room when the light went off so they did not see it. 12. During an interview on 4/2/12 at 11:40 AM with the 2 facility med techs, they stated resident #1 does not have any home health services and self-administers their medications. The med techs also stated they did not store any of the resident's medications and they should all be kept in her room. At that time observation was made of the call light system which is located inside the first floor medication room/nurse station. If no staff is present in this room, there is no way to know if a resident activates the call system. 13. A review of resident #1's record revealed an admission date of 1/31/11 and a diagnosis to include diabetes, renal insufficiency, and asthma. The AHCA form 1823 dated 1/26/11 documents the residents need for assistance with medications. The AHCA form 1823 dated 2/17/12 documents the resident's need for assistance with bathing and need for help taking their medications. The form did not document if the resident needs assistance with self- administration or medication administration. 14. The resident's medication observation record (MOR) for February through April 2012 was reviewed and included the following medications: Lantus 100 units/ml vial inject sub- Q 25 units 3 times a day, "Home Health Care". Iprat-Albut .5-3(2.5) mg use 1 vial via nebulizer twice daily. Wellbutrin XL 150 mg 1 tablet daily. Glipizide 10 mg 1 tablet daily. Singulair 10mg 1 tablet daily. Bupropion hel 150mg 1 tablet twice daily. 15. | The MOR's were blank. The facility did not document resident #1 had refused or received their medications as ordered by the physician for 14 months. A plan of care for skilled services to administer the resident's insulin was requested as well as the home health record. The facility manager stated the resident does not receive home health services and the facility has not been monitoring the resident's diabetes. 16. Further review of the record did not contain physician's orders for the resident to self-administer any medications, or documentation the resident was being assisted with bathing. There was no evidence the facility notified the physician with any concerns. 17. During an interview on 4/2/12 at 2:40 PM with the facility manger and Resident #1 in their room, the resident stated she gives herself the insulin 2 or 3 times a day depending on what she eats and does not check her glucose levels. At that time observation was made of 2 bottles of Lantus insulin in a plastic bag in the resident's refrigerator. The resident also stated she was missing medications, and needed to get to the bank because she did not have the money for the copayments. She reported the facility does not get her medications and was not in possession of any of the above listed medications. 18. During an interview on 4/2/12 at 4:00 PM with the facility manager and nurse consultant to review resident #1's record, it was confirmed the facility does not have a physicians order for resident #1 to self administer their medications. It was also confirmed the facility does not supply or store any of resident #1's medications. The facility could not provide documentation resident #1 had received any of their physician ordered medications from 2/1/11 through 4/2/12 or home health services as ordered by the physician for diabetic management. This is an uncorrected tag from survey on 12/21/11. 19. Based on the foregoing facts, Westchester of Sunrise violated Section 429.28 Florida Statutes, and Rule 58A-5.0182(6), Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $5,000.00. SURVEY FEE Pursuant to Section 429,19(7), Florida Statues (2011), AHCA may assess a survey fee in the amount of $500.00 to cover the cost of conducting initial complaint investigations that result in the finding of a violation that was the subject of the complaint or monitoring visits. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Westchester of Sunrise. 2. Assess an administrative fine of $5,000.00 against Westchester of Sunrise on for the violation cited above. 3. Assess a survey fee of $500.00 against Westchester of Sunrise for the violation cited above. 4. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 5. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2011). Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Ti allahassee, Florida 32308. Alba M. ee Bs i Fla. Bar No.: 0880175 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 53” Street Suite 300 Miami, Florida 33166 305-718-5906 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. — Suite 500 Delray Beach, Florida 33484 (U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished via electronic mail palewis@petelewislaw.com, Peter A. Lewis, Esq., Attorney for Respondent, 3023 N. Shannon Lakes Drive, Suite 101, Tallahassee, Florida 32309 on this 13" day of February, 2014. Alba M. 2 Rediaatae STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: ISLF Westchester of Sunrise, LLC d/b/a AHCA No.: 2012011203 Westchester of Sunrise ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive my right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) | I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3) ___—=i dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Floriaa Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28- 106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. Fax No. Email(optional) Thereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2012001196 Return Receipt Requested: v. 7009 0080 0000 0586 7599 ISLF-WESTHCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. ADMINISTRATIVE COMPLAINT COMES NOW State of Florida, Agency for Health Care Administration (“AHCA”), by and through the undersigned counsel, and files this administrative complaint against ISLF-Westchester of Sunrise LLC d/b/a Westchester of Sunrise (hereinafter “Westchester of Sunrise”), pursuant to Chapter 429, Part I, and Section 120.60, Florida Statutes (2011), and alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine of $13,000.00 pursuant to. Sections 429.14 and 429.19, Florida Statutes (2011), for the protection of public health, safety and welfare JURISDICTION AND VENUE 2. This Court has jurisdiction pursuant to Sections 120.569 and 120.57, Florida Statutes (2011), and Chapter 28-106, Florida Administrative Code (2011). 3. Venue lies pursuant to Rule 28-106.207, Florida Administrative Code (2011). PARTIES 4, AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing assisted living facilities pursuant to Chapter 429, Part I, Florida Statutes (2011), and Chapter 58A-5 Florida Administrative Code (2011). 5. Westchester of Sunrise operates a 150-bed assisted living facility located at 9701 W. Oakland Park Blvd., Sunrise, Florida 33351. Westchester of Sunrise is licensed as an assisted living facility under license number 7440. Westchester of Sunrise was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes. COUNT I WESTCHESTER OF SUNRISE FAILED TO PROVIDE PERSONAL SUPERVISION 1 DAILY OBSERVATION, AND GENERAL AWARENESS OF RESIDENT’ S WHEREABOUTS AND SAFETY WHICH RESULTED IN DEATH. RULE 58A~5.0182(1), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE SUPERVISION STANDARDS) CLASS I VIOLATION 6. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 7. Westchester of Sunrise was cited with two (2) Class I deficiencies and one (1) Class IT deficiency as the result of a complaint investigation survey that was conducted on December 21, 2011. 8. A complaint investigation survey was conducted on December 21, 2011. Based on record review and interview, it was determined that the facility failed to provide personal supervision, daily observation, and general awareness of a resident's whereabouts and safety, which resulted in death for one out of four sampled residents (resident #3). The findings include the following. 9. A review of the adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered on 11/11/11 unresponsive on the floor in a’ vacant room on the floor where he resided. During an interview on 12/21/11 at 2:45 PM with the Director of Nurses (DON) and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. 10. The risk manager also reviewed documentation from staff reporting resident #3 did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident's family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation, the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. The resident was discovered on 11/11/11 at approximately 12:20 PM in a vacant room across the hall from their room. 11. In interview on 12/21/11 at 3:45 PM the DON, risk manager, and administrator confirmed the facility does not have policies regarding resident supervision or resident safety related to vacant rooms. 12. A review on 1/13/11 of the police investigation dated 11/11/11 revealed a sworn statement taken from facility staff documenting staff was aware the resident liked to walk and was prone to falling. It was also documented that "No employees attempted CPR or to free him from his walker, nor. did any persons to her knowledge check for breathing or a pulse until the Sunrise FD arrived and performed their assessment." "It appears as if the decedent was confused...this was not the first time that the decedent wandered into another room thinking that is was his. No signs of forced entry, however, it appeared as if the decedent was possibly struggling to keep his balance thus knocking over some furniture." 13. A review of the medical examiner's report dated 11/12/11 identified the injury description as the decedent’s neck became caught in the walker and the cause of death as Asphyxia due to Cervical Compression. 14. Based on the foregoing facts, Westchester of Sunrise violated Rule 58A-5.0182(1), Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $6,000.00. COUNT II WESTCHESTER OF SUNRISE FAILED TO ENSURE RESIDENTS LIVED IN A SAFE ENVIRONMENT. SECTION 429.28, FLORIDA STATUTES RULE 58A-5.0182(6), FLORIDA ADMINISTRATIVE CODE (RESIDENT CARE RIGHTS & FACILITY PROCEDURES STANDARDS) CLASS I VIOLATION 15. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 16. A complaint investigation survey was conducted on December 21, 2011. Based on observation, record review, and interview, it was determined that the facility failed to ensure residents live in a safe environment, free from neglect which resulted in a death of a resident, for 1 of 4 sampled residents (Resident #3). The findings include the following. 17. Resident #3 was admitted to the facility on 9/24/11 with a diagnosis to include depression, anxiety, and he osteoporosis. A review of the AHCA form 1823 dated 9/15/1 documented the resident ambulates independently with a walker. A review of the facility resident summary sheet dated 9/24/11 documents the resident's need for partial assistance with a walker while ambulating. 18. Continued review revealed a physician order dated 11/9/11 for Tylenol 650 mg daily three times a day and a rib series "dx: S/P Fall" (diagnosis: status/post fall). Further review of the resident's record revealed no documentation regarding a fall. 19. A review of the medication observation record (MOR) documented resident #3 began taking Tylenol 325 mg 2 tabs three times a day on 11/10/11. During an interview on 12/21/11 at 11:30 AM with the risk manager, Director of Nurses (DON) and administrator, the facility was unable to determine when the resident had a fall. 20. During an interview on 12/21/11 at 12:00 PM with the physician and the physician assistant, who wrote the order on 11/9/11, she stated the resident was complaining of rib pain "he said he had fallen but did not say when". The physician stated she reviewed an old X-ray from a left rib fracture but since the resident was complaining of right rib pain and has a history of falls she ordered the rib series. 21. A review of the facility's adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered unresponsive on the floor in a vacant room. During an interview on 12/21/11 at 2:45 PM with the DON and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. The DON stated the door to vacant rooms should always be locked. During the interview, the maintenance director confirmed the facility had not done any work in the room between 10/3/11 & 11/11/11. The facility did not have a policy related to resident supervision or securing/monitoring vacant rooms. 22. The risk manager also reviewed documentation from staff reporting the resident did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident’s family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. The resident was discovered on 11/11/11 at approximately 12:20 PM in a vacant room across the hall from their room. 23. During the interview at 3:45 PM on 12/21/11, the risk manager confirmed the room was vacant and stated the headboard of the bed was not attached to the wall, the bed was falling off the frame, and the resident was found unresponsive on the floor beside the bed with their head entrapped between the bars of the walker. A telephone interview on 12/21/11 with the medical examiner, revealed the cause of death as Asphyxia due to Cervical Compression. 24. Based on the foregoing facts, Westchester of Sunrise violated Section 429.28, Florida Statutes, and Rule 58A- 5.0182(6), Florida Administrative Code, herein classified as a Class I violation, which warrants an assessed fine of $6,000.00. COUNT III WESTCHESTER OF SUNRISE FAILED TO IMPLEMENT THEIR ELOPEMENT RESPONSE POLICIES AND PROCEDURES. RULE 58A-5.0182(8), FLORIDA ADMINISTRATIVE CODE (ELOPEMENT PROCEDURE STANDARDS) CLASS II VIOLATION 25. AHCA re-alleges and incorporates paragraphs (1) through (5) as if fully set forth herein. 26. A complaint investigation survey was conducted on December 21, 2011. Based on record review and interview, it was determined the facility failed to implement their elopement response policy and procedure for 1 of 4 sampled residents (resident #3). The findings include the following. 27. A review of the adverse incident reports identified Resident #3 as an alert and oriented resident, who was discovered on 11/11/11 unresponsive on the floor in a vacant room on the floor where he resided at approximately 12:20 PM. During an interview on 12/21/11 at 2:45 PM with the Director of Nurses (DON) and risk manager, it was determined Resident #3 was found in a room that had been vacant since 10/3/11. 28. Based on record review with the risk manager, the facility had documentation from staff reporting resident #3 did not come down for morning medications or breakfast on 11/11/11. Continued review noted the facility contacted the resident’s family to ask if they had taken the resident from the facility. There is no evidence the facility implemented their elopement protocol. According to the facility documentation the last time a staff member saw resident #3 was 11/10/11 at 9:00 PM. 29. Based on the foregoing facts, Westchester of Sunrise violated Rule 58A-5.0182(8), Florida Administrative Code, herein classified as a Class II violation, which warrants an assessed fine of $1,000.00. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Health Care Administration against Westchester of Sunrise on Counts I, II, and III. 2. Assess an administrative fine of $13,000.00 against Westchester of Sunrise on Counts I, II, and TII for the violations cited above. 3. Assess costs related to the investigation and prosecution of this matter, if the Court finds costs applicable. 4. Grant such other relief as this Court deems is just and proper. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes (2011). Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the Agency for Health Care Administration, and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Tallahassee, Florida 32308. 10 RESPONDENT IS FURTHER NOTIFIED THAT THE FAILURE TO RECEIVE A REQUEST FOR A HEARING WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS COMPLAINT WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. If YOU WANT TO HIRE AN ATTORNEY, YOU HAVE THE RIGHT TO BE REPRESENTED BY AN ATTORNEY IN THIS MATTER Cewas mr. Races Alba M. Rodriguez} Esqa Fla. Bar No.: 0880175 Assistant General Counsel Agency for Health Care Administration 8333 N.W. 53%° Street Suite 300 Miami, Florida 33166 Copies furnished to: Arlene Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. ~ Suite 500 Delray Beach, Florida 33484 (U.S. Mail) 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Certified Mail, Return Receipt Requested to Gary Stephen Solomons, Administrator, Westchester of Sunrise, 9701 W. Oakland Park Blvd., Sunrise, Florida 33351 on this i2** aay of Opts , 2013. Alba M. ee ye" Zz ms 12 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: ISLF-Westchester of Sunrise, LLC d/b/a AHCA No.: 2012001196 Westchester of Sunrise ELECTION OF RIGHTS This Election of Rights form is attached to a proposed action by the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. Your Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Impose a Late Fee, Notice of Intent to Impose a Late Fine or Administrative Complaint. If your Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action by AHCA, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please use this form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) PLEASE RETURN YOUR ELECTION OF RIGHTS TO THIS ADDRESS: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308. Phone: 850-412-3630 Fax: 850-921-0158. PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Impose a Late Fine or Fee, or Administrative Complaint and I waive mny right to object and to have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)___I dispute the allegations of fact contained in the Notice of Intent to Impose a Late Fee, the Notice of Intent to Impose a Late Fine, or Administrative Complaint, and I request a formal hearing (pursuant to Subsection 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Section 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of your receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28- 106.2015, Florida Administrative Code, which requires that it contain: 1. Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any. 2. The file number of the proposed action. 3. A statement of when you received notice of the Agency’s proposed action. 4. A statement of all disputed issues of material fact. If there are none, you must state that there are none. Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees. License type: (ALF? nursing home? medical equipment? Other type?) Licensee Name: License number: Contact person: Name Title Address: Street and number City Zip Code Telephone No. ___Fax No. Email(optional) [hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Dates Print Name: Title: Late fee/fine/AC STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, AHCA No. 2012001196 Petitioner, DOAH No. 13-2452 vs. AHCA No. 2012011203 DOAH No. 13-3182 ISLF WESTCHESTER OF SUNRISE, LLC d/b/a WESTCHESTER OF SUNRISE, Respondent. SETTLEMENT AGREEMENT Petitioner, State of Florida, Agency for Health Care Administration (hereinafter the “Agency”, through its undersigned representatives, and Respondent, ISLF Westchester of Sunrise, LLC d/b/a Westchester of Sunrise (hereinafter “Respondent”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, Respondent is an Assisted Living Facility, licensed pursuant to Chapters 408, Part I], and 429, Part I, Florida Statutes, and Chapter 38A-5, Florida Administrative Code: and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Respondent, pursuant to Chapter 429, Part I, Florida Statutes; and WHEREAS, the Agency served Respondent with an administrative complaint on or about May 21. 2013, (on case #2012001 196), notifying the Respondent of its intent to impose adniinistrative fines in the amount of $13,000.00; and an amended administrative complaint on EXHIBIT 2 or about February 14, 2014, notifying the Respondent of its intent to impose administrative fines in the amount of 5,000.00, and a survey fee in. the amount of $500.00; and WHEREAS, Respondent requested a formal administrative proceeding by selecting Option 3 on the Election of Rights form: and WHEREAS, the parties have negotiated and agreed that the best interest of all the parties will be served by a settlement of this proceeding: and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: L. All recitals herein are true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Upon full execution of this Agreement, Respondent agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120.57(1), Florida Statutes, appeals under Section 120,68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court of competent jurisdiction; and agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled, provided, however, that no agreement herein shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 4. Upon full execution of this Agreement, Respondent agrees to pay $18,000.00 in administrative fines, and a survey fee in the amount of $500.00 to the Agency within thirty (30) days of the entry of the Final Order. 5. Venue for any action brought to enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie in Circuit Court in Leon County, Florida. ba 6. By executing this Agreement, Respondent neither admits nor denies, and the Agency asserts the validity of the allegations raised in the administrative complaint referenced herein. 7. No agreement made herein shall preclude the Agency from using the deficiencies from the surveys identified in the administrative complaint in any decision regarding licensure of Respondent, including, but not limited to, licensure for limited mental health, limited nursing services, extended congregate care, or a demonstrated pattern of deficient performance. The Agency is not precluded from using the subject events for any purpose. within the jurisdiction of the Agency. In such event, however, the Facility or its assigns or successors will be provided hearing rights pursuant to Chapter 120 to challenge the allegations made in this case. Further, Respondent acknowledges and agrees that this Agreement shall not preclude or estop any other federal. state, or local agency or office from pursuing any cause of action or taking any action, even if based on or arising from, in whole or in part. the facts raised in the administrative complaint. This agreement does not prohibit the Agency from taking action regarding Respondent's Medicaid provider status, conditions, requirements or contract. 8. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled case. 9. Each party shall bear its own costs and attorney's fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. Respondent for itself and for its related or resulting organizations, its successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the State of Florida, Agency for Health Care Administration, and its agents, representatives, and attomeys of and from all claims. demands, actions, causes of action. suits, damages, losses, and expenses, of any and every nature whatsoever. arising out of or in any way related to this matter and the Agency’s actions, including. but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, including any claims arising out of this agreement. by or on behalf of Respondent or related facilities. 12. This Agreement is binding upon all parties herein and those identified in paragraph eleven (11) of this Agreement. 13. In the event that Respondent was a Medicaid provider at the subject time of the occurrences alleged in the complaint herein, this settlement does not prevent the Agency from seeking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule $9G-9.070, Florida Administrative Code. 14. Respondent agrees that if any funds to be paid under this agreement to the Agency are not paid within thirty-one (31) days of entry of the Final Order in this matter, the Agency may deduct the amounts assessed against Respondent in the Final Order, or any portion thereof, owed by Respondent to the Agency ftom any present or future funds owed to Respondent by the Agency, and that the Agency shall hold a lien against present and future funds owed to Respondent by the Agency for said amounts until paid. 1S. The undersigned have read and understand this Agreement and have the authority to bind their respective principals to it. 16. This. Agreement contains and incorporates the entire understandings and agreements of the parties. 17. This Agreement supersedes any prior oral or written agreements between the parties. 18... This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 19. All parties agree that a facsimile signature suffices for an original signature. The following representatives hereby acknowledge that they are duly authorized to enter into this Agreement. Molly McKinytry Sheryl Adminisyrator Deputy Segrefary: Westchester of Sunrise Agency for Health Care Administration 9701 W. Oakland-Park Boulevard 2727 Mahan Drive, Bldg #1 Sunrise, Florida 33351 Tallahassee, Florida 32308 DATED: _&@ = 24-/f Stuart Williams, General Counsel Alba M. ante é q 4e Florida Bar No. 670731 Assistant General Counsel Agency for Health Care Administration 8333 NW 53” Street, Suite 300 2727 Mahan Drive, Mail Stop #3 Miami, Florida 33166 Tallahassee. Florida 32308 DATED: 3/3 6 / Ly DATED: —_ Péter A. Lewis, Esquire 2012 North Shanon Lakes Drive Suite 101 Tallahassee, Florida 323090 DATED: 3° 73-42! te
