Findings Of Fact Respondent Gulf Coast Home Health Services, Inc. is a corporation providing home health care services in several Florida counties. It has an office in Hernando County and also serves clients in Citrus County. It presently has no license to serve Citrus County and has no Subunit in Hernando County. Petitioner Department of Health and Rehabilitative Services notified Respondent on January 17, 1980 that it intended to enter a final order requiring Respondent to terminate its operations in the two counties, aid Respondent requested an administrative hearing. Respondent's home office is located in St. Petersburg, Pinellas County, Florida. It was licensed to serve an area including Pinellas, Pasco, Hillsborough and Hernando Counties until licensure in 1980-81, when Hernando County was omitted. It was then stipulated that Respondent could continue operations in Hernando County until the final order in this case. Respondent was licensed to serve said counties without obtaining a certificate of need inasmuch as Petitioner had determined that Section 400.504, Florida Statutes, was inapplicable to those counties in which there was service to the area previous to the effective date of the statute. Respondent first served Hernando County from its Pinellas County office, but after opening an office in Pasco County in April of 1979, it notified Petitioner that it was serving Hernando County from its Pasco County office. Petitioner wrote a letter to Respondent on April 28, 1978 stating that in view of the increased expansion of Gulf Coast Home Health Services, Inc. into Hernando County, a sufficient client population base in Hernando County, and because of the time and distance factors from Pinellas County to Hernando County, a "Subunit" must be established in Hernando County (Petitioner's Exhibit 2, page 17). Respondent replied to the April correspondence by letter dated October 20, 1978 that servicing of Hernando County bad been moved from Pinellas County to Pasco County and stated that Respondent, too, saw a need to establish an office in Hernando County (Petitioner's Exhibit 2, page 14). Thereafter, an office was opened in Brooksville, Hernando County, Florida, by Respondent, but no application for a Subunit was filed. By correspondence dated June 14, 1979 Petitioner notified Respondent that a certificate of need had been deemed not necessary but an application for a Subunit was necessary and should be filed by July 6, 1979, and that a survey would then be scheduled. No application was filed, and a Notice to Show Cause why the Respondent's license should not be modified was issued on August 23, 1979. Respondent took no action. The office that was established in Brooksville, Florida in April of 1979 is under the overall general supervision of an Associate Director of Nursing. The Associate is the supervisor of the staff in the office both as to patient care and the clerical processing of all office records. The Associate's duties include supervision of a variety of skilled professional nurses, physical therapists, speech therapists, occupational therapists, social workers, home health aides and homemakers as well as the supervision of clerical personnel. The field supervisor in St. Petersburg coordinates the care of patients from the hospital to the home and relays information regarding patient care from the patient's physician to the nursing supervisor in the Brooksville office, who in turn relays the information to the appropriate staff who visit the patient. Patient medical records and plans for treatment are kept in the Brooksville office except for the annual survey, when they are moved to the home office in St. Petersburg. Some billing and typing of progress notes for the Brooksville office is provided by the Respondent's office in New Port Richey before such records are sent to the home office in St. Petersburg, Florida. The distance from Brooksville in Hernando County to St. Petersburg in Pinellas County is approximately 63 miles. Pasco County, where Respondent has another office, is between Pinellas County arid Hernando County. The distance between the office site in New Port Richey and that of Brooksville is about 37 miles. The area is rapidly growing, and the traffic is often congested on the few highways. II. On August 26, 1976 the Program Coordinator for Home Health Services of the Department of Health and Rehabilitative Services stated in a letter to the president of Gulf Coast Home Health Services, Inc. that Respondent had agreed to assume care on an interim basis of the former patients of Alaris Home Health Care Agency, which had ceased operations in Citrus County, Florida. The letter further stated that if the staff of that agency were employed by Respondent they should be supervised from the central office of Gulf Coast Home Health Service, Inc. (Petitioner's Exhibit 3, pages 15-16). Respondent accepted the patients of Alaris in August of 1976 as well as other patients from Citrus County. It continued to serve patients from Citrus County but did not apply for a license to serve Citrus County and did not include that county on its applications for licensure for the other counties it served until 1980. In late 1978 or early 1979 the Director of the office of Licensure and Certification, Department of Health and Rehabilitative Services, received a complaint from Central Florida Home Health Agency, Inc. that Respondent was operating in Citrus County. The Director notified Respondent's Director that Gulf Coast Home Health Service, Inc. was not licensed to serve Citrus County and requested some action. On January 15, 1979 Respondent sent a memorandum to the Brooksville office in Hernando County instructing the staff to cease serving Citrus County and forwarded a copy of said memorandum to Petitioner. However, before the memorandum was effected Respondent's Director verbally rescinded his directive, without notifying Petitioner, and continued to serve patients in Citrus County (Petitioner's Exhibit 3; Transcript, pages 139-144) Central Florida Home Health Agency, Inc. has been issued a license to service Citrus County, and at present both that agency and Respondent are serving patients in Citrus County, Florida. Central Florida Home Health Agency, Inc. has requested the Department of Health and Rehabilitative Services to enjoin Respondent from its activities in Citrus County. Both parties submitted proposed findings of fact, memoranda of law and proposed recommended orders. These instruments were considered in the writing of this order. To the extent the proposed findings of fact have not been adopted in or are inconsistent with factual findings in this order, they have been specifically rejected as being irrelevant or not having been supported by the evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends that Respondent be required to cease its operations in Hernando County until and unless it is licensed as a Subunit. It is also recommended that Respondent terminate its operation in Citrus County until and unless it is licensed to serve said county. DONE and ORDERED this 5th day of September, 1980, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Robert P. Daniti, Esquire Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 Howard P. Ross, Esquire 980 Tyrone Boulevard Post Office Box 41100 St. Petersburg, Florida 33743
The Issue DOAH Case No. 02-4161: Whether Respondent's licensure status should be reduced from standard to conditional. DOAH Case No. 02-4160: Whether Respondent committed the violations alleged in the Administrative Complaint dated August 29, 2002, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: AHCA is the state agency responsible for licensure and regulation of nursing homes operating in the State of Florida. Chapter 400, Part II, Florida Statutes. Shell Point operates a licensed nursing home at 15701 Shell Point Boulevard, Fort Myers, Florida. The standard form used by AHCA to document survey findings, titled "Statement of Deficiencies and Plan of Correction," is commonly referred to as a "2567" form. The individual deficiencies are noted on the form by way of identifying numbers commonly called "Tags." A Tag identifies the applicable regulatory standard that the surveyors believe has been violated and provides a summary of the violation, specific factual allegations that the surveyors believe support the violation, and two ratings which indicate the severity of the deficiency. One of the ratings identified in a Tag is a "scope and severity" rating, which is a letter rating from A to L with A representing the least severe deficiency and L representing the most severe. The second rating is a "class" rating, which is a numerical rating of I, II, or III, with I representing the most severe deficiency and III representing the least severe deficiency. On June 3 through 6, 2002, AHCA conducted an annual licensure and certification survey of Shell Point to evaluate the facility's compliance with state and federal regulations governing the operation of nursing homes. The survey team alleged several deficiencies during the survey, only one of which is at issue in these proceedings. At issue is a deficiency identified as Tag N201 (violation of Section 400.022(1)(l), Florida Statutes, relating to a resident's right to adequate and appropriate health care and protective and support services, if available; planned recreational activities; and rehabilitative services consistent with the resident's care plan, with established and recognized practice standards within the community, and with rules as adopted by the agency). The deficiency alleged in the survey was classified as Class II under the Florida classification system for nursing homes. A Class II deficiency is "a deficiency that the agency determines has compromised the resident's ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being, as defined by an accurate and comprehensive resident assessment, plan of care, and provision of services." Section 400.23(8)(b), Florida Statutes. The deficiency was noted as "isolated" in scope. Based on the alleged Class II deficiency in Tag N201, AHCA imposed a conditional license on IHS, effective June 6, 2002. A follow-up survey was conducted by AHCA on July 9, 2002. AHCA found that Shell Point had corrected all deficiencies noted in the Form 2567, and the agency restored Shell Point's license rating to "standard" on July 9, 2002. The survey found one instance in which Shell Point allegedly failed to provide appropriate health care and protective services. The surveyor's observation on Form 2567 concerned Resident 14: N201 – 400.022(1)(l), F.S. Right to Adequate and Appropriate Health Care 400.022(1)(l) The right to receive adequate and appropriate health care and protective and support services, if available; planned recreational activities; and therapeutic and rehabilitative services consistent with the resident care plan, with established and recognized practice standards within the community, and with rules adopted by the agency. This Rule is not met as evidenced by: Based on observations, record review and staff interviews, the facility failed to provide care and protective services for 2 of 3 sampled residents (#14 and #15) on the second floor dementia unit. This is evidenced by the continued resident-to- resident altercations without facility staff providing on-going interventions, implementation of facility abuse policy, or development of a therapeutic plan of care. The findings include: During the initial tour of the second floor on 6/03/02 at approximately 9:30 AM, Resident #14 was identified by nursing staff as having "injured" another resident (#15) the night before (6/02/02). According to the nurses notes for Resident #15 on 6/02/02 at 1745 (5:45 PM) " (resident's name) was knocked to the ground by another resident. She hit her head and tore open the L (left) forearm. Her L. knee has a quarter-sized abrasion -– instantly swollen . . . had a small abrasion L. side of head –- ice applied." L. knee abrasion with obvious pain and swelling -– ice applied to knee also. Lg. (large) hematoma (bruise) from L. wrist to mid forearm with lg. deep skin tear. Skin reapproximated and steri-stripped –- dressed with telfa and Kling per Dr. ." The physician was called and noted the presence of a "contusion" of the L. parietal area (the head). Review of Resident #15's record showed a nurse's note dated 5/19/02 at 2100, "Hit in back of head by another resident for no apparent reason." Interview with nursing staff on 6/04/02 at approximately 11:00 AM revealed the resident had been struck by Resident #14 during this incident as well. However, no injuries were noted during this altercation. Review of facility Policy Related to "Abuse, Neglect, or Misappropriation of Property" dated 12/12/00 revealed "5. Should abuse be expected (suspected?) to be resident-to-resident initiated, the residents will be separated, the environment will be reviewed as to the stimuli that may have triggered a catastrophic response. . . . Corrections to the environment will be implemented, the residents will be evaluated for injury, the residents will be interviewed (where practicable)." Review of the clinical record for Resident #14 showed documentation in the nurse's notes for 6/02/02 of escalating behavior throughout the day i.e. "She has had one confrontation after another today with residents –- not staff." There is no documentation to indicate any interventions until resident #14 injured resident #15. Review of the plan of care (both current and past) showed no interventions for aggressive, assaultive behavior by this resident or environmental review for stimuli. Interview with the Social Worker on 6/04/02 at approximately 1:30 PM revealed no interventions had been planned or written by him for the aggressive behavior, although the psychiatric nurse had been called regarding reinstating the use of an antipsychotic medication. Interview with the R.N. in charge of the unit as well as the DON (Director of Nursing) revealed no changes in the plan of care had been implemented since the altercation. Further review of the clinical record for Resident #14 disclosed at least 12 other incidents since March 9th of 2002 in which the resident struck, slapped or pushed other residents (3/09, 4/07, 4/18, 4/21, 4/30, 5/03, 5/04, 5/13, 5/18, 5/19, 5/24, and 5/25). The resident's record revealed her to have "expressive aphasia due to CVA (Cerebrovascular Accident)" and to be moderately impaired for cognition. The resident was observed pacing around the 2nd floor dining unit and in the dining room for lunch on 6/04/02. She was minimally able to communicate with gestures. Review of the "Behavior/Intervention monthly Flow Record" showed the behaviors being monitored as the following: "Mood changes, Delusions, Depressed, and Compulsive." Interview with the DON on 6/04/02 at approximately 3:30 PM verified these "behaviors" were inappropriate for this resident, unable to be observed, and emotions unable to be verbalized by the resident. The clinical record and interviews with administrative nursing staff on 6/05/02 at approximately 3:30 PM revealed interventions at the time of an incident included 1:1 monitoring and removal to her room. Medication had been utilized but discontinued. There was no documented plan of care outlining interventions to prevent this resident from continuing to injure herself or others. Resident 14 was a 85-year-old female admitted to Shell Point on June 29, 2001. Her primary diagnoses on admission were anorexia, weight loss, and multiinfarct dementia, a form of organic brain disease that is indistinguishable from Alzheimer's disease in terms of treatment. Resident 14 had secondary diagnoses of hypertension and depression. Alzheimer's disease is a progressive disease. Its initial signs are usually confusion and short-term memory loss. As the disease progresses, the patient suffers greater overall loss of memory and reduced cognition. In the middle stages of the disease, the patient loses the ability to follow directions, to perform her activities of daily living and to take care of her own needs. Another common symptom of Alzheimer's disease is the loss of inhibition and social awareness. The loss of social awareness can cause the patient to invade the space of others, unaware of her effect on those around her. Another common effect of the progression of Alzheimer's disease is increased aggression, again the result of an inability to understand how one's actions affect others. Joan Cagley-Knight, AHCA's expert on Alzheimer's disease, estimated that at any given time, 20 percent to 40 percent of the residents in the Alzheimer's unit of a nursing home will demonstrate aggressive or violent behavior. Aggressive behavior in Alzheimer's residents cannot be eliminated, as it is simply a part of the progression of the disease. One way in which Alzheimer's patients are treated is to place them in secured, locked Alzheimer's units. Such units allow the residents greater freedom within the unit while allowing the nursing home to provide greater supervision. Secure Alzheimer's units also provide reduced stimulation for the residents, lessening the potential for extraneous sights and sounds to cause agitation. At the time of the survey, Shell Point's secure Alzheimer's unit, where all of the relevant incidents took place, consisted of 58 beds. Ms. Cagley-Knight testified that most special care units for dementia have a maximum of twenty beds. She opined that the larger size of Shell Point's unit made it more difficult to manage, because residents with Alzheimer's require more supervision and less stimulation in their environment than do healthy residents. Evidence at the hearing established that ambulatory residents were allowed to interact in the common areas of the Shell Point Alzheimer's unit, though always within sight of facility staff. Shell Point employed staff persons to work exclusively in the Alzheimer's unit, and assigned those staff persons to care for the same residents on each shift. These assignments allowed the staff to become familiar with each resident's needs, abilities, and behaviors. A nursing home's ability to deal with aggression in an Alzheimer's unit is limited. The facility cannot simply lock a resident in her room. Physical restraints tend to worsen the situation, and in any event violate the Resident's Bill of Rights, Section 400.022(1)(o), Florida Statutes, unless authorized by a physician or necessitated by an emergency. Among the permissible initial responses to aggressive behavior are redirection and increased supervision. If these responses fail to control the resident's aggressive behavior, the resident can be medicated, though the facility is required to maintain the use and dosage of psychotropic drugs at the lowest level practicable. Finally, if all else fails, an overly aggressive nursing home resident who presents an immediate threat to herself or others may be involuntarily committed to a mental health facility through the "Baker Act", Section 394.467, Florida Statutes. Ms. Cagley-Knight testified that a facility should do anything it can to avoid "Baker Acting" its residents, short of allowing one resident to hurt another. She stated that the decision as to "Baker Acting" a resident is a judgment call based on an evaluation of all the circumstances. At the time of her admission, Resident 14 was independent regarding her activities of daily living and required minimal care. Pamela Garcia, an LPN on the Alzheimer's unit, described Resident 14 as part of the "out and about" group, able to participate in outings and group activities. Over time, however, Resident 14 suffered cognitive decline and the symptoms of her dementia worsened. At one point, Resident 14 became overly protective and "motherly" toward her roommate, so much so that the facility had to separate the two women. Resident 14 then transferred her affections to a newly admitted male resident. She behaved very protectively toward him and became jealous when other female residents approached him. Eventually, Resident 14 adopted two more male residents for this jealous, protective behavior. Resident 15 was another female resident on the Alzheimer's unit. Due to her loss of inhibitions and lack of social awareness, Resident 15 would get physically close to other residents, much closer than is normally considered acceptable. When she would get too close to one of Resident 14's gentlemen friends, Resident 14 would become angry and would slap at Resident 15. As quoted above, the Form 2567 states that Resident 14 was involved in 12 incidents in which she "struck, slapped, or pushed other residents." Ms. Cagley-Knight, the surveyor who made the observations and findings as to Resident 14, conceded that most of the 12 incidents did not involve physical contact with another resident. Ms. Cagley-Knight maintained that the non-physical incidents, which involved taunting, arguing, and slapping at other residents without making contact, were nonetheless significant resident-to-resident altercations that should have triggered some response by the facility. The nurses' notes for March 9, 2002, contained a care plan note indicating that the facility was aware of, and concerned about, Resident 14's tendency toward aggressive behavior. The note stated "Resident [14] rarely displays sexual behavior now. Her meds seem well-adjusted. She does have episodes of anger directed at certain female residents for no apparent reason. She will redirect during these episodes but will glare at the residents or taunt the other residents verbally." The first incident involving Resident 14 was recorded in the nurses' notes of April 7, 2002. The note stated, "Resident [14] acting out in dining room. Picked a fight with another female resident. [Resident 14] was returned to 2nd floor. Stood staring at everyone. Trying to 'get in someone's face' -– very obvious foul mood and attitude." The nurses' note gave no indication that "picking a fight" involved anything more than a verbal confrontation. The nurses' notes of April 18, 2002, provide documentation of a second incident: "Caregiver reports that [Resident 14] is slapping out at others in peer group. Will monitor behavior and report findings to [physician]." The referenced caregiver was not a Shell Point employee, but a private duty person who came in regularly to tend to Resident 14. The nurses' notes of April 21, 2002, labeled "weekend summary," reflect that "Resident [14] was in a very foul mood all weekend. She verbally taunted several female residents Saturday and Sunday. She took 2 male residents to her room dozens of times and was angry with staff when redirected. She sat on a male resident's lap and when the CNA removed her -- she shook her breasts at him. Sunday a female resident was knocked down by [Resident 14] and she bragged to staff that she did it. She continued to taunt the injured resident after the incident." In response to Resident 14's increased aggression and sexually inappropriate behavior, the facility had her reevaluated by a neuropsychiatrist on April 25, 2002, four days after the weekend incidents were recorded in the nurses' notes. The neuropsychiatrist noted that Resident 14 "does well in activities and tends to act out during non-structured events," and that she was "at risk to harm others." The neuropsychiatrist increased Resident 14's dose of Depacote (divalproex sodium), a psychotropic drug. The nurses' notes of April 30, 2002, record that Resident 14 "became aggressive with another resident in hallway –- as other female resident walked by, [Resident 14] reached out to grab –- other resident pushed hand away and [Resident 14] began to swing at other resident. Did not make contact and did state 'Well did you see her.' When informed of inappropriateness stated 'I'm sorry.' No further episode." The nurses' notes of May 3, 2002, record that "Resident [14] was confrontational with nurse and with another resident, closed door on nurse, attempted to slap other resident, but was redirected in time." The nurses' notes of May 4, 2002, record that "Resident had behavioral problems all day. She verbally attacked many residents. She slapped 2 female residents. Tried to get a male resident to her room repeatedly. She stood staring at Mr. [resident name] for hours trying to get him to go with her. She paced the entire day with her arms crossed just looking at residents and staff. Not easily redirected." In response to this episode, Shell Point again had Resident 14 evaluated by her neuropsychiatrist, this time on May 9, 2002, five days after the incident. After reviewing Resident 14's drug regimen, the neuropsychiatrist decided not to change her prescriptions at that time because he had just increased the dosage on April 26. At this time Resident 14 was taking 750 mg of Depakote, and 7.5 mg of Remeron daily. Remeron (mirtazapine) is an antidepressant. The nurses' notes of May 13, 2002, reflect that Resident 14 "took male resident to her room repeatedly and into the bathroom once. She verbally attacked 2 female residents –- paced most of the evening." The nurses' notes of May 18, 2002, record that Resident 14 was "very aggressive with other residents who approached her room or a particular male resident. Paced the entire day -- took 2 male residents to her room repeatedly." The nurses' notes for the afternoon of May 19, 2002, record that Resident 14 "keeps dragging a particular male resident out of his chair and taking him down the hall to her room. Very taunting to multiple other residents. Very boisterous toward 2 females at one point. Paces continually -- will not be redirected by staff." The nurses' notes for the evening of May 19, 2002, record that Resident 14 was "aggressive this evening. Hit another resident in back of head -– not causing any injury. Verbally abusive to other residents." The nurses' notes of May 24, 2002, record that Resident No. 14 had "multiple confrontations with other residents early part of this shift. CNA's and nurses had to redirect her from stalking another resident. She struck out at several other residents –- paced a good portion of the evening - – staff removed her from the lobby to her room where she remained for the night." The nurses' notes of May 25, 2002, record that "Resident [14] touched lower extremity of another resident. He reached up and slapped left side of face as witness[ed] by CNA." The nurses' notes for the morning of June 2, 2002, record that "Resident has paced all day with arms crossed. She has had one confrontation after another today with residents-- not staff. She has been redirected repeatedly with no effect. Very defiant. She has been very physical with a male resident. She will not leave him alone. Families were complaintive [sic] during lunch about her behavior with male residents." The nurses notes for the same afternoon record that "[Resident 14] knocked another resident down. Other resident injured. [Resident 14] taken to room 214 per Dr. Hicks and supervisor. Will be monitored by CNA." Resident 15, the victim of this incident, suffered cuts, skin tears, and bruises caused by her fall after being slapped by Resident 14. The chief allegation under Tag N201 is that Shell Point allowed resident-to-resident altercations to continue without effective interventions, implementation of an abuse policy, or development of a therapeutic care plan for Resident 14 to address her ongoing problems of aggression and sexual acting out. The most recent care plan on file for Resident 14 was dated March 27, 2002, and did not address her aggressive behavior. Resident 14's inappropriate sexual behavior had been addressed in a prior care plan, but as of March 27, 2002, Shell Point considered this issue "resolved" because "resident no longer exhibits this behavior." The nurses' notes indicated that Resident 14 resumed this behavior no later than April 21, 2002, when she was first recorded taking male residents to her room, but no update to the care plan was made to address this resumption of inappropriate sexual behavior. AHCA faulted Shell Point for failing to prepare a care plan for Resident 14 so that all staff members would know when her needs were greater and what interventions were working with her, and for failing to identify and remove those stimuli that caused Resident 14 to become aggressive. However, the evidence established that Shell Point knew that the aggravating stimulus was female residents coming too close to the male residents whom Resident 14 had adopted for her special attention. Shell Point contended that the preparation of a care plan for Resident 14 would not have resulted in a different approach by the staff. Shell Point maintained flow sheets and cards on each resident in the Alzheimer's unit, and used these flow sheets rather than the care plan to track the residents' progress. At the conclusion of each shift, staff would prepare a report for the next shift detailing anything of note that occurred on their shift. Shell Point's contention that preparation of a care plan would not have changed its approach is credited, though it begs the question of whether that approach was deficient as to the care and protection of the residents involved in these altercations. Ms. Cagley-Knight testified that the appropriate response to resident-on-resident aggression in a secure Alzheimer's unit must be evaluated on a case-by-case basis. The response depends on the number and seriousness of the incidents. Shell Point attempted to minimize the seriousness of Resident 14's actions, pointing out that only four of the 12 documented incidents resulted in actual physical contact and that only the incident of June 2 resulted in physical harm to a resident. Shell Point also pointed out that in each instance of Resident 14 hitting or attempting to hit another resident, she did so suddenly and was quickly redirected by facility staff. Thus, Shell Point contends that the level of danger presented by Resident 14 was relatively low and that Shell Point's response was sufficient. This contention is not credited. Even those incidents that did not involve actual physical contact did involve slapping out at and abusive language toward other residents, who had a right not to be exposed to such a fearful, oppressive situation. The evidence established that Shell Point routinely identified when Resident 14 was becoming agitated or aggressive. Staff would attempt to redirect her when she displayed aggressive behavior, but were not always successful in doing so. When redirection was ineffective, the staff at Shell Point would increase their supervision of Resident 14. Staff was generally aware of the need to monitor Resident No. 14 and her location was monitored at all times. When she was acting out, they would increase her supervision to one-on-one. However, even with this close supervision, Resident 14's behavior could not always be stopped. Shell Point correctly noted that AHCA did not identify any other specific interventions that Shell Point should have tried. However, Shell Point failed to demonstrate that the AHCA surveyors are required or even qualified to identify specific interventions for Shell Point residents, based upon a record review and a day or two of observation. The AHCA survey is a critique of the facility's practices in light of state and federal requirements. It is the task of the facility, not the AHCA surveyors, to devise a plan of correction in response to that critique. Ms. Cagley-Knight acknowledged that a resident's first incident of aggression cannot be predicted, and that planned interventions may not always be effective. However, Ms. Cagley- Knight also concluded that the interventions in place for Resident 14 plainly were not working to curb her aggressiveness or at least prevent her from harming other residents. Ms. Cagley-Knight's conclusion was reasonable, based on the dozen instances of aggressive behavior by Resident 14 over a two-month period, four of which involved physical contact. Given her limited exposure to Resident 14, Ms. Cagley-Knight was in no position to prescribe specific interventions, and her inability to do so does not excuse the facility's failure to explore different approaches in curbing Resident 14's aggressiveness. Shell Point correctly noted that staff was always observant of Resident 14 and always acted quickly to minimize the harm she caused to other residents. However, swift reaction to Resident 14's outbursts does not excuse the facility's failure to try different approaches that might have prevented the outbursts in the first place. Shell Point argued that the only way to eliminate the stimulus causing the aggressive behavior would have been to remove the other residents, which would be impractical, or to isolate Resident 14, which would violate her resident rights. Shell Point contended that, given the limited responses available to a nursing home to respond to aggressive behavior by a resident with Alzheimer's, the only other option available was to "Baker Act" Resident 14. Shell Point contended that "Baker Acting" was not necessary for Resident 14, based on the judgment of the professionals charged with her care, and that second- guessing their judgment should not form the basis for a finding of deficiency and issuance of a conditional license. The fact that staff at Shell Point understood the stimuli that triggered Resident 14's outbursts should have led to some form of intervention designed to prevent her exposure to those stimuli. If the facility lacked a means, short of complete isolation, to keep Resident 14 apart from the residents who triggered her violent outbursts, then it should have conceded its inability to provide adequate care to Resident 14 and taken steps to have her moved to a facility better suited to cope with her needs. This is not a matter of second-guessing the professional judgment of Shell Point's staff, but a finding based on the manifest evidence that Shell Point was unable or unwilling to devise intervention strategies that would respect both the dignity of Resident 14 and the safety of the residents around her. In summary, based upon all the evidence adduced at the final hearing, AHCA's finding of a deficiency under Tag N201 was demonstrated by clear and convincing evidence.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order upholding its notice of intent to assign conditional licensure status to The Christian and Missionary Alliance Foundation, d/b/a Shell Point Nursing Pavilion, for the period of June 6, 2002, through July 9, 2002, and imposing an administrative fine in the amount of $2,500. DONE AND ENTERED this 1st day of July, 2003, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of July, 2003. COPIES FURNISHED: Jay Adams, Esquire Broad and Cassel 215 South Monroe Street, Suite 400 Post Office Box 11300 Tallahassee, Florida 32302 Eileen O'Hara Garcia, Esquire Agency for Health Care Administration Sebring Building, Room 310J 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 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308
The Issue Whether the applications for certificates of need filed by Petitioners Alachua General Hospital, Inc., Oakhurst Manor Nursing Corporation and Florida Convalescent Centers, Inc., meet the requirements of law and should be approved based on application of the statutory review criteria or upon other considerations.
Findings Of Fact Oakhurst Manor Nursing Center is a community-based skilled nursing facility of 120 beds located in Ocala, Florida. Oakhurst has a history of high occupancy and is a superior rated facility. At hearing, Oakhurst acknowledged a number of inaccuracies in its application. Some staffing ratios were misstated. The data utilized to calculate financial ratios is different from the data set forth in the combined statement. The physical location of the facility was incorrectly identified. The application misstated the existing number of beds in the facility. Section 408.035(1)(a), Florida Statutes, requires consideration of the need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan, except in emergency circumstances which pose a threat to the public health. As to the application of Oakhurst, utilization rates indicate that need exists for additional community nursing care services in Marion County. Oakhurst experiences full occupancy. Projected occupancy levels set forth in the Oakhurst application are reasonable. The evidence establishes that the need for additional beds exists and that the application of Oakhurst is consistent with the applicable district and state health plans. Section 408.035(1)(b), Florida Statutes, requires consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant. Approval of the Oakhurst application will increase the availability of community nursing care at a superior rated facility and will meet the projected need determined by the AHCA's determination of the fixed pool. Section 408.035(1)(c), Florida Statutes, requires consideration of the applicant's ability to provide quality of care and the applicant's record of providing quality of care. Oakhurst is a superior rated facility with a history of providing high quality care. There is no indication that the 60 bed unit addition will result in a decline in quality of care. Section 408.035(1)(e), Florida Statutes, requires consideration of the probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources. The evidence fails to establish that approval of the Oakhurst application will result in probable economies and improvements in service from joint, cooperative, or shared health care operations. Section 408.035(1)(i), Florida Statutes, requires consideration of the immediate and long-term financial feasibility of the proposal. Since purchase by the current owners, Oakhurst's financial performance has been satisfactory. Losses experienced during the two years following the purchase are attributed to accelerated depreciation. The facility is currently profitable. Although there was evidence that insufficient funds are being generated to maintain the facility's physical plant, the evidence is insufficient to establish that Oakhurst is unable to maintain the facility. Projected occupancy rates are reasonable. Funds for capital and operating expenditures are available to Oakhurst. Notwithstanding current operation of the facility and availability of funds, Oakhurst's proposal is not financially feasible. Oakhurst's revenue projections are not reasonable. This finding is based on the credible testimony of expert Charles Wysocki. Mr. Wysocki opined that the Oakhurst application is not financially feasible in the short and long term and that the financial projections in the Oakhurst application are not reliable. Mr. Wysocki's testimony was credible and persuasive. Oakhurst's current Medicaid rate is $71.68. Oakhurst application Schedule 10 projects Medicaid rates as follows: $77.41 during the construction year; $104.69 during operation year one; and $99.75 during operation year two. Oakhurst's projected Medicaid rates are unreasonable. Projected Medicaid rates are overstated and do not appear to account for Medicaid program rate ceilings. Medicaid program payment restrictions will not permit payment of such rates during years one and two. Oakhurst's current Medicare rate is $186.87. Oakhurst application Schedule 10 projects Medicare rates as follows: $340 during the construction year; $361 during operation year one; and $328 during operation year two. Oakhurst's projected Medicare rates are overstated and unreasonable. Medicare program payment restrictions will not permit payment of such rates. Oakhurst's application overstated revenue projections related to private pay patients. Further, according to Mr. Wysocki, Oakhurst has underestimated expenses related to depreciation, amortization and property taxes. Section 408.035(1)(l), Florida Statutes, requires consideration of the probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness. Approval of Oakhurst's application can be expected to have a positive competitive impact on the supply of services being proposed based on the fact that the addition of beds will increase the supply of appropriate placements. Section 408.035(1)(n), Florida Statutes, requires consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. Although Oakhurst has historically participated in the Medicaid program, Oakhurst is currently not subject to Medicaid participation requirements. If the CON at issue in this proceeding is awarded, Oakhurst will be required to provide at least half of the expanded facility's 160 beds to Medicaid patients. Section 408.035(2)(b), Florida Statutes, requires consideration of whether existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner. To the extent that such information is available, there is no evidence that these services are used inappropriately or inefficiently. Section 408.035(2)(d), Florida Statutes, requires consideration of whether patients will experience serious problems in obtaining inpatient care of the type proposed in the absence of the proposed new service. As to community nursing home beds, the AHCA has determined that a need exists for additional capacity in the planning area's nursing homes. It is likely that failure to meet projected need will result in difficulty in locating appropriate placements. The state health plan sets forth "preferences" which are considered in comparative evaluations of competing CON applications. Preference is given to applicants proposing to locate nursing homes in areas within subdistricts with occupancy rates exceeding 90 percent. The occupancy rate is higher in the Alachua planning area than in the Marion planning area. Oakhurst is in the Marion planning area and has the highest occupancy in the planning area. Oakhurst meets this preference. Preference is given to applicants who propose to serve Medicaid residents in proportion to the average subdistrict-wide percentage of the nursing homes in the same subdistrict. Exceptions shall be considered for applicants who propose to exclusively serve persons with similar ethnic and cultural backgrounds or propose the development of multi-level care systems. The Marion County Medicaid participation average is 72.93 percent. Oakhurst's application subjects the facility to a 50 percent Medicaid average. Oakhurst does not meet this preference. Preference is given to applicants proposing to provide specialized services to special care residents, including AIDS residents, Alzheimer's residents, and the mentally ill. Oakhurst intends to operate a separate 20 bed subunit specializing in skin and wound care. A distinct subacute care program targeted at a specific patient population is a specialized service. Oakhurst does not have specialized Alzheimer services. Oakhurst does not provide care to AIDS patients. Oakhurst does not meet this preference. Preference is given to applicants proposing to provide a continuum of services to community residents, including but not limited to, respite care and adult day care. The Oakhurst proposal does not address respite care or adult day care. Oakhurst does not meet this preference. Preference is given to applicants proposing to construct facilities which provide maximum resident comfort and quality of care. These special features may include, but are not limited to, larger rooms, individual room temperature controls, visitors' rooms, recreation rooms, outside landscaped recreation areas, physical therapy rooms and equipment, and staff lounges. Oakhurst's application meets this preference. Preference is given to applicants proposing to provide innovative therapeutic programs which have been proven effective in enhancing the residents' physical and mental functional level and which emphasize restorative care. No party proposes to offer any therapeutic programs which may credibly be identified as "innovative." Preference is given to applicants proposing charges which do not exceed the highest Medicaid per diem rate in the subdistrict. Exceptions are be considered for facilities proposing to serve upper income residents. Oakhurst's projected rates exceed the highest Medicaid per diem rate in the subdistrict, therefore Oakhurst does not meets this preference. Preference is given to applicants with a history of providing superior resident care programs in existing facilities in Florida or other states. HRS' evaluation of existing facilities shall consider, but not be limited to, current ratings of licensure facilities located in Florida. AHCA is the successor agency to HRS. All applications meet this preference. Preference is given to applicants proposing staffing levels which exceed the minimum staffing standards contained in licensure administrative rules. Applicants proposing higher ratios of RNs- and LPNs-to-residents than other applicants shall be given preference. Although FCC and Oakhurst propose reasonable staff levels, Alachua's hospital-based unit, by virtue of location, more closely meets this preference than FCC or Oakhurst. Preference is given to applicants who will use professionals from a variety of disciplines to meet the residents' needs for social services, specialized therapies, nutrition, recreation activities, and spiritual guidance. These professionals include physical therapists, mental health nurses, and social workers. All applications meet this preference. Preference is given to applicants who document plans to will ensure residents' rights and privacy, to use resident councils, and to implement a well-designed quality-assurance and discharge-planning program. All applications meet this preference. Preference is given to applicants proposing lower administrative costs and higher resident care costs compared to the average nursing home in the district. Oakhurst has higher administrative costs and lower resident care costs compared to the average nursing home in the district. Oakhurst does not meet this preference. The district health plan sets forth preferences which are to be considered in comparative evaluations of CON applications. The first applicable district preference is directed toward providing geographic access to nursing home beds. None of the applications meet this preference. The second applicable district preference requires consideration of existing bed utilization. Based on the percentage of elderly population and utilization of existing beds in each area, relative priorities are established. Oakhurst is in a "high need" planning area. Existing nursing homes in the Marion planning area are experiencing occupancy levels between 80 and 90 percent placing Oakhurst in a "moderate occupancy" planning area. According to the preference matrix set forth in the district plan, Oakhurst is in a priority two planning area (high need and moderate occupancy.) The evidence establishes that Oakhurst meets this preference. The third preference relates to the conversion of acute care beds to skilled nursing use. Oakhurst does not intend to convert underutilized hospital beds into skilled nursing beds for step-down or subacute care. The fourth and fifth preferences apply to new facilities of at least 60 beds. No application meets these preferences. The sixth preference states that priority consideration should be given to facilities which propose to offer specialized services to meet the needs of the identified population. Oakhurst proposes to offer a subunit specializing in skin and wound care. Oakhurst meets this preference.
Recommendation RECOMMENDED that a Final Order be entered determining the application of Oakhurst Manor Nursing Center for Certificate of Need #7326 to be incomplete and withdrawn, GRANTING the application of Florida Convalescent Centers, Inc., for Certificate of Need #7325 for the 60 remaining beds in the applicable fixed need pool and GRANTING the application of Alachua General Hospital for Certificate of Need #7320 to convert 30 existing acute care beds into a skilled nursing unit. DONE and RECOMMENDED this 5th day of October, 1994, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 5th day of October, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6264 To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Alachua General Hospital, Inc.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 15. Rejected, irrelevant as to the AHCA's review of the proposals prior to notice of intended award. 16, 20. Rejected, unnecessary. 21-26. Rejected, subordinate. 30. Rejected, recitation of testimony is not finding of fact. 32, 34. Rejected, subordinate. 42-50. Rejected, not supported by the evidence. The preferences set forth in the proposed finding are not those contained within Alachua's exhibit #1, which has been utilized in this Recommended Order. 52. Rejected, immaterial. Rejected, recitation of testimony is not finding of fact. Rejected, evidence fails to establish that therapy offered is "innovative." 62. Rejected, cumulative. 63-64. Rejected, subordinate. 72. Rejected as to SAAR, unnecessary. 73-76. Rejected, recitation of testimony is not finding of fact. Oakhurst Manor Nursing Corp.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4,6, 8-51. Rejected, unnecessary, application rejected as incomplete and withdrawn from consideration. 52-54, 56-58. Rejected, irrelevant. Although it is true that the application contained the combined audited financial statements for the Harborside facilities, such statement fails to meet the requirement that the application contain an audited financial statement for the applicant. Harborside is not the applicant. 55. Rejected, irrelevant. The agency has cited no authority which would permit the waiver of the statutory requirement. 59. Rejected, immaterial. The document was admitted to demonstrate that the material required by law was not submitted with the CON application. Further consideration constitutes an impermissible amendment to the CON application and is rejected. Florida Convalescent Centers, Inc.'s proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, unnecessary. 5-91. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. 93. Rejected, unnecessary. 102-143. References to Oakhurst application, rejected, unnecessary. Agency for Health Care Administration's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3. Rejected, irrelevant. 4-5. Rejected, unnecessary. 6. Rejected, subordinate. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. Rejected, not supported by the greater weight of evidence. 13-16. Rejected. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. 19. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the greater weight of the evidence, wherein the CON application sets forth such information. Rejected, unnecessary. The Oakhurst application has been rejected as incomplete and treated herein as having been withdrawn. Comparison is inappropriate. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the evidence. The CON application sets forth the information which the agency asserts was not provided. Rejected, contrary to the comparative review contained herein. Rejected, contrary to the evidence as related to applicable criteria for review set forth in the statute. 35. Rejected, not supported by credible evidence or the administrative rules cited in the proposed finding of fact. COPIES FURNISHED: Douglas M. Cook, Director Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303-4131 Dean Bunton, Esquire Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303-4131 R. Terry Rigsby, Esquire Geoffrey D. Smith, Esquire BLANK, RIGSBY & MEENAN 204 South Monroe Street Tallahassee, Florida 32302 Gerald Sternstein, Esquire Frank Rainer, Esquire RUDEN, BARNETT, McCLOSKY, SMITH 215 South Monroe Street Barnett Bank Building, Suite 815 Tallahassee, Florida 32301 Alfred W. Clark, Esquire 117 South Gadsden Street, Suite 201 Tallahassee, FL 32301
The Issue The issues in these cases are whether the Agency for Health Care Administration (AHCA or Agency) should discipline (including license revocation) Bayou Shores SNF, LLC, d/b/a Rehabilitation Center of St. Pete (Bayou Shores) for the statutory and rule violations alleged in the June 10, 2014, Administrative Complaint, and whether AHCA should renew the nursing home license held by Bayou Shores.
Findings Of Fact Bayou Shores is a 159-bed licensed nursing facility under the licensing authority of AHCA, located in Saint Petersburg, Florida. Bayou Shores was at all times material hereto required to comply with all applicable rules and statutes. Bayou Shores was built in the 1960s as a psychiatric hospital. In addition to long-term and short-term rehabilitation residents, Bayou Shores continues to treat psychiatric residents and other mental health residents. AHCA is the state regulatory authority responsible for licensure of nursing homes and enforcement of applicable federal regulations, state statutes, and rules governing skilled nursing facilities, pursuant to the Omnibus Reconciliation Act of 1987, Title IV, Subtitle C (as amended) chapters 400, Part II, and 408, Part II, Florida Statutes, and Florida Administrative Code Chapter 59A-4. AHCA is responsible for conducting nursing homes surveys to determine compliance with Florida statutes and rules. AHCA completed surveys of Bayou Shores’ nursing home facility on or about February 10, 2014;5/ March 20, 2014; and July 11, 2014. Surveys may be classified as annual inspections or complaint investigations. Pursuant to section 400.23(8), Florida Statutes, AHCA must classify deficiencies according to their nature and scope when the criteria established under section 400.23(2) are not met. The classification of the deficiencies determines whether the licensure status of a nursing home is "standard" or "conditional" and the amount of the administrative fine that may be imposed, if any. AHCA surveyors cited deficiencies during the three surveys listed above (paragraph 4). Prior to the alleged events that prompted AHCA’s actions, Bayou Shores had promulgated policies or procedures for its operation. Specifically, Bayou Shores had policies or procedures in place governing: (Resident) code status, involving specific life-saving responses (regarding what services would be provided when or if an untoward event occurred, including a resident’s end of life decision); Abuse, neglect, exploitation, misappropriation of property; and Elopements. CODE STATUS Bayou Shores’ policy on code status orders and the response provided, in pertinent part, the following: Each resident will have the elected code status documented in their medical record within the Physician’s orders & on the state specific Advanced Directives form kept in the Advanced Directives section of the medical record. Bayou Shores’ procedure on code status orders and the response also provided that the “Physician & or Social Services/Clinical Team” would discuss with a “resident/patient or authorized responsible party” their wishes regarding a code status as it related to their current clinical condition. This discussion was to include an explanation of the term “'Do Not Resuscitate’ (DNR) and/or ‘Full Code.’” Bayou Shores personnel were to obtain a written order signed by the physician indicating which response the resident (or their legal representative) selected. In the event a resident was found unresponsive, the procedure provided for the following staff response: 3 Response: Upon finding a resident/patient unresponsive, call for help. Evaluate for heartbeat, respirations, & pulse. The respondent to the call for help will immediately overhead page a “CODE BLUE” & indicate the room number, or the location of the resident/patient & deliver the Medical Record & Emergency Cart to the location of the CODE BLUE. If heartbeat, respirations, & pulse cannot be identified, promptly verify Code Status - Respondent verifies Code Status by review of the resident’s/patient’s Medical Record. If Code Status is “DNR” – DO NOT initiate CPR (Notify Physician, Supervisor & Family). If Code Status includes CPR & respondent is CPR certified, BEGIN Cardio Pulmonary Resuscitation. If respondent is not CPR certified, STAY with the RESIDENT/PATIENT – Continue to summon assistance. The first CPR certified responder will initiate CPR. If code status is not designated, the resident is a FULL CODE & CPR will be initiated. A scribe will be designated to record activity related to the Code Blue using the “Code Blue Worksheet.” The certified respondent will continue CPR until: Relieved by EMS, relieved by another CPR certified respondent, &/or Physician orders to discontinue CPR. A staff member will be designated to notify the following person(s) upon initiation of CPR. EMS (911) Physician Family/Legal Representative * * * 5) Review DNR orders monthly & with change in condition and renew by Physician’s signature on monthly orders. (Emphasis supplied). Bayou Shores’ “Do Not Resuscitate Order” policy statement provides: Our facility will not use cardiopulmonary resuscitation and related emergency measures to maintain life functions on a resident when there is a Do Not Resuscitate Order in effect. Further, the DNR policy interpretation provides: Do not resuscitate order must be signed by the resident’s Attending Physician on the physician’s order sheet maintained in the resident’s medical record. A Do Not Resuscitate Order (DNRO) form must be completed and signed by the Attending Physician and resident (or resident’s legal surrogate, as permitted by State law) and placed in the front of the resident’s medical record. (Note: Use only State approved DNRO forms. If no State form is required use facility approved form.) Should the resident be transferred to the hospital, a photocopy of the DNRO form must be provided to the EMT personnel transporting the resident to the hospital. Do not resuscitate orders (DNRO) will remain in effect until the resident (or legal surrogate) provides the facility with a signed and dated request to end the DNR order. (Note: Verbal orders to cease the DNRO will be permitted when two (2) staff members witness such request. Both witnesses must have heard and both individuals must document such information on the physician’s order sheet. The Attending Physician must be informed of the resident’s request to cease the DNR order.) The Interdisciplinary Care Planning Team will review advance directives with the resident during quarterly care planning sessions to determine if the resident wishes to make changes in such directives. Inquiries concerning do not resuscitate orders/requests should be referred to the Administrator, Director of Nursing Services, or to the Social Services Director. Bayou Shores’ advance directives policy statement provides: “Advance Directives will be respected in accordance with state law and facility policy.” In pertinent part, the Advance Directives policy interpretation and implementation provides: * * * Information about whether or not the resident has executed an advance directive shall be displayed prominently in the medical record. In accordance with current OBRA definitions and guidelines governing advance directives, our facility has defined advanced directives as preferences regarding treatment options and include, but are not limited to: * * * b. Do Not Resuscitate – Indicates that, in case of respiratory or cardia failure, the resident, legal guardian, health care proxy, or representative (sponsor) has directed that no cardiopulmonary resuscitation (CPR) or other life-saving methods are to be used. * * * Changes or revocations of a directive must be submitted in writing to the Administrator. The Administrator may require new documents if changes are extensive. The Care Plan Team will be informed of such changes and/or revocations so that appropriate changes can be made in the resident assessment (MDS) and care plan. The Director of Nursing Services or designee will notify the Attending Physician of advance directives so that appropriate orders can be documented in the resident’s medical record and plan of care. (Emphasis supplied). A DNR order is an advance directive signed by a physician that nursing homes are required to honor. The DNR order is on a state-mandated form that is yellow/gold (“goldenrod”) in color. The DNR order is the only goldenrod form in a resident’s medical record/chart.6/ The medical record itself is kept at the nursing station. DNR Orders should be prominently placed in a resident’s medical record for easy access. When a resident is experiencing a life-threatening event, care-givers do not have the luxury of time to search a medical record or chart to determine whether the resident has a DNR order or not. Cardiopulmonary resuscitation should be started as soon as possible, provided the resident did not have a DNR order. Bayou Shores had a policy and procedure regarding DNR orders and the implementation of CPR in place prior to the February 2014 survey. The policy and procedure required that DNR orders be honored, and that each resident with a DNR order have the DNR order on the state-mandated goldenrod form in the "Advanced Directives" section of the resident’s medical record. ABUSE, NEGLECT, EXPLOTATION, AND MISAPPROPRIATION OF PROPERTY PREVENTION, PROTECTION AND RESPONSE POLICY AND PROCEDURES Bayou Shores’ “Abuse, Neglect, Exploitation, and Misappropriation of Property Prevention, Protection and Response” policy provided in pertinent part: Abuse, Neglect, Exploitation, and Misappropriation of Property, collectively known and referred to as ANE and as hereafter defined, will not be tolerated by anyone, including staff, patients, volunteers, family members or legal guardians, friends or any other individuals. The health center Administrator is responsible for assuring that patient safety, including freedom from risk of ANE, hold the highest priority. (Emphasis supplied). Bayou Shores’ definition of sexual abuse included the following: Sexual Abuse: includes but is not limited to, sexual harassment, sexual coercion, or sexual assault. (Emphasis supplied). Bayou Shores’ ANE prevention issues policies included in pertinent part: The center will provide supervision and support services designed to reduce the likelihood of abusive behaviors. Patients with needs and behaviors that might lead to conflict with staff or other patients will be identified by the Care Planning team, with interventions and follow through designed to minimize the risk of conflict. Bayou Shores’ procedure for prevention issues involving residents identified as having behaviors that might lead to conflict included, in part, the following: patients with a history of aggressive behaviors, patients who enter other residents rooms while wandering. * * * e. patients who require heavy nursing care or are totally dependent on nursing care will be considered as potential victims of abuse. Bayou Shores’ interventions designed to meet the needs of those residents identified as having behaviors that might lead to conflict included, in part: Identification of patients whose personal histories render them at risk for abusing other patients or staff, assessment of appropriate intervention strategies to prevent occurrences, Bayou Shores’ policy regarding ANE identification issues included the following: Any patient event that is reported to any staff by patient, family, other staff or any other person will be considered as possible ANE if it meets any of the following criteria: * * * f. Any complaint of sexual harassment, sexual coercion, or sexual assault. (Emphasis supplied). Bayou Shores’ ANE procedure included the following: Any and all staff observing or hearing about such events will report the event immediately to the ABUSE HOTLINE AT 1-800-962-2873. The event will also be reported immediately to the immediate supervisor, AND AT LEAST ONE OF THE FOLLOWING INDIDUALS, Social Worker (ANE Prevention Coordinator), Director of Nursing, or Administrator. Any and all employees are empowered to initiate immediate action as appropriate. (Emphasis supplied). Bayou Shores’ policies regarding ANE investigative issues provided the following: Any employee having either direct or indirect knowledge of any event that might constitute abuse must report the event promptly. * * * All events reported as possible ANE will be investigated to determine whether ANE did or did not take Place [sic]. Bayou Shores’ procedures regarding ANE investigative issues included the following: Any and all staff observing or hearing about such events must report the event immediately to the ANE Prevention Coordinator or Administrator. The event should also be reported immediately to the employee’s supervisor. All employees are encouraged and empowered to contact the ABUSE HOTLINE AT 1-800-962-2873. [sic] if they witness such event or have reasonable cause to suspect such an event has indeed occurred. THE ANE PREVENTION COORDINATOR will initiate investigative action. The Administrator of the center, the Director of Nurses and/or the Social Worker (ANE PREVENTION COORDINATOR) will be notified of the complaint and action being taken as soon as practicable. (Emphasis supplied). Bayou Shores’ policy regarding ANE reporting and response issues included the following: All allegations of possible ANE will be immediately reported to the Abuse Hotline and will be assessed to determine the direction of the investigation. Bayou Shores’ procedures regarding ANE reporting and response issues included the following: Any investigation of alleged abuse, neglect, or exploitation will be reported immediately to the Administrator and/or the ANE coordinator. It will also be reported to other officials, in accordance with State and Federal Law. THE IMMEDIATE REPORT All allegations of abuse, neglect, . . . must be reported immediately. This allegation must be reported to the Abuse Hotline (Adult Protective Services) within twenty-four hours whenever an allegation is made. The ANE Prevention Coordinator will also submit The Agency for Health Care Administration AHCA Federal Immediate/5-Day Report and send it to: Complaint Administration Unit Phone: 850-488-5514Fax: 850-488-6094 E-Mail: fedrep@ahca.myflorida.com THE REPORT OF INVESTIGATION (Five Day Report): The facility ANE Prevention Coordinator will send the result of facility investigations to the State Survey Agency within five working days of the incident. This will be completed using the same AHCA Federal/Five Day Report, and sending it to the Complaint investigation Unit as noted above. DESIGNATED REPORTERS: Shall immediately make a report to the State Survey Agency, by fax, e-mail, or telephone. All necessary corrective actions depending on the result of the investigation will be taken. Report any knowledge of actions by a court of law against any employee, which would indicate an employee is unfit for service as a nurse aide or other facility staff to the State nurse aide registry or other appropriated [sic] licensing authorities. Any report to Adult Protective Services will trigger an internal investigation following the protocol of the Untoward Events Policy and Procedure. (Emphasis supplied). Bayou Shores’ abuse investigations policy statement provides the following: All reports of resident abuse, . . . shall be promptly and thoroughly investigated by facility management. Bayou Shores’ abuse investigations interpretation and implementation provides, in pertinent part, the following: Should an incident or suspected incident of resident abuse, . . . be reported, the Administrator, or his/her designee, will appoint a member of management to investigate the alleged incident. The Administrator will provide any supporting documents relative to the alleged incident to the person in charge of the investigation. The individual conducting the investigation will, as a minimum: Review the completed documentation forms; Review the resident’s medical record to determine events leading up to the incident; Interview the person(s) reporting the incident; Interview any witnesses to the incident; Interview the resident (as medically appropriate); Interview the resident’s Attending Physician as needed to determine the resident’s current level of cognitive function and medical condition; Interview staff members (on all shifts) who have had contact with the resident during the period of the allege incident; Interview the resident’s roommate, family members, and visitors; Interview other residents to whom the accused employee provides care or services; and Review all events leading up to the alleged incident. The following guidelines will be used when conducting interviews; Each interview will be conducted separately and in a private location; The purpose and confidentiality of the interview will be explained thoroughly to each person involved in the interview process; and Should a person disclose information that may be self-incriminating, that individual will be informed of his/her rights to terminate the interview until such time as his/her rights are protected (e.g., representation by legal counsel). Witness reports will be obtained in writing. Witnesses will be required to sign and date such reports. The individual in charge of the abuse investigation will notify the ombudsman that an abuse investigation is being conducted. The ombudsman will be invited to participate in the review process. Should the ombudsman decline the invitation to participate in the investigation, that information will be noted in the investigation record. The ombudsman will be notified of the results of the investigation as well as any corrective measures taken. * * * The individual in charge of the investigation will consult daily with the Administrator concerning the progress/findings of the investigation. The Administrator will keep the resident and his/her representative (sponsor) informed of the progress of the investigation. The results of the investigation will be recorded on approved documentation forms. The investigator will give a copy of the completed documentation to the Administrator within working days of the reported incident. The Administrator will inform the resident and his/her representative (sponsor) of the results of the investigation and corrective action taken within days of the completion of the investigation. The Administrator will provide a written report of the results of all abuse investigations and appropriate action taken to the state survey and certification agency, the local police department, the ombudsman, and others as may be required by state or local laws, within five (5) working days of the reported incident. Should the investigation reveal that a false report was made/filed, the investigation will cease. Residents, family members, ombudsmen, state agencies, etc., will be notified of the findings. (Note: Disciplinary actions concerning the filing of false reports by employees are outlined in our facility’s personnel policy manual.) Inquiries concerning abuse reporting and investigation should be referred to the Administrator or to the Director of Nursing Services. Bayou Shores’ reporting abuse to facility management policy statement provides the following: It is the responsibility of our employees, facility consultants, Attending Physicians, family members visitors etc., to promptly report any incident or suspected incident of . . . resident abuse . . . to facility management. Bayou Shores’ reporting abuse to facility management policy interpretation and implementation provides the following: Our facility does not condone resident abuse by anyone, including staff members, . . . other residents, friends, or other individuals. To help with recognition of incidents of abuse, the following definitions of abuse are provided: * * * c. Sexual abuse is defined as, but not limited to, sexual harassment, sexual coercion, or sexual assault. All personnel, residents, family members, visitors, etc., are encouraged to report incidents of resident abuse or suspected incidents of abuse. Such reports may be made without fear of retaliation from the facility or its staff. Employees, facility consultants and /or Attending Physicians must immediately report any suspected abuse or incidents of abuse to the Director of Nursing Services. In the absence of the Director of Nursing Services such reports may be made to the Nurse Supervisor on duty. Any individual observing an incident of resident abuse or suspecting resident abuse must immediately report such incident to the Administrator or Director of Nursing Services. The following information should be reported: The name(s) of the resident(s) to which the abuse or suspected abuse occurred; The date and time that the incident occurred; Where the incident took place; The name(s) of the person(s) allegedly committing the incident, if known; The name(s) of any witnesses to the incident; The type of abuse that was committed (i.e., verbal, physical, . . . sexual, . . .); and Any other information that may be requested by management. Any staff member or person affiliated with this facility who . . . believes that a resident has been a victim of . . . abuse, . . . shall immediately report, or cause a report to be made of, the . . . offense. Failure to report such an incident may result in legal/criminal action being filed against the individual(s) withholding such information. * * * The Administrator or Director of Nursing Services must be immediately notified of suspected abuse or incidents of abuse. If such incidents occur or are discovered after hours, the Administrator and Director of Nursing Services must be called at home or must be paged and informed of such incident. When an incident of resident abuse is suspected or confirmed, the incident must be immediately reported to facility management regardless of the time lapse since the incident occurred. Reporting procedures should be followed as outlined in this policy. Upon receiving reports of . . . sexual abuse, a licensed nurse or physician shall immediately examine the resident. Findings of the examination must be recorded in the resident’s medical record. (Note: If sexual abuse is suspected, DO NOT bathe the resident or wash the resident’s clothing or linen. Do not take items from the area in which the incident occurred. Call the police immediately.) (Emphasis supplied). C. ELOPEMENT A/K/A EXIT SEEKING Bayou Shores’ elopement policy statement provides the following: Staff shall investigate and report all cases of missing residents. Bayou Shores’ elopement policy interpretation and implementation provides the following: 1. Staff shall promptly report any resident who tries to leave the premises or is suspected of being missing to the Charge Nurse or Director of Nursing. * * * If an employee discovers that a resident is missing from the facility, he/she shall: Determine if the resident is out on an authorized leave or pass; If the resident was not authorized to leave, initiate a search of the building(s) and premises; If the resident is not located, notify the Administrator and the Director of Nursing Services, the resident’s legal representative (sponsor), the Attending Physician, law enforcement officials, and (as necessary) volunteer agencies (i.e., Emergency Management, Rescue Squads, etc.); Provide search teams with resident identification information; and Initiate an extensive search of the surrounding area. When the resident returns to the facility, the Director of Nursing Services or Charge Nurse shall: Examine the resident for injuries; Contact the Attending Physician and report findings and conditions of the resident; Notify the resident’s legal representative (sponsor); Notify search teams that the resident has been located; Complete and file an incident report; and Document relevant information in the resident’s medical record. FEBRUARY 2014 SURVEY A patient has the right to choose what kind of medical treatment he or she receives, including whether or not to be resuscitated. At Bayou Shores there may be multiple locations in a resident’s medical record for physician orders regarding a resident’s DNR status. A physician’s DNR order should be in the resident’s medical record. When a resident is transported from a facility to another health care facility, the goldenrod form is included with the transferring documentation. If there is not a DNR, a full resuscitation effort would be undertaken. In late January, early February 2014, AHCA conducted Bayou Shores’ annual re-licensure survey. During the survey, Bayou Shores identified 24 residents who selected the DNR status as their end-of-life choice. Of those 24 residents, residents numbered 35,7/ 54 and 109, did not have a completed or current “Do Not Resuscitate Order” in their medical records maintained by Bayou Shores.8/ As the medical director for Bayou Shores, Dr. Saba completed new DNR orders for patients during or following the February survey. In one instance, a particular DNR order did not have a signature of the resident or the representative of the resident, confirming the DNR status. Without that signature, the DNR order was invalid. In another instance, a verbal authorization was noted on the DNR forms, which such is not sufficient to control a DNR status. A medication administration record (MAR) is not an order; however, it should reflect orders. In one instance, a resident’s MAR reflected a full code status, when the resident had a DNR order in place. During the survey, Bayou Shores was in the midst of changing its computer systems and pharmacies. At the end of each month, orders for the upcoming month were produced by the pharmacy, and inserted into each resident’s medical record. Bayou Shores’ staff routinely reviewed each chart to ensure the accuracy of the information contained therein. Additionally, each nurse’s station was given a list of those residents who elected a DNR status over a full-code status. Conflicting critical information could have significant life or death consequences. The administration of cardio- pulmonary resuscitation (CPR) to a resident who has decided to forgo medical care could cause serious physical or psychological injuries. As the February survey progressed, and Bayou Shores was made aware of the DNR order discrepancies, staff contacted residents or residents’ legal guardians to secure signatures on DNR orders so that resident’s last wishes would be current and correct. Bayou Shores had a redundant system in place in an effort to ensure that a resident’s last wishes were honored; however, the systems failed. MARCH 2014 SURVEY On March 20, 2014, AHCA conducted a complaint survey and a follow-up survey to the February 2014 survey. During the March 2014 survey, Janice Kicklighter served as the ANE prevention coordinator for Bayou Shores. On February 13, 2014,9/ Resident BJ was admitted to Bayou Shores from another health care facility. Sometime after BJ was admitted, paperwork indicating BJ’s history as a sex offender was provided to Bayou Shores. Exactly when this information was provided and to whom is unclear. Once BJ was assigned to a floor, CNA Daniels was assigned to assist BJ, and tasked to give BJ a shower. CNA Daniels observed that BJ was unable to transfer from his bed to the wheelchair without assistance; however, CNA Daniels, with assistance, was able to transfer him, and took him to the shower via a wheelchair. It is unclear if CNA Daniels shared his observation with any other Bayou Shores staff. Several hours after BJ’s admission, Mr. Thompson, Bayou Shores’ then administrator, was informed that BJ had been admitted. Mr. Thompson conferred with the director of nursing (DON) and the director of therapy (director). The director immediately assessed BJ that evening. The director then advised Mr. Thompson and the DON that her initial contact with BJ was less than satisfactory. BJ declined to cooperate in the assessment, and the director advised Mr. Thompson and the DON that BJ could not get out of bed without assistance. Mr. Thompson, the DON and the director did not provide any further care instructions or directions to Bayou Shores staff regarding BJ’s care or stay at that time. A failure to cooperate does not ensure safety for either BJ or other residents. The day after his admission, BJ was assessed by a psychiatrist. Thereafter, Mr. Thompson notified nearby schools and BJ’s roommate (roommate) that BJ was a sexual offender. Shortly after his conversation with the roommate, Mr. Thompson directed that a “one-on-one” be established with BJ, which means a staff member was to be with BJ at all times. BJ was evaluated again and removed from the facility. Bayou Shores did not immediately implement its policy and procedures to ensure its residents were free from the risk of ANE. Hearsay testimony was rampant in this case. Mr. Thompson testified that he spoke with BJ’s roommate about an alleged sexual advance. However, the lack of direct testimony from the alleged victim (or other direct witness) fails to support the hearsay testimony and thus there is no credible evidence needed to support a direct sexually aggressive act. Rather, the fact that Mr. Thompson claims that he was made aware of the alleged sexual attempt, yet failed to institute any of Bayou Shores policies to investigate or assure resident safety is the violation. JULY 2014 COMPLAINT SURVEY In June 2015, Resident JN left the second floor at Bayou Shores without any staff noticing. A complaint was filed. At the time of the June 2014 incident (the basis for the July Survey), Bayou Shores’ second floor was a limited access floor secured through a key system. Some residents on the second floor had medical, psychiatric, cognitive or dementia (Alzheimer) issues, while other residents choose to live there. There are two elevators that service the second floor; one, close to the nurses’ station, and the second, towards the back of the floor. There was no direct line of sight to the nurses’ station from either elevator. To gain access to the second floor, a visitor obtained an elevator key from the lobby receptionist, inserted the key into the elevator portal which brought the elevator to the lobby, the elevator doors opened, the visitor entered the elevator, traveled to the second floor, exited the elevator, and the elevator doors closed. To leave the floor, the visitor would use the same system in reverse. At the time of the June incident, visitors could come and go to the second floor unescorted. Additionally, Bayou Shores had video surveillance capabilities in the elevator area, but no staff member was assigned to monitor either elevator. Mr. Selleck, Advanced Center’s administrator, sought JN’s placement at Bayou Shores because he thought Bayou Shores offered a more secure environment than Advanced Center. Advanced Center was an unlocked facility and the only precaution it had to thwart exit-seeking behavior was by using a Wander Guard.10/ JN was admitted to Bayou Shores on Friday evening, June 20, 2014, from Advanced Center. Based upon JN’s admitting documentation, Bayou Shores knew or should have known of JN’s exit-seeking behavior. JN slept through his first night at Bayou Shores without incident. On June 21, his first full day at Bayou Shores, JN had breakfast, walked around the second floor, spoke with staff on the second floor and had lunch. At a time unknown, on June 21, JN left the second floor and exited the Bayou Shores facility. JN did not tell staff that he was leaving or where he was going. Upon discovering that JN was missing, Bayou Shores’ staff thoroughly searched the second floor. When JN was not found there, the other floors were also searched along with the smoking patio. JN was not found on Bayou Shores’ property. Thereafter, Bayou Shores’ staff went outside the facility and located JN at a nearby bus stop. The exact length of time that JN was outside Bayou Shores’ property remains unknown. Staff routinely checks on residents. However, there was no direct testimony as to when JN left the second floor; just that he went missing. Staff instituted the policy and procedure to locate JN, and did so, but failed to undertake any investigation to determine how JN left Bayou Shores without any staff noticing. NOTICE OF INTENT TO DENY AHCA’s Notice was issued on January 15, 2015. Bayou Shores was cited for alleged Class I deficient practices in each of the three conducted surveys: failure to have end-of-life decisions as reflected in a signed DNR order; failure to safe- guard residents from a sexual offender; and failure to prevent a resident from leaving undetected and wandering outside the facility.
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 revoking Bayou Shores license to operate a nursing home; and denying its application for licensure renewal. DONE AND ENTERED this 21st day of July, 2016, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 2016.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings. Petitioner, Stacey Health Care Centers, Inc., is licensed to operate Riverside Care Center, located at 899 Northwest Fourth Street, Miami, Florida, as a nursing home in compliance with Chapter 400, Part I, Florida Statutes, and Chapter 10D-29, Florida Administrative Code. On July 9, 1986, James A. Bavetta, assistant area supervisor, Office of Licensure and Certification, made a visit of Riverside's facility and determined that Ralph Stacey, Jr., the administrator of record, was acting in the capacity of administrator for two facilities, the subject facility and another facility in Kentucky, without having a qualified assistant administrator to act in his absence. (Respondent's Exhibit 1) Ralph L. Stacey Jr., is a licensed nursing home administrator in the States of Ohio, Kentucky and Florida. He has been licensed in Kentucky and Florida since 1974. At the time of Mr. Bavetta's visit and inspection during July, 1986, Ralph Stacey, Jr., was in Cincinnati, Ohio preparing the payroll for Stacey Health Care Centers. During this time period, Ralph Stacey, Jr., served as the administrator for the subject facility, Riverside Care Center, and another facility in Kentucky and did not have a qualified assistant administrator employed to act in his absence. However, once Mr. Bavetta issued his recommendation for sanctions, Petitioner, as part of its plan of correction, has employed a licensed administrator who is presently on staff and serves as Riverside's assistant administrator during the administrator's absence.
Recommendation Based on the foregoing findings of fact and conclusions of lawn it is RECOMMENDED: The Department of Health and Rehabilitative Services enter a Final Order imposing an administrative fine in the amount of One Thousand Dollars ($1,000.00) upon Stacey Health Care Centers- Inc., d/b/a Riverside Care Center, which amount shall be payable to Respondent within thirty (30) days after entry of Respondent's Final Order. RECOMMENDED this 18th day of September, 1987, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 18th day of September, 1987. COPIES FURNISHED: Kenneth S. Handmaker, Esquire MIDDLETON & REUTLINGER 2500 Brown & Williamson Tower Louisville, KY 40202-3410 Leonard T. Helfand, Esquire Office of Licensure and Certification Department of Health and Rehabilitative Services 5190 Northwest 167th Street Miami, Florida 33014 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 R. S. Power, Esquire Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard -Building One, Room 407 Tallahassee, Florida 32399-0700
The Issue Whether the Certificate of Need application of Hospice of the Palm Coast to establish a new hospice program (CON Action No. 9798) in AHCA Hospice Service Area 11 (Miami-Dade and Monroe Counties) should be approved.
Findings Of Fact THE PARTIES The Agency for Health Care Administration AHCA is the single state agency responsible for administering the Certificate of Need program, and for licensing hospices and other programs and facilities pursuant to the authority of the Health Facilities and Services Development Act, Sections 408.031 - 408.045, Florida Statutes. In performing these duties, AHCA determines, on a semi- annual basis, the net numeric need for new hospice programs. The Agency publishes such need in the Florida Administrative Weekly. Hospice of the Palm Coast, Inc. Hospice of the Palm Coast, Inc., is a not-for-profit Florida corporation, developed for the purpose of establishing hospice programs in Florida. Palm Coast is a wholly-owned subsidiary of Odyssey Healthcare Corporation (Odyssey"), a for-profit and publicly traded corporation. Odyssey is one of the largest for profit providers of hospice service in the United States, operating 74 hospice programs in 29 states. Odyssey has successfully implemented start-up hospices in other states. While Odyssey currently has no hospice operations in Florida, it is in the process of seeking licensure and certification for a new hospice program in Volusia County. The Volusia County program employed Odyssey's rapid start-up model. Palm Coast complies with all of Florida's not-for- profit corporation laws and filing requirements and meets the definition of a "corporation not for profit" contained in Chapter 617, Florida Statutes. Palm Coast has its own Articles of Incorporation and By-Laws; has its own audited financial statements; and has its own managing board. Palm Coast will have its own bank account into which all of its revenues and out of which all of its expenses will be paid. If Palm Coast has a positive cash flow from its operations, those funds will stay with Palm Coast to be used for patient care and operations. Palm Coast will comply with all Florida not-for-profit laws relating to surplus funds. Odyssey has experienced compliance issues with respect to some of its hospice programs in other states. In five of its programs, Odyssey has exceeded Medicare "cost caps" that limit the total number of eligible days that a hospice program may bill the federal government for reimbursement. In addition, several of Odyssey's programs have been found not to meet certain Medicare "conditions of participation" due to significant operational deficiencies. All of these "conditional level" deficiencies have been corrected. Odyssey has recently received notification from the Department of Justice ("DOJ") of an investigation into the manner in which it provides hospice services. As a result, Odyssey made the required Securities and Exchange Commission ("SEC") filings to notify the public of the pending DOJ investigation as a "significant event." A class action lawsuit is also currently pending against Odyssey by some of its shareholders and investors who allege that the company admitted hospice patients who were not eligible for Medicare, but that claims were submitted that they were so eligible for Medicare. As a result, Odyssey's financial results were materially inflated due to its exceeding Medicare "cost caps." Recent changes have occurred at the senior management level within Odyssey, including the resignation of its Chief Executive Officer in late 2004, and the termination of its Executive Vice President of Marketing in January 2005. Since the announcement of the DOJ investigation and the class action lawsuit, Odyssey's stock value has fallen from about $19.00 a share to $13.00, a decline termed "material" by the company's Chief Financial Officer. VITAS Healthcare Corporation of Florida VITAS Healthcare Corporation, a for-profit entity, is the largest provider, in terms of patient days, in the United States. It is currently in 12 states with 32 licensed programs serving an average daily census of 9,000 nationally. VITAS currently has two for-profit entities operating in Florida: VITAS-Florida and VITAS Healthcare Corporation of Central Florida. Collectively, these two operating entities have five licensed for-profit hospices in Florida. VITAS is the only for profit hospice provider allowed to operate in Florida pursuant to special exemption language contained in Section 406.602(5)-(6), Florida Statutes. VITAS currently operates hospice programs in Districts 11 (Miami-Dade and Monroe Counties), 10 (Broward County) and 9 (Palm Beach County). In addition to the VITAS hospice program in District 11, five other hospice programs are currently licensed in Miami- Dade and Monroe Counties. None of these five programs intervened or participated in these proceedings. All of VITAS' hospice programs are in full compliance with Medicare conditions of participation, and none of its programs have exceeded Medicare "cost caps." The VITAS program has been in Miami-Dade County for 28 years, and was the first VITAS program in the country, having been initiated by Hugh Westbrook, a Methodist Minister, and Ester Colliflower, a nurse with an oncology background. Both were professors at Miami-Dade Community College where they offered courses on death and dying issues, and were early pioneers in the hospice movement. VITAS was instrumental in the development of hospice licensure standards in Florida, and in the establishment of federal Medicare benefits for hospice services. VITAS has been a leader in hospice research and development, and has created pain management tools and hospice care manuals that are widely used among hospice providers around the nation. For example, VITAS developed the Missoula-VITAS quality of life index, which is licensed and used by over 125 hospices nationwide. The publication "20 Common Problems in End of Life Care" was authored by VITAS employees and is considered a standard teaching textbook for delivery of hospice care. HOSPICE CARE Hospice care is a medically coordinated group of services that is designed for patients who are terminally ill, having a life expectancy of less than six months. The patient's and family's needs are multi-dimensional and include physical, emotional, spiritual, financial, and social care. Hospice care includes physician-directed medical care, nursing services, social work services, bereavement counseling, and other ancillary services such as community education. Hospice care is provided by an interdisciplinary team of professionals, including physicians, nurses, social workers, home health aide services, spiritual advisors (chaplain, priest, rabbi, or other), and bereavement counselors. Palm Coast will provide an interdisciplinary team to provide care in its program that is reflective of the Miami-Dade community. A hospice is also required, pursuant to federal and state regulations, to involve community volunteers in the delivery of hospice services. Volunteers may run errands, perform non-medical duties (such as reading or entertainment) or provide companionship to the patients and their families. Volunteers provide an extra level of service to the patient. Palm Coast will hire a full-time volunteer coordinator who will recruit volunteers for its program. Hospice care is both a philosophy of care and a method of care for terminally ill patients, their families, and loved ones. The philosophy behind hospice care is to provide pain and symptom management for those patients who can no longer be cured. A patient must choose hospice in order to receive its services when the goal is no longer to cure a disease, but to live as pain and symptom free as possible. Treatment for pain control is part of the regimen; treatment for cure is not. Hospice is reimbursed by Medicare, Medicaid, CHAMPUS/Tri-Care (for the military), and some commercial insurance programs. Under the Medicare reimbursement system, hospice programs are reimbursed based on one of four identifiable levels of service: routine home care; in-patient care; continuous care; and respite care. Routine home care is the basic level of care, and is provided as long as a hospice can care for a patient in a home- like environment including a nursing home or assisted living setting. Approximately 95 percent of the care provided by Odyssey is routine care. The next level of care is continuous care, which provides between eight and 24 hours of nursing care per day. Continuous care can be provided in a routine home setting, a nursing home, an assisted living setting, or in a hospital. The third level of care is in-patient care, which a hospice can provide in a hospital, a skilled nursing unit, or in a freestanding hospice in-patient facility operated by a hospice. Typically, in-patient care is required when there is a change in the patient's condition which requires hospitalization. It can also be provided at the start of service to help the patient make the transition from a curative method of care to a palliative one. If a hospice program does not have its own in-patient facility, it will contract with a skilled nursing facility or hospital. In such cases, reimbursement is seen as a "pass through" because the amount the hospice receives for providing care is then provided to the in- patient unit of the hospital or other health care facility where the patient is being treated for the acute episode. The final level of hospice care is respite care, which is designed for caregiver relief and is not necessarily indicated based upon a change in the patient's condition, but when the need arises for very temporary caregiver relief. Medicare reimburses the four levels of hospice care at varying rates. Certain services are required by specific hospice patients that are not necessarily covered by Medicare and/or private or commercial insurance. These services will be paid for by Palm Coast as part of its commitment to patient care. Some of these services include music therapy, pet therapy, art therapy, and aromatherapy. In addition, more complicated and expensive non-covered expenses, such as palliative chemotherapy and radiation may be indicated for severe pain and symptom control. The primary reimbursement agent (approximately 90 percent) for hospice is Medicare. As a result, the government fixes the rates to eliminate opportunities to compete on pricing. Hospice cannot discount prices of its services, and rarely do patients and families pay for any services. The services are a prepaid benefit so that any competition in hospice is most simply expressed as the number of providers in a given market providing services on a non-economic basis. With multiple providers in a service area, quality of care and quantity of services rises for the patients and their families. Most major metropolitan areas in the country have several hospice providers. For example, Atlanta has 30-35 providers; Dallas has about 30 hospice programs; and Chicago has 20-30 providers. The average number of providers in a city the size of Miami (approximately two million people) would range from 20 to 30. The largest sources of referrals for hospice care are hospitals, nursing homes, and assisted living facilities, and physician groups. PALM COAST'S APPLICATION Palm Coast proposes to establish a new hospice program to serve persons in Hospice Service Area 11, which is comprised of Miami-Dade and Monroe Counties. Palm Coast filed a timely Letter of Intent on or before April 26, 2004, followed by a timely initial CON application on or before May 26, 2004. Both the LOI and the CON application were accepted by AHCA. Palm Coast filed its omissions response, which was accepted by AHCA, on June 30, 2004. The Agency's preliminary action was to approve Palm Coast's application for CON No. 9798, for the establishment of a hospice program in Hospice Service Area 11. Fixed Need Pool On April 9, 2004, AHCA published a notice in the Florida Administrative Weekly indicating a numeric need for one additional hospice program in Service Area 11. In forecasting need, the Agency first forecasts the expected number of deaths within a Service Area, in four categories: Cancer under age 65, Cancer over age 65, Non-Cancer under age 65, and Non-Cancer over age 65. The Agency next applies a statewide average (called a "conversion rate") to each of the four categories to forecast the expected number of hospice patients for a Service Area. The Agency takes that number and subtracts from it the number of patients who are currently being served by the existing hospice programs in the Service Area to arrive at the "net need" of patients who are expected to need hospice care in the future. If the net need exceeds 350, then numeric need for a new hospice is demonstrated. The forecasted need for hospice patients in Service Area 11 was 2,093 patients, which greatly exceeds the need threshold of 350 identified in the fixed need pool rule. The numeric need for one additional hospice program in Service Area 11 is indicated. In fact, based upon the 350 patient threshold for numeric need, the argument could be made that, based on the numeric need formula alone, the net need for hospice programs in Service Area 11 is five. The hospice fixed need pool rule only permits need for one new program to be published. Moreover, in an attempt to give new providers sufficient time to start up their programs, the net need will be shown as zero if any hospice programs are less than two years old. Currently, Service Area 11 has six hospice providers: The Catholic Hospice, Douglas Gardens Hospice, Hospice Care of Southeast Florida, Hospice Care of South Florida, Hospice of the Florida Keys, and VITAS Healthcare-Dade. None of these entities challenged the fixed need pool. The parties have a marked difference of opinion as to whether a need exists for Palm Coast's proposed hospice program. Palm Coast, through its expert, Mark Richardson, confirmed the Agency's need determination, and also performed other needs analyses to determine the market's overall need. He noted that the Agency uses a statewide average, which includes areas where the conversion ratios are much higher than the average. He states that AHCA uses an expected average of what is occurring statewide rather than an expected cap. His analysis of Service Area 11, especially the unmet need of 2,093 hospice patients, is the largest unmet need ever seen in Florida, and clearly indicates the need for four to five new hospice programs in Service Area 11. Mr. Richardson opines that what drives the large unmet need is the local utilization below the statewide utilization in each of the four categories: Cancer over age 65, Cancer under age 65, Non-cancer over age 65, and Non-Cancer under age 65. This is unlike other service areas where potentially only one or two of the categories show underutilization. Further, according to Mr. Richardson, a look at the continuation of historical trends reveals that significant growth will occur within the marketplace, which will produce enough volume to support Palm Coast's program without adversely affecting the existing providers' programs. The incremental growth alone, he states, indicates the need for another hospice program, and further demonstrates that the existing programs will suffer no adverse affects. VITAS opposes Palm Coast's analysis of numeric need by noting that the "critical factor" in the Agency's determination of a net numeric need for one hospice program in Service Area 11 is the use of the statewide average utilization or "penetration rate" in the numeric need formula. VITAS contends that the use of the local hospice utilization rate and current hospice admissions for Service Area 11 will yield a net numeric need of only 46 patients. VITAS concludes that no numeric need for an additional hospice exists in Service Area 11 first by noting that, while the statewide utilization rate for hospice is 48 percent, the Service Area 11 utilization rate is only 38 percent, a full 10 points below the statewide average. VITAS offers, as proof of why the utilization rate is so much lower in Service Area 11 than in Florida as a whole, that Miami-Dade County is unique due to its multicultural, particularly Hispanic, population. Palm Coast's expert, Deborah Hoffpauir, testified that the addition of more hospice providers to an area, tends to increase the utilization rate within the area. VITAS' expert, Deirdre Lawe, testified that Miami-Dade County has six providers, yet has a utilization rate far lower than the statewide rate. Six of nine Florida Hospice Service Areas with high utilization rates, however, have only one provider. In some states, where CON regulation does not exist, metropolitan areas may have as many as 30 hospice providers. These areas, however, do not experience as high a penetration rate as CON-regulated Florida. The low utilization rate in Service Area 11, according to VITAS, is explained by Miami-Dade County's 57 percent Hispanic population. Nationally, the Hispanic population utilizes hospice at a lower rate than the non-Hispanic population. A study published in 2000, by the National Hospice and Palliative Care Organization shows that Hispanics accounted for 4.5 percent of national deaths, but accounted for only 2 percent of hospice patients. More recent data indicate that that the hospice penetration rate for Hispanics is 26 percent at the national level, significantly less than the penetration rate for Miami-Dade County's Hispanics of 34 percent. The hospice penetration rate in Miami-Dade County in 2003, was 34 percent compared with 45 percent for the non- Hispanic population. Palm Coast's expert, Mark Richardson, conceded that cultural differences can account for variation in the rates at which a population will use a health care service. He did not factor the high percentage of Hispanics in Miami-Dade County into his calculations, but relied upon AHCA's fixed need pool projection of need for one additional hospice program. Patricia Greenberg, VITAS' health planning expert, testified that the fixed need pool overstates the need for hospice care in Miami-Dade County due to the lower utilization rate for hospice services among the Hispanic population. To arrive at this conclusion, she examined the differences between the Hispanic and non-Hispanic populations to determine why the latter utilizes hospice services at a significantly greater rate. Looking at the three adjoining southeast Florida counties (Miami-Dade, Broward, and Palm Beach), Ms. Greenberg found an inverse relationship between the percentage of Hispanic deaths in the county, and the hospice penetration rate: the higher the percentage of Hispanic deaths, the lower the hospice penetration rate. Testimony from additional witnesses at hearing pointed to the reasons that fewer Hispanics seek hospice care than in the non-Hispanic population. A strong sense of family responsibility; religious values of a largely Catholic population; fear of authorities by illegal aliens and their family members; and reluctance to discuss death and dying were identified as cultural norms among the Hispanic population. Ms. Greenberg, in challenging the results of the fixed need pool calculation of need for one additional hospice program, re-calculated the need using the Miami-Dade utilization rate, rather than the statewide rate. This resulted in no need for another hospice program in Service Area 11 since the calculation results in a net number of patients to be served of 46, far below the Agency's standard of 350. In arriving at her net need, however, Ms. Greenberg erred by not utilizing the data for the same period throughout her calculation of need. She used the 2003, number of hospital admissions and the 2003, number of hospice deaths for Service Area 11 in the four hospice categories to determine what the specific Service Area 11 penetration rates for these categories would be. She then applied this Service Area specific penetration rate to the 2005, projected deaths. This calculation provided Ms. Greenberg with the total number of forecasted admissions of 7,733 (versus 9,401 projected patients using the statewide methodology). Then, rather than subtracting the 2003, admissions of 7,308 (used by Ms. Greenberg to determine the applicable penetration rate), she instead substituted a different data set, the 2003-2004, admission number. By using the 2003-2004, admissions rather than the 2003 admissions, the results of the calculation were flawed. Had Ms. Greenberg used the 2003, admissions number in her Service Area 11 specific need calculation, she would have subtracted 7,308 admissions from the total number of 2005, projected admissions of 7,733 to arrive at a projected need of 425 which, using the Agency's baseline of 350 admissions, thus demonstrating the need for a new program. The testimony was unclear as to why Ms. Greenberg used one incorrect set of data to demonstrate no numeric need for an additional hospice program, but the application of the correct data, even using her Service Area specific (not, as sanctioned by the Agency, the statewide methodology) shows numeric need for a new hospice program. Financial Feasibility and Underlying Assumptions Palm Coast performed a detailed evaluation of the proposed project on the cost of other services provided by it and its affiliate, Odyssey HealthCare, Inc. ("Odyssey"). This evaluation considered the magnitude of the proposed project; the expected benefit the project will generate for Palm Coast; and the expected patient charge increase levels anticipated during the first two years after the proposed project comes on line. Although Palm Coast is a newly formed corporation, a review of the financial strength of its management affiliate, Odyssey, clearly demonstrates the financial resources necessary to develop and operate the proposed project. With $39 million in cash and investments, and a $31 million operating income during fiscal year 2003, Odyssey has the resources necessary to ensure that Palm Coast is developed as a strong community provider, and has all the resources necessary to operate as a full service hospice provider in both the short and long term. The proposed project will provide a significant amount of income to Palm Coast by the second year of operations, and will accomplish this with a modest increase in patient charges of 2 percent in the second year of operations. Palm Coast intends to fund the initial capital required of $487,125 from the proceeds of an inter-company loan from Odyssey. Palm Coast shows a strong performance in both the first and second year of operations. The proposed project is financially feasible in both the short and long term. The start-up costs are budgeted at $380,000, which is $250,000 more than what is typically seen in other hospice applications. This additional money provides the foundation for what Palm Coast calls a "rapid start up" of the proposed project. Under a rapid start-up, as proposed by Palm Coast, and employed by Odyssey in other new operations around the country, including Volusia County, Florida, the program will begin to admit patients once licensure is achieved, but even before Medicare certification is attained. This rapid start-up was taken into account by Palm Coast's health care planners in generating the patient days figures used for Palm Coast's financial projections. A rapid start-up program will cost Palm Coast money that it will not be able to recoup from Medicare since it will be for services provided pre-certification. Palm Coast's parent corporation, Odyssey, has agreed to provide the funds necessary for this project. With $179.6 million in assets, $144.7 million in shareholder's equity, $274.3 million in revenues, and $27.6 million in cash flows from operating activities, Odyssey has the strength to provide the necessary funding for this project. Palm Coast's application fully complies with the requirements of Schedules 1 and 3 of the CON application. Schedule 2 sets out a complete listing of all projected and proposed capital projects planned by Palm Coast. This Schedule completely and accurately depicts all capital projects that are approved or underway. Schedule 4 is not applicable to this project. The utilization and patient day projections set out in Schedule 5 are reasonable and appropriate. The staffing forecasts set out in Schedule 6A reflect the staffing necessary for the patient volume and levels of services expected for the proposed program. The projections are consistent with the experience of Palm Coast's management affiliate, Odyssey's prior start-up experience, and is based upon a reliable model used by Odyssey to staff its operations and administration. This staffing model meets the guidelines established by the National Hospice and Palliative Care Organization ("NHPCO"). The salaries depicted in Schedule 6A are reasonable and reflect salary rates commensurate with the local area, and trended forward approximately 3 percent annually. The proposed project is financially feasible in the long term as reflected on Schedules 7A and 8A. In developing the financial portion of the CON application, Palm Coast's expert health care planners began with a baseline template model provided by Odyssey. This template served as the model for the categories of net revenues and expenses that Odyssey expected Palm Coast to experience at its Service Area 11 program. The model was not used for or intended to serve as the basis for any volume projections. The projected volumes needed to project patient days were provided by Mr. Richardson. Since projected revenues are driven by patient days, the projected admissions for Year 1 and Year 2 must be translated into a patient day forecast. Accordingly, the projected admissions for Year 1 and Year 2 were multiplied by a 70-day length of stay. The 70-day length of stay is reasonable when compared with Odyssey's national average length of stay and when comparing it with the average length of stay in Service Area 11. Accordingly, Palm Coast forecasted Year 1 volume of 26,320 patient days and Year 2 volume of 33,250 patient days. Mr. Richardson than provided Year 1 and Year 2 volume forecasts to Palm Coast's financial expert, Rick Knapp, to assign a dollar amount to the volume to include in the CON Application financial schedules. Mr. Knapp then projected the gross and net revenues based upon the projected volumes, and for Year 2 concluded that the program would generate a pre-tax income of $688,000, thereby supporting his conclusion that the project is financially feasible. To confirm the financial feasibility of the project, Mr. Knapp also performed reasonableness tests. First, he determined whether the information provided by Odyssey "offended his sensibilities." He considered the fact that Odyssey is experienced in operating hospices, so it is reasonable to assume that it would not start up a program it did not believe would succeed. This is supported by the fact that Odyssey has not had any of its 29 start-up projects fail. Mr. Knapp then examined the most recent 10K filing by Odyssey with the Securities and Exchange Commission, and noted that the ratio of expenses to net revenues was approximately 81 percent. This compared favorably with the pro forma projections by Palm Coast of 88 percent. Mr. Knapp reviewed the budget provided by Odyssey and found it to be a credible document. He made changes to this document giving effect to Mr. Richardson's final projected volume and final projected patient class mix. This became the basis for Schedule 7A for net revenues and Schedule 8A for projected expenses. VITAS challenged Palm Coast's patient day and patient mix projections, opining that the patient volume projections were overstated by Palm Coast and that the patient mix projections are unreasonable based upon VITAS' experience in Florida and Service Area 11. VITAS believes that the volume projections of Palm Coast are unreasonable based upon the Odyssey model provided to Palm Coast's health care experts and VITAS' experience. VITAS points to a more gradual "ramp up" of patient volume than that projected by Palm Coast. VITAS believes that Palm Coast's projections are far too aggressive for a start-up program. VITAS further points to its own national average length of stay of approximately 50 days and the overall hospice national length of stay of 47 days as more reasonable projections of what Palm Coast should expect, even though Palm Coast's national length of stay averages 75-80 days. Additionally, VITAS opines that the 70-day average length of stay proposed by Palm Coast is unreasonable in light of its proposed patient mix which includes 9 percent of its patient days as being in-patient, which is generally a much shorter, acute length of stay than the other forms of hospice care provided. The level of service mix in a hospice program has a direct impact on projected average length of stay, patient admissions, patient days, staffing requirements, revenues, and expenses. Medicare reimbursement for the different levels of service is significantly different. Medicare reimbursement for in-patient days is projected to be $538.80, while reimbursements for routine home care days is projected at $121.34, for continuous care days is projected at $708.22, and for respite care days is projected at $124.81. In its CON Application, Palm Coast projects the following level of service mix by the percentage of patient days in each category: routine home care--89 percent; in-patient care--9 percent; continuous care--1 percent; and respite care--1 percent. At hearing, Palm Coast's witnesses conceded that the projected level of service mix in the CON Application was a mistake, and is not the level of service mix that is actually expected for the proposed hospice program. The mistake occurred when Mr. Richardson relied upon Odyssey's 10K filings showing the level of service breakdown as a percentage of revenues, but then used these figures to project the percentage of patient days. Mr. Knapp, the Palm Coast financial expert, who prepared the financial pro formas, conceded that, because of the error in level of service mix, the projection of revenues on Schedule 7A of the CON Application is not correct, and that, viewing this financial schedule alone, there is a material difference between the actual expected revenues and the projection of revenues on Schedule 7A. For example, the in- patient component as set forth in the CON Application, accounts for nearly 30 percent of projected revenues, when in reality it is expected that only 9 percent of the revenues would come from this source. Mr. Knapp conceded that the mistake in level of service mix also has a material impact on the projected income and expenses shown on Schedule 8A. Although the errors in service mix have a material affect on the projections contained in Schedules 7A and 8A, Mr. Knapp opined that, since in-patient revenues are essentially a "pass through" since the hospice pays the money received from Medicare directly to the in-patient facility, the effect on the bottom line for the Palm Coast program would not only be immaterial, but it would improve the profitability of the proposed program. Every scenario proposed by Mr. Knapp in redistributing the service mix leads to an enhancement of Palm Coast's bottom line for the project. The most likely redistribution of the patient mix would be 98 percent routine home care; 1 percent continuous care; and 1 percent respite care. John Williamson, the Agency's financial reviewer for the Palm Coast CON Application, testified that he was not aware of the errors in service mix when he reviewed the Palm Coast application. While he opined that he believed the service mix errors would not have an adverse impact on the bottom line of the proposed program since in-patient revenues are essentially a pass through, he could not give a firm opinion without personally "crunching" the new numbers. Ms. Greenberg, VITAS' health planning expert, testified that the change in service mix was critical to understanding the proposed hospice program, and that any material change to the service mix would have to be modeled and reviewed to determine the feasibility of the proposed program. Ms. Greenberg concluded that the error in service mix would result in a significant decrease in revenues ($1.6 million) and result in a smaller payment to Odyssey, the managing affiliate to Palm Coast ($112,000 based upon a 7 percent management fee). This, she states, along with the failure of Palm Coast to accurately reflect all of its expenses in its financial pro formas would result in a deficit to Odyssey and might, she implies, call into question whether this is a worthwhile project for Odyssey. Ms. Greenberg further testified that Palm Coast failed to account for various expense items in its financial pro formas that would significantly reduce, or even eliminate, its projected net profits of $450,167 in Year 1 and $687,560 in Year Specifically, she noted that the missing expense items were: federal income taxes, employee fringe benefits, property taxes, the "unified rate" shortfall for nursing home residents, insurance, and palliative chemotherapy and radiation. Mr. Knapp conceded that the federal income taxes, property taxes, and the unified rate shortfall were not included in the pro formas. With respect to federal income taxes, Mr. Knapp noted that the payment of any income taxes due would never take a project from a profitable status to an unprofitable status since they are paid only on the profit margin. The property taxes not reflected on the pro formas amount to $2,000, which Mr. Knapp deemed immaterial. The unified rate shortfall should have been included on the pro formas, but amounts to only 1 percent of the net revenues of the project, not 2 percent as suggested by Ms. Greenberg. The other expenses that VITAS testified were omitted by Palm Coast were "embedded" in the management fee Palm Coast proposes to pay its affiliate Odyssey. Odyssey's Chief Financial Officer testified that the insurance expense is included within the management fee. Mr. Knapp testified that the fringe benefits of 20 percent were included in the financial schedules as well as within the management fee (9.1 percent was reflected as payroll-related such as Medicare and FICA, the remainder such as health insurance within the fee). Ms. Greenberg's opinion that an additional 17 percent should be added to the fringe benefits category is not in keeping with Odyssey's experience as a national provider of hospice care. Ms. Greenberg noted that the pro formas did not include $107,000 for a satellite office in Monroe County. Since the satellite office was made a condition on the CON by the Agency, Palm Coast could not have anticipated this at the time of its submittal of the CON Application. Although this will have an effect on the expense side of the pro formas, Palm Coast has the ability to fund this condition. Further, the expected revenues of $139,000 from the satellite office will more than offset any start-up costs. Finally, Ms. Greenberg noted that Palm Coast failed to provide for palliative chemotherapy or radiation in its pro formas. Since the number of patients requiring such care cannot be estimated, and since this is a non-reimbursable expense, Palm Coast did not budget for this type of care. Palm Coast is committed to providing this care when necessary. After concluding that Palm Coast understated its expenses and that its service mix was flawed, Ms. Greenberg recast the Palm Coast financials in six possible scenarios. None of the six showed financial feasibility for the proposed hospice program. Ms. Greenberg attempted to achieve her goal of demonstrating the Palm Coast project will not be financially feasible in the short term (her analysis does not extend beyond two years) by not accepting Palm Coasts 70-day average length of stay projections; by not accepting Palm Coast's rapid start-up program because it was not accounted for in the financials; that the overstatement of the in-patient days renders the project not financially feasible; and that the omission of significant expense items significantly reduces or even eliminates the projected profits in the first two years of the project. Palm Coast responded to the six scenarios raised by VITAS' expert by demonstrating that the re-cast financials have significant calculation errors and that conservatism was built into the financial pro formas (e.g., depreciation expenses that were amortized in accordance with GAAP which would have a significant positive effect on the bottom line if not amortized) which VITAS overlooked in analyzing them; VITAS refuses to acknowledge that the rapid start-up program was considered by the Palm Coast Health care planners when developing the CON Application (as evidenced by the higher number of patient days forecasted than is typical for a hospice application); VITAS refuses to acknowledge Odyssey's national average length of stay data; VITAS refuses to accept the inclusion of fringe benefits and other items in the management fee to be paid by Palm Coast to Odyssey; and VITAS refuses to admit that the in-patient days error, when corrected, can only have a positive impact on the bottom line for Palm Coast. Patient Care, Community Education, and Community Support Palm Coast will provide each patient with a "Circle of Care," an interdisciplinary team of Palm Coast employees, volunteers, and the patients' physician dedicated to providing a high level of care and assistance to patients and their families. This interdisciplinary team specializes in end of life care and uses experts in pain and symptom management. The manager of the team is the registered nurse who assesses the needs of the patient and family and develops a specific plan of care with the physician. The case manager (all are registered nurses) coordinates care with others on the team while the patient's physician works with Palm Coast's medical director and other team members to ensure that the symptoms are controlled, the pain is managed, and the patient and family are informed. In addition to the nurse case manager, the patient's attending physician and the medical director, Palm Coast's interdisciplinary team includes: A chaplain who addresses the spiritual concerns of patients and family members within each patient's individual belief system, as well as addressing concerns of a more generalized spiritual nature; A home healthcare aide who is specially trained to work with the terminally ill and who will provide direct patient care; A social worker who helps with a wide variety of psycho-social needs of patients and families ranging from financial considerations to dealing with grief and the loss of a loved one, as well as providing access to community agencies for support programs; Trained volunteers who provide companionship and non-medical services for the patient, respite time for the family, and support at the time of death and during bereavement; A bereavement coordinator who provides support groups, newsletters, and referrals to community services. The bereavement coordinator also provides pre-bereavement assessment and counseling, and can provide individual counseling as well. The bereavement coordinator provides support to family members and significant others for up to 13 months following a patient's death; An on-call nursing team is always available after hours and on weekends for visits and phone consultation. Other specialists, such as nutritionists and physical, speech, or occupational therapists, are part of Odyssey's care services, and are added to a patient's team as needed. Palm Coast's team will continue to care for the family even after the patient's death. Palm Coast will have a variety of options to help families through their difficult time, including the following: one-on-one counseling; grief support groups; written correspondence related to bereavement, loss, and grief; written materials, articles, and resources; bereavement letters; memorial services; holiday bereavement programs; and referral to community agencies as needed. These bereavement services begin with the initial assessment of the patient into the program, even though most do not occur until after the patient's death. A significant component of Palm Coast's proposed hospice program will be its ability to provide community education and outreach to a culturally diverse market like Miami-Dade County. Palm Coast, through its affiliation with Odyssey, will bring a wealth of experience in working in culturally diverse markets with different ethnic groups. Palm Coast currently offers services in numerous locales in culturally diverse areas. Of specific relevance to the large Hispanic population of Miami-Dade County, Odyssey has significant experience in working in Hispanic areas. For example, Odyssey provides services in El Paso, Texas, a 90 percent Hispanic area, and employs staff, 100 percent of whom are bi-lingual, to serve this group. Additionally, Odyssey has programs in other parts of Texas, such as San Antonio, Conroy, Brownsville, and Houston, that have large Hispanic populations. In order to assure that appropriate services are provided in culturally sensitive areas, Odyssey identifies and hires staff that is fluent in the culture's first language, understands the particular culture, and is familiar with the geographic location. Odyssey has dedicated interdisciplinary teams that are comprised of Hispanic medical directors, home health aides, social workers, Catholic priests, ministers, and nurses. Palm Coast will have access to all of Odyssey's resources that have been developed for use in culturally diverse areas, like Miami-Dade, through its management agreement with Odyssey. While the Miami-Dade Hispanic community is predominantly Cuban, not Mexican as in Texas, the techniques and methods developed by Odyssey for entrance into a culturally diverse community are the same, and Palm Coast will employ those techniques in Service Area 11. Referrals are most important to the success of a hospice program. The major sources of referrals for hospice patients are physician groups, nursing homes, assisted living facilities, and hospitals. Prior to submitting its CON Application, Odyssey sent staff to Miami-Dade County to speak with local area health care providers and to solicit letters of support. Although they visited physician groups, nursing homes, assisted living facilities ("ALFs"), and hospitals, Odyssey was unable to secure any letters of support from those organizations. Odyssey did receive four letters of support from Medicaid independent support coordinators which were submitted with its CON Application. VITAS is well entrenched in the local health care community. VITAS has contracts with nearly every hospital provider in Miami-Dade County, and has established hospital in- patient units at four hospitals, including at Hialeah Hospital, located in the midst of the Cuban-American community. Two additional in-patient units are expected to open in the near future, including one at Kendall Regional, considered to be a largely Hispanic hospital. In addition to its contracts with hospitals, VITAS is well-established with contacts among the local physician community, receiving referrals from specialists in numerous areas. VITAS has contracts with over 90 percent of the nursing homes in the county and with multiple ALFs in the community. In addition to VITAS' established relationships in the health care provider community, the other hospice providers, while significantly smaller than VITAS, are well-established. Recently, the Miami Jewish Home and Hospital also established a hospice program in Service Area 11. Many of these other hospice providers in Service Area 11 cater to specific patient populations and referrals such as the Catholic and Jewish communities and individual nursing homes. While it is likely that each of the existing programs can serve more patients than they currently do, none of these other providers participated in the hearing or provided testimony as to why their numbers of patients are not greater. Palm Coast is not the only provider who engages in extensive community education and outreach in those communities it serves. VITAS has invested great resources to develop strong and successful community education resources. Such materials include separate sets of educational materials targeted to hospitals, physician groups, nursing homes, ALFs, and to patients and their families. These materials are available in English, Spanish, Creole, and other languages. One set of multi-lingual materials is known as "WINKS," an acronym for "What I Need to Know," which describes the problems encountered by health care professionals or patient families in working with a dying patient, as well as appropriate responses to common problems. Brian Payne, VITAS' General Manager for the Miami- Dade program, testified about the dedication of 10 full-time community outreach representatives who target hospital discharge planners, physician groups, nursing homes, ALFs, and other community groups for education and outreach programs. VITAS has also partnered with local educational institutions, including Miami-Dade Community College, and the two statutory teaching hospitals (Jackson Memorial and Mount Sinai) to ensure adequate education of the health care professional community. VITAS has also developed a specific program on hospice benefits that is incorporated as a required part of the licensure process for applicants seeking licensure as an administrator of an ALF. In addition to VITAS, other hospices reach out to the community and participate in community education. Although none of these programs testified or offered evidence at hearing, it is fair to assume that they do not provide community education or outreach on a scale approaching VITAS', what Odyssey has done in other communities, or what Palm Coast proposes here. VITAS does not believe that the addition of Palm Coast will have a significant positive impact on community education and outreach concerning hospice services. Palm Coast believes that the more education that can be brought to an area about hospice, the greater the penetration rate of hospice patients will be. CONFORMANCE WITH DISTRICT HEALTH PLAN PREFERENCES Palm Coast's application conforms with the applicable district health plan. The District 11 Allocation Factors Report contains generic preferences relevant to certificates of need for all types of services, including hospice services, and also contains specific preferences related to hospice services. Palm Coast has recruitment and retention programs in place to develop staff. Recruitment efforts focus on the one- to-one nursing that hospice offers, the role of the nurse as the case manager, and the education benefits Palm Coast will offer through its management agreement with Odyssey. Additionally, Palm Coast will offer incentives to staff to attain the next level of professional development within their careers. Palm Coast will reflect the cultural diversity of the area in its staff and will also provide staff with access to translators 24 hours a day, seven days a week. Upon admission, Palm Coast's patients will be assessed as to their needs and the resources available to them with regard to disasters or emergency. A plan for such contingencies will be contained in the patient's admissions documents and covers fire safety, home care safety, and symptom control. When a Palm Coast patient is admitted, staff will assist in the completion of forms and will document the patient's understanding of his or her rights and responsibilities. Palm Coast has the ability to admit patients 24 hours a day, seven days a week, and will ensure that patients are admitted as soon as possible. Palm Coast (or Odyssey) sent representatives to meet with local providers, including facilities staff and Medicaid-independent support coordinators to identify the local characteristics of Service Area 11. These support coordinators provide advocacy services by helping patients find needed services. These support coordinators indicated that service has not always been timely received and they supported the Palm Coast application. While it is true that Palm Coast did not submit a large number of letters of support from the community for its proposed hospice program, since this is a case where numeric need had been demonstrated, letters of support are not as important as in a no need or not normal circumstances case. Palm Coast intends to implement a community education plan utilizing three or more dedicated community education representatives who will establish referral sources and educate medical providers regarding hospice care. VITAS admits that it is not the only hospice provider in the area and that there is nothing to prevent any of the area's health care providers from contracting with Palm Coast. The determining factor in establishing a relationship with a referral source is the ability to provide quality of care. Clergy are included in the interdisciplinary team that will be in place at Palm Coast. These staff will participate in a specific program that encompasses classical and contemporary theories on death, including: Grief; Myths about Grief and Mourning; the Kubler-Ross Stages; and Myths, Death, and Dying. Palm Coast, through its affiliation with Odyssey, will provide educational services to the medical community regarding the benefits of hospice care, especially to those patients with a non-cancer diagnosis since many people believe that hospice is only for cancer sufferers. Palm Coast will also utilize the hospice case studies developed by Odyssey for the physician audience in order to inform/educate referral sources concerning the indicators of hospice appropriateness for specific non-traditional hospice patients' diagnoses. Another tool that Palm Coast will utilize is a "Slim Jim," a quick reference guide with clinical information to educate physicians on when hospice may be appropriate. Palm Coast, through its affiliation with Odyssey, will have access to the extensive educational materials and protocols that Odyssey has developed for each disease process. Conceptually, these materials are similar to those developed and used by VITAS. The information and techniques acquired and applied from different locations around the country allow Odyssey and its affiliates, including Palm Coast, to continuously improve. These improved techniques and protocols, much like those brought to the area by VITAS, will permeate the system and will cause competitors to improve. As a start-up program, Odyssey will provide Palm Coast with a designated clinical team that will provide all the resources and support necessary to initiate the program. This team will provide education and training to the new office to ensure that everything is set up on a clinical basis and that all of the necessary pieces are in place. Palm Coast's affiliate, Odyssey, has a comprehensive volunteer program that will be implemented at this location. All volunteers will receive special training and will be under a staff member who is responsible for the volunteer program. Palm Coast intends to maintain a volunteer program that, at a minimum, equals 5 percent of the total patient care hours of all paid hospice employees and contract staff. CONFORMANCE WITH AGENCY RULE CRITERIA The application submitted by Palm Coast conforms with the preferences set forth in Florida Administrative Code Rule 59C-1.0355(4)(e). Palm Coast evidences a commitment to serve populations with unmet needs and has established the existence of such populations in Service Area 11. This conforms with Preference 1. Palm Coast's application conforms with Preference 2 in that it proposes to provide the in-patient component of its proposed hospice program through contractual arrangements with existing health care facilities. Palm Coast's application conforms with Preference 3 since it has demonstrated a commitment to serve patients who do not have primary caregivers at home, the homeless, and patients with AIDS. Palm Coast's application conforms with Preference 5 since it will provide services not covered by private insurance, Medicaid, or Medicare. These services include pet, music, massage and aroma therapies, dialysis, palliative radiation, and palliative chemotherapy treatments. Palm Coast will provide 2 percent charity care, in addition to serving all patients who present for care, regardless of their ability to pay. Accordingly, Palm Coast's application conforms with Florida Administrative Code Rule 59C-1.3055(5), and the District 11 Health Plan Criteria. Palm Coast's application conforms with Florida Administrative Code Rule 59C-1.0355(6), since its proposal contains a detailed program description including staffing and use of volunteers, expected sources of patient referrals, and projected number of admissions, by payer type, for the first two years of operation. The sources of patient referrals are reasonable and appropriate. The projected utilization for the proposed hospice program, including the number of admissions and payer mix, is reasonable and achievable utilizing Odyssey's rapid startup program. The Palm Coast start-up is reasonable based upon Odyssey's experience in start-up and operation of hospice programs around the country. Based upon the reasonableness of the utilization projections, the projected increase in admissions for Service Area 11, and Odyssey's experience in other start-up and ongoing hospice programs, Palm Coast should achieve a 5 percent market share by the second year of operations. The increase in overall utilization will, in part, be a result of the education and outreach efforts of Palm Coast. Palm Coast's projections are reasonable based upon the national experience, much of which has been in areas with large Hispanic populations, of Odyssey. Much as VITAS has experienced substantial growth over the years based upon its outstanding education and outreach, as well as its excellent standard of care, a sophisticated provider like Palm Coast, working with its management affiliate Odyssey should increase the market penetration of hospice services in Service Area 11. High level competition between providers such as VITAS and Palm Coast will increase utilization for both providers of hospice services. CONFORMANCE WITH APPLICABLE STATUTORY CRITERIA Palm Coast's application conforms with Section 408.035(1),(2), and (7), Florida Statutes. Need for an additional hospice program is evidenced by the availability, accessibility, and extent of utilization of like and existing health care facilities and health services in the service area, as well as the published need for one additional hospice program in Service Area 11. Palm Coast, through its affiliation with Odyssey, will have the necessary resources to fill current service gaps in Service Area 11. In each area where it currently provides service, Odyssey has implemented a community education plan specific to the needs of the area, including those areas with culturally diverse populations. Palm Coast will implement an appropriate program for the community in Service Area 11. While, clearly, VITAS does an excellent job in the community it serves, its own witnesses admitted that more can be done. Even with the 72 percent market share commanded by VITAS, the published fixed need pool projects 2,093 un-served patients. What was left unexplained at hearing is why the other five hospice providers have not picked up the excess of patients. Perhaps it is because these other providers have not devoted as many resources to education and outreach as has VITAS. Perhaps these other providers are seeking to serve only a specialized population of patients. The evidence at hearing did not provide answers to these questions. Further, while VITAS makes a compelling case for why market penetration is suppressed in the Hispanic population, they offered no specific data or studies to prove that the Hispanic (or in this case Cuban-American) population, given the proper education, will not better utilize hospice programs. Odyssey has proven its ability to respond to the needs of the Hispanic community in other parts of the country with large concentrations of Hispanic persons. It is clear that Palm Coast has the resources available and is committed to devoting them to Service Area 11. Palm Coast appears poised to achieve a strong share of the new admissions projected by the Agency. Palm Coast's application conforms with Section 408.035(3) and (12), Florida Statutes. Although Palm Coast does not have a licensure history in Florida, its parent corporation, Odyssey, has a history of providing quality hospice care and is a member of the National Hospice and Palliative Care Organization. At the time Palm Coast filed this application, Odyssey had 69 Medicare certified hospice programs in 29 states. Palm Coast, through its management contract with Odyssey, intends to adhere to all of Odyssey's policies and procedures, including policies related to access to care, admissions, and patient/family rights, patient services, infection control, and continuous quality improvement. Section 408.035(5), Florida Statutes, does not apply since the proposed program will not be located in a research or teaching hospital. The establishment of the program, however, will enhance the clinical needs of health professional training programs due to Odyssey's numerous educational affiliations. Palm Coast's application conforms with Section 408.035(6), Florida Statutes. Palm Coast, through its affiliation with Odyssey, will have the tools to effectively recruit and retain the necessary staff for this program. Odyssey has effective recruitment and retention policies that have allowed it to successfully staff and operate its 69 Medicare-certified hospice programs in 29 states, serving an average of 7,300 patients a day. Odyssey uses all the traditional methods of recruiting staff, such as newsprint and website postings, as well as working with headhunters and providing referral bonuses. The company's transfer policy and internal posting program provides the opportunity for employees to transfer to other Odyssey locations. Odyssey offers competitive pay and benefits, as well as flexible work schedules. It also provides bonuses for its employees who receive certifications from NHPCO. Accordingly, Odyssey and Palm Coast do not anticipate facing recruitment and retention problems since they have faced similar issues in other areas with diverse cultural populations. Palm Coast's application conforms with Section 408.035(9), Florida Statutes, as the project will foster competition and promote quality care and cost effectiveness. Patients are better served when multiple providers exist in a market. Odyssey has operated in similar sized markets with 20- 30 hospice providers, and has achieved strong average lengths of stay, quality of care, and financial performance. A new hospice in the service area does not provide price competition because the rates are primarily fixed by Medicare and Medicaid. The addition of new programs, therefore, allows the providers to compete based upon the types and quality of services they provide. This "non-price" competition raises the bar on the services provided by programs in the service area. A new competitor organization offers physicians and patients a choice. This is especially true for hospice, because hospice utilization is strongly related to awareness and education. Competition creates an environment in which hospices must do more to educate the community. New disease process protocols, admissions within three hours of initial contact, and other benefits will occur when a new competitor enters the market. New incremental patients will utilize the service because of increased awareness in the benefits of hospice. Palm Coast's application conforms with Section 408.035(11), Florida Statutes. Although Palm Coast does not have a licensure history in Florida, its parent corporation, Odyssey, has a history of providing care to all patients without regard to gender, origin, race, creed, sexual orientation, disability, age, place of residence, or ability to pay. Odyssey's policies and procedures, which will be the basis for Palm Coast's policies and procedures, confirm this. IMPACT ON EXISTING PROVIDERS VITAS suggests that the establishment of a new hospice program in Service Area 11 would have an impact on existing providers of hospice services. If Palm Coast's utilization projections are to be believed, opines VITAS, existing providers will experience a substantial adverse impact. The nature of the impact to VITAS, it argues, will be twofold. First, VITAS will experience even greater problems in the recruitment and retention of professional staff than it currently experiences. VITAS currently has difficulty in recruiting a sufficient number of nurses who are both bilingual and willing to work in hospice care. Further, VITAS has lost staff in the past when Odyssey has entered a market where they are providing services. In such cases, VITAS has lost staff to Odyssey, which has had a negative impact on VITAS, because it had paid to recruit and train these employees. VITAS further claims that it will lose market share if Palm Coast's projections of patient days in its pro formas are accurate. VITAS bases its loss of market share on an allocation of 72 percent of Palm Coast's projected patient days coming directly from VITAS. This would equate to a loss of $1.5 million (on revenues of $18,851,604). VITAS' analysis does not take into account the underserved market of 2,093 patients identified by the Agency in its unchallenged fixed need pool methodology. This does not even take into account VITAS' own expert's acknowledgment that at least 425 patients remain underserved based on her calculation of need. VITAS claims that it will be substantially and adversely affected by the addition of the Palm Coast program in terms of both lost revenues and inability to recruit and retain staff, yet VITAS has experienced large growth during the past four years and projects a "rosy" future as described by the Miami program's General Manager and by VITAS' parent company Chemed. None of the five other hospice providers in Service Area 11 intervened in the proceeding, appeared at hearing, or offered evidence of any adverse impact the approval of Palm Coast as a new provider might have on them. VITAS was unable to provide much evidence, other than the fact that some of these providers have experienced low utilization, to demonstrate any adverse impact by the entry of Palm Coast into the Service Area 11 market. HOSPICE MUST BE NOT-FOR-PROFIT CORPORATION Odyssey is a for-profit company, publicly traded on the NASDAQ. Palm Coast is a wholly-owned subsidiary of Odyssey. Palm Coast is registered as a corporation not-for- profit pursuant to Chapter 617, Florida Statutes. Under generally accepted accounting principles ("GAAP"), which apply to health care companies as well as other companies, the income of a wholly-owned subsidiary is reflected as the income of the parent. Here, the income of Palm Coast is the income of Odyssey, according to GAAP.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Hospice of the Palm Coast, Inc., for CON No. 9798, be APPROVED. DONE AND ENTERED this 14th day of June, 2005, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 2005. COPIES FURNISHED: Kenneth W. Gieseking, Esquire Agency for Health Care Administration Fort Knox Building, Mail Station 3 2727 Mahan Drive Tallahassee, Florida 32308 Geoffrey D. Smith, Esquire Blank, Meenan & Smith, P.A. 204 South Monroe Street Tallahassee, Florida 32302-3068 Thomas E. Panza, Esquire Deborah S. Platz, Esquire Panza, Maurer & Maynard, P.A. Bank of America Building, 3rd Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308-6225 Richard Shoop, Agency Clerk Agency for Health Care Administration Fort Knox Building, Mail Station 3 2727 Mahan Drive Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration Fort Knox Building, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308 Alan Levine, Secretary Agency for Health Care Administration Fort Knox Building, Suite 3116 2727 Mahan Drive Tallahassee, Florida 32308
The Issue Whether Respondent failed to protect one of the residents of its facility from sexual coercion. Whether Respondent failed to report the alleged violation immediately to the administrator.
Findings Of Fact Petitioner is the state agency charged with licensing and regulating nursing homes in Florida, under state and federal statutes. Respondent is a licensed nursing facility located in Orlando, Florida. Respondent is a small not-for-profit facility, overseen by a voluntary board of directors. Resident 2 is a Hispanic male, 57 years of age, who speaks English and Spanish fluently. He was a self-admitted resident at Respondent's nursing home facility during the relevant time period. Respondent is a small, not-for-profit facility, overseen by a voluntary board of directors. Respondent receives its funds to operate through various types of sources such as United Way, City of Orlando, Orange County, and many foundations. At all times material hereto, Petitioner is the state agency charged with licensing of nursing homes in Florida and the assignment of a licensure status. The statute charges Petitioner with evaluating nursing home facilities to determine their degree of compliance with established rules as a basis for making the required licensure assignment. Additionally, Petitioner is responsible for conducting federally mandated surveys of those long-term care facilities receiving Medicare and Medicaid funds for compliance with federal statutory and rule requirements. These federal requirements are made applicable to Florida nursing home facilities. Pursuant to 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." The evaluation, or survey, of a facility includes a resident review and, depending upon the circumstances, may consist of record reviews, resident observations, and interviews with family and facility staff. Surveyors note their findings on a standard prescribed Center for Medicare and Medicaid Services Form 2567, titled "Statement Deficiencies and Plan of Correction" and is commonly referred to as a "2567" form. During the survey of a facility, if violations of regulations are found, the violations are noted and referred to as "Tags." A "Tag" identifies the applicable regulatory standard that the surveyors believe has been violated, provides a summary of the violation, sets forth specific factual allegations that they believe support the violation and indicates the federal scope and severity of the noncompliance. Agency surveyors use the "State Operations' Manual," a document prepared by the U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services, as guidance in determining whether a facility has violated 42 Code of Federal Regulations (C.F.R.), Chapter 483. In March 2003, Petitioner conducted a survey to investigate a complaint that Respondent failed to protect a resident from sexual coercion. The allegation of the deficient practice was based upon an incident involving Resident 2. Pursuant to 42 C.F.R. Section 483.13(b), a nursing facility must assure that a resident has the right to be free from verbal, sexual, and mental abuse. Failure to do so constitutes a deficiency under Florida Statutes. At hearing, Petitioner presented the testimony of Jane Woodson, nursing program specialist, employed by Petitioner. Woodson testified that she does state and federal surveys in both state and federal licensure and federal institutions to identify or define any noncompliance. She visited Respondent's facility on or about March 26, 2003, and prepared a 2567 form based on her observations, interviews, and record review. It details the results of her investigation, including her interviews with the director of nursing, the administrator, the social worker, the compliance officer, a licensed practical nurse (LPN), and the assistant director of nursing. She also toured the total facility, observed its residents and also observed Resident 2. Woodson observed that Resident 2 was a well-dressed, alert male, and she spoke to him about the incident on March 15, 2003. Woodson did not have an interpreter present at any time when she interviewed Resident 2, nor did she consider it necessary to do so. At no time did she have any concern that Resident 2 was not mentally competent to understand her when she interviewed him. Woodson was not aware that Resident 2 signed his own financial responsibility forms, patient's rights statement, or that he voluntarily checked himself into the facility. She was not aware that Resident 2 made his own medical decisions in the facility. Following her investigation, Woodson conducted an exit interview with the administrator, the director of nursing, the assistant director of nursing, the social worker, and the compliance offer. Woodson included in her report a document filled out by Sharon Ebanks (Ebanks), registered nurse (RN), but she did not personally interview Ebanks. She also did not interview Marilyn Harrilal, LPN, nor did she interview the employee involved in the incident. She advised the administrator of her finding a Class II deficiency and provided a correction date of April 17, 2003. She also concluded that this was an isolated incident. Ebanks was the weekend charge nurse on March 15, 2003, and was in charge of the facility on that date. Ebanks was working on the north wing when she was called by Mr. Daniels, a LPN working on the south wing. Daniels told Ebanks about the alleged incident between Resident 2 and the staff person. Ebanks then called Resident 2; the employee, Marcia Dorsey (Dorsey); and the certified nursing assistants (CNAs), Ms. Polysaint and Ms. Mezier (first names not in the record), who had witnessed the incident, to the green room. She also asked Harrilal to act as a witness to her interviews with the individuals involved. Ebanks first spoke to Resident 2 and Dorsey, both of whom stated that nothing had happened. She then questioned the two CNAs about what they had witnessed. Ebanks concluded, after interviewing both the participants and the witnesses, that the incident was not abuse, but rather, was inappropriate behavior on the part of both Resident 2 and the employee. She based this conclusion on the fact that Dorsey is a trainable Dows Syndrome individual, who was supposed to be working when the incident occurred. Ebanks concluded that Resident 2 had not been abused or hurt in any manner and had participated voluntarily. Ebanks noted that Resident 2 makes his own medical decisions, is considered to be mentally competent, has never been adjudicated mentally incompetent and has not had a legal guardian appointed for him. Ebanks concluded that Resident 2 had not been abused. Ebanks testified that she completed a Resident Abuse Report on March 20, 2003, concerning the incident, after being asked to do so by Respondent's compliance officer. The resident abuse report was admitted into evidence as Respondent's Exhibit 1. At the time of the initial investigation of the incident, Ebanks asked Harrilal to accompany her to the green room. While there, Harrilal listened as Ebanks first questioned Resident 2 and then Dorsey. Both stated that nothing happened. Harrilal then witnessed Ebanks question the CNAs, Polysaint and Mezier. Woodson did not interview Harrilal during her investigation. Ann Campbell, RN, a nurse for more than 38 years, was functioning in the role of assistant director of nursing on March 15, 2003. She was not in the facility on that day and was not made aware of the incident on the date of its occurrence, but became aware when she returned to work. Campbell is familiar with Resident 2. He was initially admitted with a diagnosis of alcohol abuse and dementia. She observed that he was a little confused and forgetful when first admitted, but has since became more alert and responsive. Michael Annichiarico, administrator of the facility and custodian of records, including medical records and personnel files, reviewed the personnel file of the employee, Dorsey. There were no disciplinary actions or counseling prior to the incident of March 15, 2003. Annichiarico is familiar with Resident 2 and has interacted with him. Annichiarico testified that, according to the resident's medical record, Resident 2 has never been declared mentally incompetent and that he makes his own medical and financial decisions. The Progress Note of Gideon Lewis, M.D., dated October 9, 2003, with transcription, was admitted into evidence as Respondent's Exhibit 2 and indicates that Resident 2 is mentally competent and is responsible for his actions as his cognitive functions are intact. Patricia Collins, RN, testified as an expert in the areas of nursing, long-term care, nursing home rules and regulations, and survey procedures. Collins is a RN, currently working in consulting work. She reviewed documents related to the incident. She went to the facility on two different occasions and interviewed the staff. She also reviewed the documents contained in the report of Woodson's survey. Collins interviewed the two CNAs, Ebanks, Resident 2, the medical records custodian, the director of nursing, the social worker, and Harrilal. She spent approximately four to five hours in the facility. After speaking with Resident 2, Collins concluded that he was cognitively intact and very alert. He appeared to be mentally competent. Before interviewing Resident 2, Collins reviewed his resident chart and the documents used to sign himself into the facility. She also reviewed physician's orders for medication, progress notes, nurses' notes, the MDS and the care plan. Collins testified that she reviewed the resident's financial responsibility statement and patient's rights statement, both of which were signed by the resident himself. The resident had no legal guardian. Collins concluded that during the incident of March 15, 2003, there was some inappropriate behavior that needed to be addressed and that this behavior was properly addressed by staff. The inappropriate behavior was the observation of hugging and kissing between Dorsey and Resident 2 in an empty resident's room while the employee was on duty. Collins was of the opinion that the behavior was mutual and not abuse. Collins found no reason to conclude that any harm had been done to Resident 2. Collins testified that a nursing home resident has the right to associate with whomever he desires. He also has the right to have voluntary and willing sexual contact with other people. The inappropriateness in this incident was due to the fact that Resident 2 had involvement with someone with mental deficits. The incident was inappropriate on the part of the employee as well, since she was participating in it during her working time. Collins disagrees with the findings of Petitioner's surveyor. Collins testified that the investigator should have determined the abuse allegation was unfounded. According to Collins' expert testimony, the facility staff acted appropriately. The CNA who initially observed the activity called another CNA as a witness. They then went to their supervisor, who then went to the ranking nurse at the facility at that point in time, which was Ebanks. Ebanks questioned the employee, Resident 2 and the witnesses. She had the presence of mind to have a witness there as well, which was Harrilal. Ebanks made the determination, based on her nursing judgment and in her authority as nurse in charge of the facility on that day, that there was inappropriate behavior on behalf of Resident 2 and the employee. She put a care plan in place as to Resident 2, separated the employee and Resident 2, and sent the CNAs back to work. Collins testified there was no need to report the incident to the Department of Children and Family Services because there was no evidence of abuse or harm to Resident 2. Collins' testimony is found to be credible. Based on all the evidence, it is found and determined that an incident occurred at Respondent's facility on Saturday, March 15, 2003, at approximately 11:00 a.m., involving Resident 2 and a staff employee of Respondent, Dorsey. Resident 2 and the employee were seen by staff employees sitting on a bed hugging and kissing each other in a resident's room that was not being used at the time. Two CNA employees witnessed and reported the incident to the charge nurse. Ebanks was the charge nurse on duty on March 15, 2003. Ebanks was advised of the incident shortly after it occurred and interviewed both Resident 2 and the employees involved, as well as the employees who witnessed the incident. The interviews were conducted in the presence of Harrilal. She completed a Resident Abuse Report on March 20, 2003, at the request of the risk manager within four business days of the incident, and the administrator was advised of the incident on the first business day after the incident. Resident 2 was alert and oriented on the date of the incident. Although he had a low level of dementia, he was mentally competent at the time of the incident. He does not meet the definition of an "elderly person" or "vulnerable adult" under Chapter 415, Florida Statutes.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order of dismissal of the Administrative Complaint be entered in this case. DONE AND ENTERED this 28th day of January, 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 28th day of January, 2004. COPIES FURNISHED: George F. Indest, III, Esquire The Health Law Firm Center Pointe Two 220 East Central Parkway, Suite 2030 Altamonte Springs, Florida 32701 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 Station 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308
