Category Archives: AHCA

Outpatient Prospective Payment Systems

The Agency for Health Care Administration (AHCA) hosted a public meeting on September 17, 2015, to discuss the development of an Outpatient Prospective Payment System (OPPS) to replace the current “cost-based per visit” rate methodology. The stated goal of this payment method conversion is to help control healthcare spending increases while continuing to maintain access to services for Florida’s Medicaid populations.

To assist with this development, AHCA contracted with private consulting company Navigant Healthcare which has offered options between two popular OPPS models that have been adopted by other states. Once a preliminary decision is made on a model, Navigant and AHCA will send its recommendations to the Legislature before the next session.

Currently, Navigant and AHCA are leaning towards adopting an Enhanced Ambulatory Patient Grouping System (EAPG), which involves bundling procedures and medical visits that share similar characteristics and pays one base rate to the provider to cover all of the bundled services. The rates, which have yet to be formulated, will be based on a review of average historical data measured from diagnosis codes and claims paid to outpatient providers from fiscal year 2013-14.

The other OPPS model being considered is the Ambulatory Payment Classification (APC) model. According to Navigant, the APC model provides less bundling for procedures and ancillary services (and, subsequently, more “a la carte” payments) than the EAPG model. The APC model excludes many services – including laboratory, pathology, physical therapy and DMEs – which must be paid under other fee schedules. EAPGs require proprietary grouper software (from Navigant?) and will be less familiar to providers compared to the APC model, which is linked to Medicare’s payment system.

Two more public meetings will be scheduled before AHCA submits recommendations for an OPPS to the Florida Legislature on November 30, 2015. Legislation regarding a new payment system is expected to be passed during the 2016 Session, and then implemented on July 1, 2016.

For more information about AHCA’s development of the OPPS, please contact an attorney at Smith & Associates.

AHCA Preliminary Decisions on Skilled Nursing Facilities

View PDF Version here.

AHCA has issued its State Agency Action Reports announcing the preliminary results on CON Applications submitted for Skilled Nursing Facilities. Below is a summary of the winners and losers listed by Sub-district. For a summary of the process for challenging AHCA’s preliminary decisions, please see our prior Newsletter Article attached.

Sub-district 1-1

Approved Application:

NF Bay, LLC/NF Bay, LLC Establish a new 90-bed community nursing home

Denied Application:

PruittHealth – Escambia County, LLC/PruittHealth – Escambia County, LLC Establish a new 90-bed community nursing home

Sub-district 3-1

Approved Application:

SF Brevard, LLC/SF Brevard, LLC Establish a new 113- bed community nursing home

Withdrawn Application:

Terrace Enterprises, LLC/Terrace Enterprises, LLC Establish a new community nursing home of up to 120 beds

Sub-district 3-2

Approved Applications:

Oak Hammock at the University of Florida, Inc./Oak Hammock at the University of Florida Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds
Palm Garden of Gainesville, LLC/Palm Garden of Gainesville, LLC Add 30 community nursing home beds

Withdrawn Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 47-bed community nursing home

Sub-district 3-3

Approved Application:

Crestwood Nursing Center, Inc./Crestwood Nursing Center Add 29 community nursing home beds

Sub-district 4-1

No Approved Applications

Denied Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 14-bed community nursing home

Sub-district 7-2

Approved Applications:

Presbyterian Retirement Communities, Inc./Westminster Towers Add 30 community nursing home beds through the conversion of 30 sheltered nursing home beds
Presbyterian Retirement Communities, Inc./Westminster Winter Park Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds

Denied Applications:

MF Orange, LLC/MF Orange, LLC Establish a new 90-bed community nursing home
Orange SNF, LLC/Orange SNF, LLC Establish a new 118-bed community nursing home

Sub-district 7-4

Approved Application:

Lifespace Communities, Inc./Village on the Green Add 30 community nursing home beds through the conversion of 30 sheltered nursing home beds

Withdrawn Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 33-bed community nursing home

Sub-district 8-2

Denied Application:

Pelican Bay Retirement Services/Premier Place at the Glenview Add 14 community nursing home beds through the conversion of 14 sheltered nursing home beds

Sub-district 9-1

Approved Application:

Palm Garden of Vero Beach, LLC/Palm Garden of Vero Beach, LLC Add nine community nursing home beds

Sub-district 11-1

Approved Application:

Florida Medical Systems, LLC/Florida Medical Systems, LLC Add 45 community nursing home beds

Denied Application:

Palm Garden of Aventura, LLC/Palm Garden of Aventura, LLC Add 45 community nursing home beds

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

View PDF Version here.

New ALF Rules May Be Coming Soon

View PDF Version here.

The Department of Elder Affairs is holding a public workshop to consider new regulations that may have a significant impact on Florida assisted living facilities (“ALFs”). Significant changes being discussed at the workshop include changes to record keeping requirements, staff competency and training requirements, medication practices, and patient safety and quality of care processes. The first workshop on the proposed rules is scheduled for July 13, 2015 from 9:30 a.m. to 11:30 a.m., at the Department of Elder Affairs, 4040 Esplanade Way, Tallahassee, FL 32399. There is currently no draft proposed rule.

The Rulemaking Process

Rulemaking is required and governed by the Florida Administrative Procedure Act, which provides: “rulemaking is not a matter of agency discretion.” A grant of rulemaking authority is necessary, but not sufficient to allow an agency to adopt a rule. Rulemaking also requires a specific law to be implemented. An agency may only adopt rules that implement or interpret the specific powers and duties granted by the enabling statute. An invalid exercise of delegated legislative authority is an action that goes beyond the powers, functions, and duties delegated by the Legislature.

Agencies’ rulemaking authority is also invalid if it fails to adhere to strict procedural requirements. For example, not less than 28 days prior to the intended adoption, amendment, or repeal of any rule (other than an emergency rule) an agency must give notice of its intended action, including an explanation of the purpose and effect of the proposed action, the full text of the proposed rule or amendment, and a summary of the proposed rule or amendment. The notice must include an estimate of the regulatory cost of implementation.

Where there is a likely impact on small businesses, the agency must consider each of the following methods for reducing the impact: (1) establishing less stringent compliance or reporting requirements in the rule; (2) establishing less stringent schedules or deadlines in the rule for compliance or reporting requirements; (3) consolidating or simplifying the rule’s compliance or reporting requirements; (4) establishing performance standards or best management practices to replace design or operational standards in the rule; and (5) exempting small businesses, small counties, or small cities from any or all requirements of the rule.

Within 21 days of the publication of the notice, any affected person may request a public hearing. When an agency receives such a request it must hold at least one public hearing. In many instances the agency will hold multiple public hearings and may allow written comments to be submitted at or after the public hearing. Substantially affected persons also have the right to challenge a proposed rule under Florida Statute §120.56 as an invalid exercise of delegated legislative authority and have the right to a formal hearing before the Division of Administrative Hearings (“DOAH”). The timing of filing a challenge to a proposed rule varies based upon several criteria, the most common being dependent upon whether a hearing was requested or whether there are amendments to the proposed rule that require it to be republished. In most instances, challenges to proposed rules should either be filed within the same 21 day period or within 10 days after the public hearing is held.

To initiate a formal challenge, a substantially affected person must file a petition at DOAH. Within 10 days after receiving the petition, the matter must be assigned to an administrative law judge who shall conduct a hearing within 30 days and render a final decision within 30 days from the end of the hearing, unless these time frames are extended by agreement of the parties or for good cause, which is routine.

These hearings are de novo, meaning the agency has no presumption of correctness in its proposed rule. The standard of proof is a preponderance of the evidence. Hearings are conducted in the same manner as other 120.569 and 120.57, hearings, with one important exception, the administrative law judge’s order shall be a final agency action instead of a recommendation to be considered by the agency in a final order. The petitioner and the agency whose rule is challenged shall be adverse parties and other substantially affected persons may join the proceedings as intervenors in support of or against the proposed rule. There are opportunities to challenge a proposed rule after it becomes final, but the burden of proof becomes more difficult to challenge an existing rule than a proposed rule.

Be a Part of the Process

Rulemaking is the opportunity for facilities that will be affected by the regulatory changes to protect their interests and have input into the rules that will be implemented. Providers know better than the agencies that regulate them the true impacts of the proposed regulation. FALA and other associations are an important part of the process, but they may not know and understand the unique issues your facility faces with regard to proposed regulatory changes. The best regulations are fully vetted through multiple workshops, where stakeholders from diverse backgrounds and facility sizes participate.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

View PDF Version here.

Defending Alleged Survey Deficiencies at Assisted Living Facilities (ALFs) and Skilled Nursing Facilities (SNFs)

View PDF Version here.

You have probably seen the full page newspaper advertisements by certain law firms trying to solicit Plaintiffs to sue your ALF or nursing home, and placing your recent Survey Deficiencies in big bold print for all the world to see.   These tactics highlight the importance of knowing your rights as an ALF or SNF operator.  Whether to challenge a statement of deficiencies or an Administrative Complaint by the Agency for Health Care Administration is an important decision with far reaching consequences.  You should know your rights and make an informed decision.

Inspections and Survey Deficiencies: Know Your Rights

Assisted Living Facilities (“ALFs”) (governed by Chapter 429, Part I, Florida Statutes, in addition to Chapter 408, Florida Statutes) and Skilled Nursing Facilities (“SNFs”) (governed by Chapter 400, Part II, Florida Statutes, in addition to Chapter 408, Florida Statutes) need to be aware of their legal rights and responsibilities regarding Agency for Health Care Administration (AHCA or Agency) inspections, surveys, and enforcement actions.

With regard to inspections, pursuant to Florida Statutes, AHCA may conduct unannounced inspections of ALFs and SNFs1. If faced with an inspection, an ALF/SNF operator has no legal right to refuse to allow the inspectors access to the facility2.  During the inspection, AHCA is entitled to have access to copies of all provider records required during the inspection3.  An ALF/SNF operator may request that an Administrator  or  other  designated  representative  accompany  the  inspectors  while  at  the facility.  It is advisable that the ALF/SNF operator immediately consult with legal counsel if an unannounced AHCA inspection is made.  During an exit interview, the AHCA representatives should explain their findings, including any alleged deficiencies that were found.

Subsequent to an inspection, AHCA will provide the ALF/SNF Administrator with a survey report that provides a detailed written explanation of the findings made during an inspection. If a violation of a regulation is found during an inspection or investigation, it is cited as a deficiency on the Statement of Deficiencies.  Any deficiency must be corrected within 30 calendar days after the provider is notified of inspection results unless an alternative timeframe is approved by the agency4. The ALF/SNF will be given 10 calendar days in which to present a Plan of Correction5.  ALFs/SNFs must maintain for a three-year period, and make available upon request, records of all inspection reports pertaining to that provider that have been filed by the agency unless such reports are exempt from public disclosure6.

Although seldom asserted, an ALF/SNF operator may assert a legal right to challenge a survey report and petition for a formal administrative hearing pursuant to Section 120.569 and 120.57(1), Florida Statutes, if the provider believes that there were in fact no deficiencies that should result in a Plan of Correction being submitted.  However, in most instances, the results of a licensure or complaint survey can be resolved through submission and implementation of a Plan of Correction.

Statutory Framework Regarding AHCA’s Issuance of Deficiencies

Emergency License Suspension Orders

In the event of alleged severe deficiencies which AHCA claims threaten the health, safety or welfare of an ALF/SNF resident, AHCA can impose an immediate moratorium on admissions or an emergency order of license suspension7.   However, the right to take such emergency action is limited, and  such orders can be challenged legally.  AHCA is required by Section 120.60(6), Florida Statutes, to make specific findings that document the existence of the emergency situation, and may take only such action as is required to address the emergency. An improper Emergency Suspension Order or Moratorium may be immediately appealed to the District Court of Appeal, and there are numerous decisions where Agency action that is not based on a true emergency is reversed and set aside.

Further, AHCA must also provide an ALF/SNF operator faced with an emergency moratorium, or suspension order, or any other effort to suspend or revoke a license with the opportunity to file a Petition for Formal Administrative Hearings to challenge the validity of AHCA’s action or proposed action on the license8.  Hearings on license proceedings are held before an independent administrative law judge at the Division of Administrative Hearings.  Such hearings are an opportunity to prove that the true facts do not support a moratorium, suspension or revocation of the ALF/SNF license.

In addition to or in lieu of taking direct action against an ALF/SNF operator’s license, AHCA may also seek imposition of civil penalties for alleged violation of licensure rules and standards.

Administrative Fines and Classification of Deficiencies

AHCA imposes administrative fines for violations according to a classification system in statute, based on the nature of the violation and the gravity of its probable effect on facility residents.  The agency shall indicate the classification on the written notice of the violation9.   In addition, the scope of the violation may be cited as an isolated deficiency (affecting a very limited number of clients), a patterned deficiency (repeated violations affecting more than a limited number of clients), or a widespread deficiency (pervasive or systemic failures that have the potential to affect a large portion of clients)10.

Assisted Living Facilities (ALFs) and Chapter 429, Florida Statutes

Pursuant to sections 408.813 (AHCA’s “Core Licensure Act”) and 429.19, Florida Statutes (which governs the operations of an ALF), the “classifications” assigned to the alleged violation and the attendant administrative fines are as follows:

Class I violations: present an imminent danger to clients or a substantial probability that death or serious physical or emotional harm would result.  These violations must be corrected within 24 hours.  Imposition of a fine is mandatory in an amount not less than $5,000 and not exceeding $10,000 per violation, even if the violation is corrected11.

Class II violations:  directly threaten the physical or emotional health, safety or security of clients (other than Class I).  Imposition of a fine is mandatory in an amount not less than $1,000 and not exceeding $5,000 per violation, even if the violation is corrected12.

Class III violations: indirectly or potentially threaten the physical or emotional health, safety or security of clients (other than Class I or Class II).   AHCA shall impose a fine in an amount not less than $500 and not exceeding $1,000 per violation, unless the violation is corrected within the time specified for correction in the citation13. [Note: ALF statute (Ch. 429) provides that fines are mandatory for Class III and Class IV violations, but the core licensure statute (Ch.  408) says that the fine will not be imposed if corrected within a specified time, see discussion below.]

Class IV violations:  pertain to reports, forms or documents that do not have the potential of negatively affecting clients (purely paperwork type violations).  These violations are those that AHCA has determined do not threaten the health, safety, or security of clients.  AHCA shall impose a fine in the amount not less than $100 and not exceeding $200 per violation, unless the violation is corrected within the time specified for correction in the citation14.

Section 408.813, Florida Statutes, expressly provides that no fines shall be imposed for timely corrected Class III and Class IV violations.  However, AHCA has been known to take a contrary view, and the specific fine amounts for violation of ALF licensure standards are stated in mandatory language in Chapter 429, Florida Statutes.  Section 408.832, Florida Statutes, provides that when the AHCA Core Licensing Act conflicts with the specific facility governing statutes (such as the ALF statute) then the Core Licensure Act should prevail.  Applying that principle, then no fines should be imposed for minor Class III and IV violations when they are timely corrected by the ALF.  If AHCA were to impose fines for Class III and Class IV violations, the ALF would have appropriate grounds for challenging such fines.

In determining if a penalty is to be imposed and in fixing the amount of the fine, AHCA shall consider the following factors:

  • the severity of the violation and the extent to which the provision of the applicable laws were violated,
  • actions taken by the ALF administrator to correct violations,
  • previous violations,
  • the financial benefit to the facility of committing the violation, and
  • the licensed capacity of the facility15.

Additionally, each day of continuing violation after the date determined by AHCA for termination of the violation, constitutes an additional, separate, and distinct violation16.

Because AHCA considers previous violations when imposing penalties, it is important that ALF Administrators ensure that they quickly address and resolve all minor violations so that these will not later serve as a basis for imposing more severe sanctions.  Additionally, ALF administrators shall document in writing all actions to correct violations and these shall be verified through AHCA follow up visits.  AHCA may impose a fine, and in some instances, revoke or deny a facility’s license when a facility administrator fraudulently misrepresents action taken to correct a violation17.

Additionally, AHCA may impose administrative fines in an amount not to exceed $500 per violation for violations that are not designated as Class I, II, III, or IV violations. Unclassified violations include, but are not limited to: violating a condition of the license, violating statutes or rules, exceeding license capacity, and providing services beyond the scope of the license.

Skilled Nursing Facilities (SNFs) and Chapter 400, Florida Statutes

Skilled Nursing Facilities (SNFs) are governed by Chapter 400, Part II, Florida Statutes, as well as Chapter 408, Part II, Florida Statutes.  In accordance with section 400.23(7), Florida Statutes, AHCA shall, at least every 15 months, evaluate all nursing home facilities and make a determination as to the degree of compliance.  The agency’s determination shall be based on the most recent inspection report, as well as findings from other reports and investigations.  In addition to the license classification categories authorized under part II of chapter 408 (discussed above), AHCA shall assign either a “standard licensure status” or a “conditional licensure status” to each nursing home18. A “standard licensure status” means that a facility has no class I or class II deficiencies and has corrected all class III deficiencies within the time established by the agency.  A “conditional licensure status” means that a facility, due to the presence of one or more class I or class II deficiencies, or class III deficiencies not corrected within the time established by the agency, is not in substantial compliance at the time of the survey19.

The current licensure status of each facility shall be indicated in bold print on the face of the facility’s license, and a list of the deficiencies of the facility shall be posted in a prominent place that is in clear and unobstructed public view at or near the place where residents are being admitted to that facility20.

Licensees receiving a conditional licensure status for a facility shall prepare, within 10 working days after receiving notice of deficiencies, a plan for correction of all deficiencies and shall submit the plan to the agency for approval21.

An operator has the right to challenge a Conditional license rating through the filing of a Petition for Formal Administrative Hearing and a trial before an independent Administrative Law Judge.

Classification and Civil Penalties/Administrative Penalties

The “classification” system and attendant penalties for SNF deficiencies are found in section 400.23(8), Florida Statutes, and outlined below.  The classifications are similar to that of ALFs, though not identical, and the attendant penalties are quite different.  Of note, the SNF statute expressly provides for different levels of fines depending on the whether the deficiency was isolated, patterned, or widespread.  Moreover, for Class I, II, and III deficiencies, section 400.23(8), Florida Statutes, provides that “the fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection.”

Class I deficiency: a deficiency requiring immediate corrective action because the facility’s noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in a facility. A class I deficiency is subject to a civil penalty of $10,000 for an isolated deficiency, $12,500 for a patterned deficiency, and $15,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine must be levied notwithstanding the correction of the deficiency22.

Class II deficiency: 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. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine shall be levied notwithstanding the correction of the deficiency23.

Class III deficiency: a deficiency that the agency determines will result in no more than minimal physical, mental, or psychosocial discomfort to the resident. A class III deficiency is subject to a civil penalty of $1,000 for an isolated deficiency, $2,000 for a patterned deficiency, and $3,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. If a class III deficiency is corrected within the time specified, a civil penalty may not be imposed24.

Class IV deficiency: a deficiency that the agency determines has the potential for causing no more than a minor negative impact on the resident. If the class IV deficiency is isolated, no plan of correction is required25.

In addition to the above, section 400.121, Florida Statutes, provides for the denial, suspension, or revocation of nursing home and related health care facility licenses, and also provides for administrative fines.  In accordance with section 400.121(1), Florida Statutes, AHCA may revoke or suspend a license, or impose administrative fines not to exceed $500 per violation per day.  Section 400.121(2), Florida Statutes, states:

“Except as provided in 400.23(8), a $500 fine shall be imposed for each violation.  Each day a violation of this part or part II of chapter 408 occurs constitutes a separate violation and is subject to a separate fine, but in no event may any fine aggregate more than $5,000.”

This section further provides:

“A fine may be levied pursuant to this section in lieu of and notwithstanding the provisions of s. 400.23.”26

Thus, the statutes governing administrative fines for skilled nursing facilities appear to be inconsistent and afford the agency significant discretion.  On the one hand, it states that “except as provided in 400.23(8), a $500 fine shall be imposed,” but, on the other hand, it also appears to state that the $500 per day fine not to exceed the $5,000 in aggregate may be imposed in lieu of the fines provided for in Section 400.23(8) above.  An experienced health care attorney can help to navigate these somewhat confusing and contradictory statutes, and seek to have them interpreted and applied in a manner most beneficial to the provider.

Revocation and Suspension:  With respect to revoking a SNF license, AHCA may revoke a license where the facility: has had two moratoria issued for substandard care within any 30-month period; is conditionally licensed for 180 continuous days; is cited for two unrelated Class I deficiencies during the same survey; or is cited for two Class I deficiencies arising from separate surveys within a 30-month period.27  If AHCA has placed a moratorium on a facility two times within a 7-year period, AHCA may suspend the nursing home license.  The licensee may present factors in mitigation of revocation, and AHCA may determine not to revoke the license based upon the facility’s mitigating factors.

Any action to suspend or revoke a facility’s license under Chapters 400 or 408 shall be heard by the Division of Administrative Hearings within 60 days after the assignment of an administrative law judge (ALJ), unless the time limitation is waived by both parties, and the ALJ shall render a decision with 30 days after receipt of the proposed recommended order.28  Agency action may be overcome by the licensee upon a showing by a preponderance of evidence to the contrary.29

Challenging a Statement of Deficiencies

Existing case law allows a provider to challenge the issuance of Statement of Deficiencies prior to AHCA filing an Administrative Complaint. See e.g., W. Frank Wells Nursing Home v. Ag. for Health Care Admin., 27 So. 3d 73, 74 (Fla. 1st DCA 2009) (holding that a statement of deficiencies constituted agency action and could be challenged in an administrative hearing).  However, the decision to file a petition to challenge a Statement of Deficiencies has significant implications on the burden of proof at hearing.  AHCA Final Orders have indicated that a party challenging a Statement of Deficiencies has the burden to show that no violations occurred by a preponderance of the evidence. See Water’s Edge Extended Care v. Ag. For Health Care Admin., DOAH 12-2188, 2013 WL 4080436, at *3 (Aug. 2, 2013) (“Here, the Agency issued a document known as a statement of deficiencies. It imposed no penalty on the Petitioner. Nor did it alter Petitioner’s licensure status in any way. Thus, it did not meet the definition of an administrative complaint found in Rule 28-106.2015(1), Florida Administrative Code. Therefore, Petitioner should have born the burden of proof by a preponderance of the evidence.”).  In contrast, if AHCA files an Administrative Complaint, then AHCA has the burden to prove the violation by clear and convincing evidence.30

Because the burden on AHCA to prove the violation is much greater when it brings an Administrative Complaint (as compared to when a facility challenges a Statement of Deficiencies), ALFs/SNFs need to seriously consider the pros and cons of challenging a Statement of Deficiencies.  In most instances, the best course of action is to challenge the Administrative Complaint, rather than challenging the Statement of Deficiencies.  However, the following are circumstances where it may be prudent for a facility to challenge the Statement of Deficiencies:

  • When AHCA is requiring some immediate corrective action that the provider believes is unwarranted under the circumstances and that would be unduly burdensome on the provider;
  • When the facility reasonably believes that the Statement of Deficiencies will result in a negative stigma affecting its business operations if it fails to challenge the alleged deficiency;
  • When the facility reasonably believes that certain payors may take adverse action based on the Statement of Deficiencies being filed and unchallenged.

It should be noted that although administrative case law in certain Final Orders has indicated that the burden on the provider is much greater when it challenges a Statement of Deficiencies, there have been no appellate decisions on this issue to date.

Case Law Examples: Recent Reported Final Orders

ALF Final Order Examples

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION v. ANGEL AIDES CENTER, INC. d/b/a BOYNTON BEACH ASSISTED LIVING FACILITY, 2014 WL 7385342 (December 17, 2014), DOAH NO. 13-1258

Action to revoke the ALF’s license and impose $5,000 fine and $500 survey fee.  Agency cited the facility for two Class II deficiencies as a result of complaint investigation surveys.  Based on the surveys it was determined that the facility failed to ensure that residents met the residency requirements (several residents required medical and psychological supervision exceeding the residency criteria) and failed to provide supervision to the residents.  Specifically, during the investigation it was revealed that one of the residents who did not meet the residency requirement (as he required medical supervision due to antisocial behavior) had sexually assaulted another resident several months prior. Pursuant to section 429.14 (1) (e), Florida Statutes, the Agency sought to revoke the license since it had previously cited the facility for four Class II deficiencies.

Holding/Fine: ALF license was revoked, and respondent was required to pay the Agency $5,500.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. DAYSPRING VILLAGE, INC., 2014 WL 2624256 (June 3, 2014); DOAH CASE NO. 13-1451

Administrative Complaint sought to impose an administrative fine of $2,000 based on two Class II deficiencies discovered during a complaint inspection of Dayspring Village’s assisted living facility (“ALF”), as well as a $185.00 survey fee. Specifically, the complaint alleged that the facility failed to provide adequate and appropriate health care consistent with established and recognized standards within the community by allowing diabetic residents to use the same glucometer without disinfecting or cleaning the glucometer device in between resident usage, and failed to properly supervise residents taking their medication.

Holding: The Final Order concluded that AHCA proved its violations by clear and convincing evidence and imposed an administrative fine of $2,000 and a survey fee of $185.50 on Dayspring Village, Inc.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. PINE TREE MANOR, INC. d/b/a PINE TREE MANOR, Respondent, 2014 WL 554674 (February 5, 2014) DOAH CASE NOS. 13-2011, 13-2397

AHCA charged Pine Tree Manor with two Class I violations and sought to revoke its license for two separate deficiencies.  The first alleged Class I violation concerned the facility’s failure to remain generally aware of one of its residents whereabouts.  Specifically, a resident wandered off from the facility and the facility did not seek to locate him until the next morning.  They were unable to locate him, and he was found, deceased, several days later.  The Final Order held that AHCA had not proved by clear and convincing evidence that the facility was on notice the resident was in “imminent danger of death or serious physical harm” to substantiate a Class I, and held that it was a Class II violation, and imposed a $5,500 fine.  The second alleged violation concerned the facility’s failure to properly respond to an emergency situation where a resident stopped breathing and ultimately died.  The employee failed to immediately call 911 and provide CPR.  The Final Order held this was a Class I violation, revoked respondent’s license, and imposed an $8,000 fine.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. STEPHENS MEMORIAL HOME, INC. d/b/a STEPHENS MEMORIAL HOME, 2013 WL 3490616 (July 8, 2013), DOAH CASE NO. 13-0368

AHCA conducted an unannounced biennial licensure and complaint survey that gave rise to the Administrative Complaint.  The Administrative Complaint alleged a widespread class II deficiency and sought the imposition of an administrative fine of $1,000 against Respondent. Specifically, the Administrative Complaint alleged that Stephens Memorial failed to insure that one of four sampled residents was free of physical restraints in violation of Florida Statutes because that resident had an activity board attached to his wheelchair that appeared to prevent the resident from getting up from his wheelchair.

Holding: The Final Order held that the resident was able to remove the activity board and that it was prescribed for therapeutic purposes and thus did not meet the definition of a “restraint” and the Administrative Complaint was dismissed.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. DOS OF CRYSTAL RIVER ALF, LLC d/b/a CRYSTAL GEM ALF, 2013 WL 595490 (February 7, 2013);  DOAH CASE No. 12-2306

Administrative Complaint alleged a Class III violation for facility’s failure to have a properly completed Residential Health Assessment form for each resident, and Class I violation for failure to provide appropriate supervision to prevent elopement.

Holding: Held that while violations did occur in that the forms were not properly completed, they did not constitute Class III violations because there was no threat to the physical or emotional health of the residents, and thus it was reduced to a Class IV violation with a fine of $100.  With regard to the alleged Class I violation regarding elopement, the Final Order held that the Agency did not prove, by clear and convincing evidence, that the facility violated Florida Statutes with respect to the provision of care and supervision of its residents.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. ALLAN V. COMRIE d/b/a PREMIER ADULT CARE; ALLAN V. COMRIE d/b/a FIRST CLASS PHASE II; and ALLAN V. COMRIE d/b/a FIRST CLASS ADULT FAMILY CARE and JAM, 2012 WL 5705633 (November 8, 2012);  DOAH CASE NO. 12-0102

AHCA alleged that Respondent had advertised and operated a facility without first obtaining licensure for that program, had misrepresented the licensure status of the home, had failed to comply with rules governing facilities, and had failed to cooperate with authorities with regard to the facility. As to all alleged violations, Respondent maintained it was not required to hold a license for the subject property as its operation was exempt as a matter of law. Additionally, Respondent averred that any incorrect advertising was merely a clerical error and not an intentional misrepresentation of the licensure status of the facility.

Holding: Although the Administrative Law Judge did not recommend revocation, AHCA entered a Final Order and imposed a $7,000 fine and revoked Respondent’s license.   The operator elected not to appeal to the District Court of Appeal.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION v. AVALON’S ASSISTED LIVING, LLC d/b/a AVALON’S ASSISTED LIVING and d/b/a AVALON’S ASSISTED LIVING AT AVALON PARK; and AVALON’S ASSISTED LIVING II, LLC, 2011 WL 860551 (March 9, 2011)

Action to revoke the facilities’ licenses due to Class II deficiencies regarding: 1) failure to provide required employee training and falsified training certifications, and 2) the failure to provide residents with appropriate pain medication and required care. The evidence established that the violations posed a direct threat to the physical and emotional health of the residents.  License revocation was an appropriate penalty pursuant to section 429.14(1)(e)(2), Florida Statutes, regarding revocation where there are three or more cited class II deficiencies.

Holding/Fine: The licenses of the facilities were revoked and an administrative fine of $3,000 was imposed.

SNF Final Order Examples

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. TALLAHASSEE FACILITY OPERATIONS. LLC d/b/a CONSULATE HEALTHCARE OF TALLAHASSEE, Respondent, 2015 WL 510385 (February 2, 2015), DOAH CASE NO. 14-0436

Administrative Complaint sought to impose an administrative fine in the amount of $1,000 and conditional licensure status based on one uncorrected Class III deficiency discovered during a revisit survey inspection conducted on August 12, 2013. AHCA conducted a survey of the facility in July 2013 and found a Class III deficiency for failure to follow physician orders that patient be bathed daily.  Respondent submitted a corrective action plan which was approved by AHCA.  AHCA re-surveyed respondent in August 2013, and found additional Class III violations regarding failure to follow physician orders concerning PICC-dressing changes in violation of rule 59A-4.107(5).  AHCA alleged the August violation constituted an uncorrected violation of the earlier failure to follow physician orders.

Respondent argued that the August violation was different than the July violation, and thus the August violation should not be construed as an “uncorrected violation.” AHCA argued that both violations concerned the failure to follow physician orders and thus the second violation was an “uncorrected violation.” AHCA further argued that its acceptance of the corrective action plan did not  absolve Respondent from its responsibility to correct every area in which it was found out of compliance.

Holding: AHCA demonstrated by clear and convincing evidence that Respondent committed an uncorrected Class III deficiency. Final Order imposed a fine of $1,000 and further imposed conditional licensure on Respondent for the period from August 13, 2013 through September 30, 2014.

WATER’S EDGE EXTENDED CARE, Petitioner v. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent, 2013 WL 4080436 (August 02, 2013), DOAH 12-2188

AHCA conducted a complaint survey and issued a statement of deficiencies for alleged violation of section 400.0255, Florida Statutes, regarding transfers or discharges initiated by nursing homes.  The statement of deficiencies was challenged by petitioner and the matter was referred to DOAH.  The ALJ found that section 400.0255, Florida Statutes, was inapplicable to the circumstances, as the physician initiated the Baker Act transfer, not the nursing home.

Holding: The Final Order found that the Agency failed to establish that respondent violated section 400.0255, Florida Statutes, by improperly discharging or transferring the resident, and they Agency withdrew its Statement of Deficiencies.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. GREENBRIAR NH, LLC d/b/a GREENBRIAR REHABILITATION AND NURSING CENTER, Respondent, 2012 WL 2191285 (June 7, 2012) DOAH CASE NO. 11-4379

Administrative Complaint alleged that Respondent failed to comply with background screenings and alleged a Class II deficiency.

Holding: the Respondent failed to comply with the relevant law regarding background screenings as well as its own policies and procedures when it hired new employee. However, the Petitioner failed to prove that these failures constituted a Class II deficiency.  The Final Order dismissed the Administrative Complaint and replaced the Conditional License with a Standard License for the time period in question.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. SA-PG SUN CITY CENTER, LLC d/b/a PALM GARDEN OF SUN CITY, Respondent, 2011 WL 379931 (January 1, 2011), DOAH CASE NO. 10-4740

Administrative Complaint alleged that Respondent failed to follow established and recognized practice standards regarding care to its residents; and failed to comply with the rules governing skilled nursing facilities adopted by AHCA.

Holding: There is no competent and substantial evidence that Respondent failed to follow established practice standards that resulted in harm to its residents and failed to comply with rules governing skilled nursing facilities, or that otherwise warrants a fine or Conditional rating. Respondent was marginally deficient in two minor areas concerning their own policies, but neither violation is a Class II deficiency, nor warrants imposition of a sanction.

Conclusion

Preventative measures are the best way to protect against survey deficiencies.  ALF/SNF administrators should develop and implement trainings and staff education to ensure compliance with Florida Statutes and rules.  Qualified health care consulting firms and health care attorneys can assist with developing compliant materials and compliance programs.  An ounce of prevention in this respect will be well worth avoiding the costs of a bad survey or inspection by AHCA.

However, even with a good education and compliance program in place, AHCA may still seek to suspend or revoke a license, or impose a moratorium on admissions or levy substantial fines.  In order to assess penalties, AHCA is required to file an Administrative Complaint.  ALFs/SNFs have the right to demand a formal hearing to challenge the facts, and to challenge the amount or appropriateness of the fines being imposed.

ALF/SNF administrators in such situations should consult and retain experienced legal counsel to contest and defend against such actions by filing a Petition for Formal Administrative Hearing pursuant to Chapter 120.  The timeframe for responding to an Administrative Complaint is 21 days from receipt of the Complaint, and failure to timely file a petition may result in an admission of the facts alleged in the Complaint and entry of a Final Order by the agency.  ALF/SNF administrators need to be aware of their legal rights prior to receiving an Administrative Complaint and need to be sure to consult with counsel prior to inadvertently waiving any rights.  Hiring experienced legal counsel is crucial in any challenge to an Administrative Complaint.  Experienced counsel can not only help to protect your due process rights, but can also ensure that the State is required to prove its case by clear and convincing evidence.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

View PDF Version here.

1 §408.811 (1), Fla.  Stat., §429.34 (1), Fla.  Stat., §400.19, Fla.  Stat.

2 §408.811 (1), Fla.  Stat.

3 §408.811 (3), Fla.  Stat.

4 §408.811 (4), Fla.  Stat.

5 §408.811 (5), Fla.  Stat.

6 §408.811 (6), Fla.  Stat.

7 §408.814 (1), Fla.  Stat.

8 §120.60 (7), Fla.  Stat.

9 §429.19 (2), Fla.  Stat.

10 §408.813(2), Fla.  Stat.

11 §408.813(2)(a), Fla.  Stat.; §429.19(2)(a), Fla.  Stat.

12 §408.813(2)(b), Fla.  Stat.; §429.19(2)(b), Fla.  Stat.

13 §408.813(2)(c), Fla.  Stat.; §429.19(2)(c), Fla.  Stat.

14 §408.813(2)(d), Fla.  Stat.; §429.19(2)(d), Fla.  Stat.

15 §429.19(3), Fla.  Stat.

16 §429.19(4), Fla.  Stat.

17 §429.19(5), Fla.  Stat.

18 §400.23(7), Fla.  Stat.

19 §400.23(7)(a) and (b), Fla.  Stat.

20 §400.23(7)(d), Fla.  Stat.

21 §400.23(7)(d), Fla.  Stat.

22 §400.23(8), Fla.  Stat.

23 §400.23(8), Fla.  Stat.

24 §400.23(8), Fla.  Stat.

25 §400.23(8), Fla.  Stat.

26 §400.121(2), Fla.  Stat. (emphasis added).

27 §400.121(3), Fla.  Stat.

28 §400.121(5), Fla.  Stat.

29 §400.121(7), Fla.  Stat.

30 The burden of proof on AHCA to impose an administrative fine is by clear and convincing evidence. Dep’t of Banking & Fin, v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996). The burden of proof for the assignment of licensure status is by a preponderance of the evidence. See Florida Dep’t of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Dep’t of HRS, 348 So. 2d 349 (Fla. 1st DCA 1977).  See also AGENCY FOR HEALTH CARE ADMINISTRATION v. TALLAHASSEE FACILITY OPERATIONS. LLC d/b/a CONSULATE HEALTHCARE OF TALLAHASSEE, 2015 WL 510385, at *12 (February 2, 2015), DOAH CASE NO. 14-0436.

 

Update on Return of Nursing Home CON in Florida

View PDF Version here.

The “post moratorium era” continues for the Nursing Home Certificate of Need (“CON”), with twenty-eight Letters of Intent filed in response to published Fixed Need Pools for an additional 493 nursing home beds statewide. Since the lifting of the moratorium on nursing home CON by the Legislature last year, the Agency for Health Care Administration (“AHCA “) has approved a total of 3,198 needed nursing home beds. Under the legislation, AHCA cannot approve any more CONs for nursing home beds equal to or greater than 3,750 (until June 30, 2017). Assuming AHCA awards all of the published need to these applicants, the total approvals by AHCA since the legislation was passed will be 3,691 beds. This would mean that there would only be 59 beds left before the 3,750 statutory cap is reached. Other deadlines are fast approaching, as well. Any provider that wishes to file a competing Grace Period Letter of Intent has until May 6, 2015 to file for a competing proposal.

The following tables show the Fixed Need Pool in each subdistrict where AHCA has received one or more letters of intent. The tables reflect the number of beds published in the Fixed Need Pool and a summary of the Letters of Intent received in each subdistrict to date. Additional notations are made as to any observations regarding the number of beds sought in relation to the fixed need pool.

Subdistrict 1-1
(Escambia and Santa Rosa)
Need: 61

Escambia FL HUD Pensacola/Specialty Health and Rehabilitation Center Add 30 community nursing home beds
Escambia NF Bay, LLC Establish a new 90-bed community nursing home
Escambia PruittHealth – Escambia County, LLC Establish a new community nursing home of up to 120 beds

*Note: Two applicants have filed for a number greater than published need; and one less.

Subdistrict 2-1
(Gadsden, Holmes, Jackson and Washington)
Need: 41
No LOIs received despite published need.


Subdistrict 3-1
(Columbia, Hamilton and Suwannee)
Need: 113

Columbia MF Orange, LLC Establish a new 113-bed community nursing home
Columbia Palm Garden of Lake City, LLC Establish a new community nursing home of up to 113 beds
Columbia PruittHealth – Alachua County, LLC Establish a new community nursing home of up to 113 beds
Columbia Terrace Enterprises, LLC Establish a new community nursing home of up to 113 beds

Subdistrict 3-2
(Alachua, Bradford, Dixie, Gilchrist, Lafeyette, Union, and Levy)
Need: 47

Alachua Innovative Medical Management Solutions, LLC Establish a new 47-bed community nursing home
Alachua Oak Hammock at the University of Florida Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds
Alachua Palm Garden of Gainesville, LLC Add up to 47 community nursing home beds

Subdistrict 3-3
(Putnam)
Need: 34

Putnam Crestwood Nursing Center, Inc. Add up to 34 community nursing home beds
Putnam Lakewood Nursing Center, Inc. Add up to 34 community nursing home beds

Subdistrict 3-4
(Marion)
Need: 0

Marion Ocala SNF, LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 3-5
(Citrus)
Need: 23
Need published but no LOIs filed.


Subdistrict 3-6
(Hernando)
Need: 5
Need published but no LOIs filed.


Subdistrict 4-1
(Nassau and North Duval)
Need: 14

Duval Edgewood Nursing Center, Inc. Add up to 14 community nursing home beds
Duval Innovative Medical Management Solutions, LLC Establish a new 14-bed community nursing home

Subdistrict 4-3
(St. Johns and Southeast Duval)
Need: 0

St. Johns Saint Johns SNF LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 5-1
(Pasco)
Note: 44

Pasco Innovative Medical Management Solutions, LLC Establish a new 44-bed community nursing home
Pasco LP New Port Richey, LLC/Southern Pines Healthcare Center Add 44 community nursing home beds

Subdistrict 6-4
(Highlands)
Need: 11
Need published but no LOIs filed.



Subdistrict 7-2
(Orange)
Need: 0

Orange Orange SNF, LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 7-4
(Seminole)
Need: 33

Seminole Innovative Medical Management Solutions, LLC Establish a new 33-bed community nursing home

Seminole Lifespace Communities, Inc./Village on the Green Add up to 33 community nursing home beds
Seminole Seminole SNF LLC Establish a new community nursing home of up to 120 beds

*One applicant exceeds published need.

Subdistrict 8-2
(Collier)
Need: 0

Collier Pelican Bay Retirement Services/Premier Place at the Glenview Add up to 14 community nursing home beds through the conversion of up to 14 sheltered beds

*Note: No published need, but an LOI was received.

Subdistrict 9-1
(Indian River)
Need: 9

Indian River Palm Garden of Vero Beach, LLC Add up to nine community nursing home beds

Subdistrict 9-2
(Martin)
Need: 9
Need published but no LOIs filed.


Subdistrict 9-3
(Okeechobee)
Need: 4
Need published but no LOIs filed.


Subdistrict 11-1
(Miami Dade)
45

Miami Dade CC-Aventura, Inc./VI at Aventura Add up to 40 community nursing home beds
Miami Dade Florida Medical Systems, LLC/Florida Medical Systems, LLC Add up to 45 community nursing home beds and a partial of 15 beds
Miami Dade Palm Garden of Aventura, LLC/Palm Garden of Aventura, LLC Add up to 45 community nursing home beds
Miami Dade Pediatric Specialty Care of Florida, LLC/Pediatric Specialty Care of Florida, LLC Establish a new community nusing home of up to 45 beds

Total Statewide: 493



Any provider that has been contemplating an opportunity to seek a CON for a new facility or additional beds at an existing facility should review the currently filed Letters of Intent carefully, and decide if now is the time to seek approval for a competing project. Existing providers should also carefully consider their options, and decide whether to oppose a project that may have a negative impact on existing operations. Please feel free to call me for any additional information.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

View PDF Version here.

Update on Return of Nursing Home CON in Florida

View PDF Version Here.

The deadline is looming to challenge AHCA’s preliminary Decisions. March 16, 2015, is the final day for competing CON Applicants to file challenges to AHCA’s State Agency Action Reports (“SAAR”). Existing Providers wanting full party status to challenge preliminary decisions should also file challenges by March 16, 2015. AHCA’s preliminary decisions that are not challenged by March 16, 2015, will become final and the preliminary approved Applicants will be issued CONs.

If a challenge is filed by a substantially affected party demonstrating that there are material disputed issues of fact, the matter will be referred to the Division of Administrative Hearings (“DOAH”) and assigned to an Administrative Law Judge (“ALJ”) for a quasi-judicial proceeding (“Final Hearing”). At the Final Hearing, AHCA’s preliminary decision is not entitled to any deference. The Applicants have the burden of proving the information contained in their CON Applications, and the Florida Evidence Code is applicable, with limited exceptions such as a more lenient rule on admissibility of hearsay evidence. For more information on the DOAH Final Hearing process, see our newsletter published February 11, 2015, posted at: http://smithlawtlh.com/update-on-return-of-nursing-home-con-in-florida/.

DISTRICTS RIPE FOR CHALLENGES

At this point, any area where there is a pending CON approval is an opportunity for a legal challenge. Basis for challenges are unlimited and can include any combination of factors, such as a better fit for the market, technical flaws in a CON Application, under or over filling the gap in need demonstrated by the fixed need publication, etc.

The chart below indicates sub-districts where AHCA’s preliminary approvals were less than the published fixed need determinations, which is one basis to argue a different provider or combination of providers might be a better fit.

Sub-district Deficit/Surplus
1-1 40 Bed Surplus
3-2 60 Bed Surplus
4-4 47 Bed Surplus
5-2 56 Bed Surplus
7-4 78 Bed Surplus
8-5 40 Bed Surplus

WHO CAN CHALLENGE

Existing Providers in the same district or competing CON Applicants in the same sub-district can challenge the preliminary decisions. Once challenged, an approved CON Applicant should challenge the other CON Applicants in their sub-district within 10 days of the Notice of Litigation being filed in the Florida Administrative Register, or they could be left merely defending their approval without being able to raise flaws in competitors’ CON Applications.

UNCERTAIN APPLICANTS AND PROVIDERS SHOULD CHALLENGE

With March 16, 2015, rapidly approaching, many CON Applicants and Existing Providers may not have had the opportunity to fully comprehend the potential implications of AHCA’s preliminary decisions. If you are in this position, it is best to go ahead and file a challenge. A challenge can always be dismissed if you decide not to proceed, but if you miss the opportunity to challenge, you may have missed the only window of opportunity.

In some instances, denied CON Applicants have been able to reach settlements that resulted in their approval in addition to the approval of the preliminarily approved Applicant. In other instances, denied CON Applicants have been able to recoup some of their costs through settlements.

Existing Providers may have enhanced reasons to participate in challenges to avoid settlements that allow multiple approvals of preliminarily denied Applicants in addition to preliminarily approved Applicants. While this potential is always present in CON cases, it seems particularly likely in this batching cycle because there are so many potential sub-districts that may have litigation, several sub-districts have more fixed need for beds than have been preliminarily approved, and the Legislature has predetermined a limited window for the total number of beds that will be approved statewide before the moratorium is reactivated, and this number may be reached before need is triggered in the specific sub-district at issue in the future.

Further, a recent circuit court case provides additional reasons why Existing Providers should stay engaged in the process. In that case, a preliminarily denied CON Applicant challenged its denial. There was no competing CON Applicant. AHCA settled and approved the CON, including giving the CON Applicant several years beyond the time where the CON should have expired to begin construction. Several years later, when the project was about to commence construction, the Existing Provider tried to challenge the CON arguing it should have expired 18 months after it was issued, instead of several years after it was issued. The circuit court held the Existing Provider waived its rights to challenge by not filing a challenge within 21 days, even though the Existing Provider had no reason to assume AHCA would have extended the CON for several years beyond the statutory validity period. This case stands for the position that if an Existing Provider fails to challenge a CON, it could be strapped with far reaching consequences.

CONCLUSION

March 16, 2015, is an important deadline to file challenges to AHCA’s preliminary approvals. Failure to timely file a challenge could waive your rights to any future challenges, even if the litigation ultimately results in settlements that go beyond expectations.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

View PDF Version Here.

Update on Return of Nursing Home CON in Florida

View PDF Version Here.

AHCA announced the preliminary winners and losers in the first nursing home CON batching cycle since the Legislature lifted the moratorium in 2014. The State Agency Action Reports (“SAARs”) released on February 20 had a few surprises, but perhaps the biggest surprise is not contained within the decisions on the 102 completed CON Applications, but instead in the significant number of areas that are still left with unmet need.

While most of the talk surround nursing home CON Applications filed in this batching cycle has been about the large number of CON Applications filed, perhaps the more interesting story is that in 9 sub-districts, where there was a combined published fixed need of 365 beds, no one applied. In 13 other sub-districts, AHCA’s preliminary decisions awarded less beds than the fixed need determination calculated despite having CON Applications that would have met the need, for a combined deficit of 443 beds. For example, in Lee County, sub-district 8-5, there was fixed need for 40 beds, yet AHCA denied the only CON Application filed in that sub-district, leaving the 40 bed fixed need determination unmet.

This article focuses on the fixed need determinations by sub-district and the net surplus or deficit that would be created if AHCA’s preliminary determinations stand. Note, however, that AHCA’s preliminary determinations may be overturned by legal challenges filed before March 16, 2015, so these numbers are subject to and will almost definitely change significantly before all of the legal challenges are completed. For a more detailed discussion on the legal challenge process and timeline, see our newsletter dated February 11, 2015.

SUB-DISTRICTS WITH FIXED NEED WITHOUT A CON APPLICANT

No one applied for a nursing home CON in 9 sub-districts where there was published fixed need in the Second Batching Cycle for Other Beds and Programs 2014. The chart below shows the sub-district, counties, and fixed need that was not applied for by any nursing home provider.

Sub-district Counties Unmet Need
2-1 Gadsden, Holmes, Jackson, and Washington 56
2-3 Calhoun, Franklin, Gulf, Liberty, and Wakulla 14
3-1 Columbia, Hamilton, and Suwannee 99
3-3 Putnam 43
5-1 Pasco 67
6-4 Highlands 25
9-1 Indian River 18
9-2 Martin 37
9-3 Okeechobee 6

While it is too late for anyone to apply for a CON in these sub-districts in this batching cycle, it is extremely likely that similar fixed need will be published for these sub-districts in the next batching cycle on April 3, 2015.

SUB-DISTRICTS WHERE NEED IS GREATER THAN AHCA AWARDS

In 13 sub-districts, AHCA preliminarily awarded CONs for less beds than the current projected need. The chart below provides the sub-district, counties, and deficit between the fixed need calculations and preliminary awards.

Sub-district Counties Unmet Need
1-1 Escambia and Santa Rosa 40
3-2 Alachua, Bradford, Dixie, Gilchrist, Lafayette, Levy and Union 60
3-5 Citrus 43
3-6 Hernando 16
3-7 Lake and Sumter 25
4-3 St. Johns and south-eastern Duval 47
5-2 Pinellas 56
7-2 Orange 18
7-3 Osceola 10
7-4 Seminole 78
8-1 Charlotte 3
8-2 Collier 7
8-5 Lee 40

Any Applicant that filed a CON in the current batching cycle has the right to challenge their denial or the approval of another CON in the same sub-district prior to March 16, 2015.

SUB-DISTRICTS WHERE AHCA AWARDS EXCEEDED FIXED NEED

There were 4 sub-districts where AHCA awarded more beds than the fixed need publications showed were needed. The chart below shows the sub-district, counties, and surplus of beds over the published fixed need.

Sub-district Counties Surplus Beds
2-2 Bay 14
3-4 Marion 12
4-2 Baker, Clay, and southwestern Duval 47
6-5 Polk 51

Any Applicant that filed a CON in the current batching cycle has the right to challenge their denial or the approval of another CON Application filed in the same sub-district prior to March 16, 2015.

RIGHTS OF EXISTING PROVIDERS

Existing providers in the same district that will be substantially affected by the approval of a competing proposed facility or program can initiate or intervene in a challenge pursuant to Fla. Stat. §408.039(5)(c) (2014). Thus, by way of example, an existing provider in sub-district 6-3 can challenge a preliminary approval of a proposed provider in sub-district 6-5 because they are both in district 6. This is different from competing Applicants that must be filing in the same sub-district to prove standing. Existing providers may also intervene in legal proceedings challenging preliminary approvals after March 16, 2015, however, they do so subject to the standing of the other parties to the proceeding, as discussed in our prior newsletter on February 11, 2015. Thus, existing providers that wait until after March 16, 2015, do so at the risk that no one else challenges the preliminary approval.

AREAS RIPE FOR CHALLENGES

At this point, any area where there is a pending CON approval is an opportunity for a legal challenge. Basis for challenges are unlimited and can include any combination of factors, such as a better fit for the market, technical flaws in an application, under or over filling the gap in need demonstrated by the fixed need publication, etc. There are literally countless basis for challenging a preliminary CON approval. Notably, final hearings are de novo proceedings, meaning AHCA’s preliminary decision is not given any weight or presumption of correctness.

Without a full detailed review of all of the competing Applications within a sub-district, it’s difficult to make any specific conclusions about where successful opportunities for challenges could be found. That said, there are some sub-districts that seem to stand out in a macro-analysis shown in the chart below.

Sub-district Deficit/Surplus Reason
1-1 40 Bed Surplus Other Applicant met the published need
3-2 60 Bed Surplus Other Applicants met the published need
4-4 47 Bed Surplus Other Applicants met the published need
5-2 56 Bed Surplus Denied 56 bed Applicant
7-4 78 Bed Surplus Other Applicants met the published need
8-5 40 Bed Surplus Denied 31 bed Applicant

If these preliminary approvals are not challenged, they become final approvals and CONs will be awarded in these sub-districts.

Thus, if you are uncertain about whether you want to challenge a denial or someone else’s approval, it’s best to go ahead and file a challenge. A challenge can always be dismissed if you decide not to proceed, but if you miss the opportunity to challenge, then you may have missed the window of opportunity. That said, we have conservatively used March 16, 2015, as the deadline to file challenges throughout this article. However, there are certain facts and subsequent notice that have occurred in this batching cycle that might extend the period of time to file such challenges. Thus, if you have not decided to file a challenge until after March 16, 2015, and are just now reading this article and thinking you are too late, please contact us to discuss whether there may be additional ways to challenge a preliminary denial or approval.

CONCLUSION

February 20, 2015, held a few surprises for the bountiful field of CON Applicants, particularly that there is still a significant amount of unmet need where either no one applied for a CON or where AHCA did not award the beds to the full amount projected by the need formula. It will be interesting to see on April 3, 2015, whether AHCA again publishes similar need for these unclaimed areas, and if so, whether any CON Applicants will jump into the arena to compete for these unclaimed areas. There are also many areas of the State that are potentially subject to legal challenges to AHCA’s preliminary approvals. It will be interesting to see how many of AHCA’s preliminary decisions ultimately remain after these legal challenges are completed.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

View PDF Version Here.

Smith & Associates Lobby for ALF Changes

Watch Smith & Associates’ attorneys Geoff Smith and Susan Smith lobby the Florida Legislature for changes in the Nursing Home CON laws here. (Smith & Associates start at the 1:39 mark).

Currently, the CON rules, as they are applied to Nursing Homes, allow for one nursing home to obtain and hold a monopoly in a district. This leads to fewer options for nursing home patients. Smith & Associates is lobbying the Florida Legislature to change this law to protect nursing home patients.

Update on Return of Nursing Home CON in Florida

View PDF Version Here.

AHCA will be releasing its State Agency Action Reports (“SAARs”) on February 20, 2015, announcing the preliminary decisions for approvals and denials of the 104 CON Applications filed in the first batching cycle since the Legislature lifted the moratorium on new nursing homes in Florida. But what happens next? What do you do if you don’t agree with AHCA’s preliminary decisions? Who has standing to challenge the decision if your CON has been preliminarily approved? This article will provide a basic overview of Fla. Stat. §120.569 and §120.57 (2014), including the timing of challenges, the basic laws regarding standing to bring a challenge, and an overview of the administrative process should you wish to file a challenge or find yourself defending against a challenge.

NOTIFICATION OF DECISIONS

AHCA notifies CON Applicants of its preliminary decisions by releasing SAARs for each subdistrict where there was one or more CON Applications filed. The SAARs contain an assessment of each Applicant’s proposal, and a determination ultimately of which applicant or applicants best meets the statutory and rule review criteria. There is no fixed weight applied to any criteria, and the analysis by AHCA involves a weighing and balancing of all the review criteria.

There are four ways to access SAARs. First, there is a link from AHCA’s home page where all of the SAARs will be posted on February 20, 2015: http://www.fdhc.state.fl.us/MCHQ/CON_FA/Batching/applications.shtml. Sometimes, it can be later in the afternoon before the SAARs are actually posted. Second, any person or company can sign up to be added to AHCA’s email notification list for all CON batching cycle public notices, which includes the notification of the preliminary decisions on CON Applications. Third, AHCA directly contacts CON Applicants via the information provided in the initial CON Applications. Finally, within a few days of the decisions being announced, AHCA will publish formal Notices of Decisions in the Florida Administrative Register (“FAR”).

DECISIONS AFFECTING SUBSTANTIAL INTERESTS

Anytime AHCA makes a decision affecting substantial interests, AHCA must provide a “point of entry” for challenging the decision in an administrative trial. The “point of entry” explains when, where, and how the affected person or entity can challenge AHCA’s preliminary decision. Pursuant to Rule 59C-1.012 within 21 days after publication of the Notice of Intent in the FAR, a CON Applicant can request an administrative hearing to challenge the decision. The failure to timely file a proper request for administrative hearing challenging the denial of a CON Application shall result in the denial becoming final.

If a valid request for an administrative hearing is timely filed by a denied competing CON Applicant, a granted CON Applicant in the same sub-district shall have 10 days from the Notice of Litigation being published in the FAR to file a Petition challenging any or all other co-batched CON Applications.

Nursing home CON Applicants can only challenge other Applications that were comparatively reviewed for the same services in the same sub-district. Existing providers in the same district that will be substantially affected by the approval of a competing proposed facility or program can initiate or intervene in a challenge pursuant to Fla. Stat. §408.039(5)(c) (2014). Thus, existing providers are given a wider geographic area to be allowed to challenge a CON than competing CON Applicants.

An existing provider that intervenes within 21 days of the publication of the Notice of Decisions has full party status; however, an intervenor that does not intervene within 21 days is only granted status that is contingent upon the standing of the other parties to the litigation. This comes into play where there is a problem with the original parties’ standing, where the original parties decide to dismiss their challenge, or where the original parties resolved certain substantive issues in the case, through stipulations or otherwise, before the intervenor came into the case. It is often said that unless an existing provider files a Petition with 21 days of the FAR Notice of Decisions, the intervenor takes the case as they find it and is at the mercy of the original parties when it comes to maintaining standing.

FILING A PETITION

Petitions are filed at AHCA. Sometimes, inexperienced attorneys inadvertently file at the Division of Administrative Hearings (“DOAH”), which could raise jurisdictional issues if there is inadequate time to correct the error prior to the 21 day deadline.

Petitions must comply with the uniform rules of procedure under §120.54 (5)(b), including at least the following:

  1. Identify the Petitioner;
  2. State when and how the Petitioner learned of the decision;
  3. Explain how the Petitioner’s substantial Interest are affected by the proposed action;
  4. A statement of all material disputed facts;
  5. A statement of the ultimate facts that warrant the reversal of the decision;
  6. A statement of the rules or statutes that require a reversal or modification of the decision; and
  7. A statement of the relief sought.

FORMAL ADMINISTRATIVE HEARINGS

If timely Petitions are filed meeting all of the required substantive criteria, AHCA refers the cases to DOAH for assignment of an Administrative Law Judge (“ALJ”) to review the decisions being challenged. This hearing is considered a “de novo” proceeding, which means that the ALJ should not be influenced by AHCA’s preliminary decision set forth in the SAAR—and the SAAR is “not clothed with a presumption of correctness.” That said, statistically, AHCA preliminary decisions are more frequently upheld than overturned by the ALJs. Perhaps that is because AHCA becomes a party in the proceeding and typically presents expert witnesses to support its rationale for why it’s preliminary determination was correct. That said, there are a significant number of cases where AHCA’s preliminary decision to approve or deny a CON has been decided differently by the ALJ and AHCA has issued a Final Order upholding the ALJ’s determination.

An administrative hearing is similar to a civil court trial, with slightly relaxed rules of evidence. Parties conduct written discovery, and pre-trial depositions of witnesses. The parties then present their case through expert testimony, lay witness testimony, and submission of documentary evidence. There is an opening statement, direct examination and cross-examination of witnesses by attorneys, and legal arguments over admissibility of evidence.

One of the most common arguments in CON cases concerns whether the evidence being presented amounts to an “impermissible amendment” of a CON Application. By Rule and established case law, a CON Applicant cannot amend its Application to include new concepts or theories for approval that were not set forth in the CON Application. However, an Applicant may introduce new evidence, new or updated data, and testimony that elaborates and explains concepts or theories that were included in the CON Application.

By statute, a party requesting a hearing has a right to demand that the hearing be commenced within 60 days of assignment to an ALJ. As a practical matter, most hearings are not done on this expedited schedule. It is not unusual for the hearing process to take 4-6 months or longer. Hearings typically last about 2-3 days for each party involved. In multi-party proceedings a final hearing may last 3-4 weeks. Virtually all CON final hearings are held in Tallahassee.

Upon conclusion of a formal hearing, the parties are required to submit a Proposed Recommended Order (“PRO”) for the ALJ’s review and consideration. This is typically filed 30 days or so after the final hearing. The PRO includes proposed Findings of Fact as well as proposed Conclusions of Law. By Rule a PRO is supposed to be no longer than 40 pages, but is not unusual for an ALJ to expand the number of pages to 60 or 80 pages depending on the number of parties involved. The ALJ reviews all PROs submitted by the parties and then issues a decision in a Recommended Order.

EXCEPTIONS AND THE FINAL ORDER

Once the ALJ issues a Recommended Order, the case is remanded back to AHCA for issuance of a Final Order. Parties may file exceptions to the Recommended Order to explain why the ALJ’s decision is in error. In issuing a Final Order, AHCA may not reject an ALJ’s findings of fact, unless the Agency reviews the entire record, and finds that there is no “competent, substantial evidence” to support a specific finding. It is not the role of AHCA to reweigh the evidence, or judge the credibility of witnesses, or to substitute its balancing of the evidence for that of the ALJ. As to Conclusions of Law, AHCA cannot disturb a conclusion unless it is on a legal matter that is within AHCA’s expertise and jurisdiction (e.g., its governing statute and rules) and AHCA must state with particularity its reasons for rejecting or modifying the conclusion of the ALJ, and must make a finding that its substituted or modified conclusion of law is as or more reasonable than the ALJ’s conclusion.

The issuance of a Final Order by AHCA is the end of the formal hearing process, and unless a judicial appeal is taken, the CONs will be issued or denied as set forth in the Final Order.

FURTHER APPEALS

A party may appeal the Final Order to a District Court of Appeal. This appeal is limited only to a review of the record by a three judge panel based upon legal arguments submitted by the parties’ attorneys in legal briefs.

CONCLUSION

February 20, 2015, will be a historic date for nursing homes in Florida. No doubt there will be numerous preliminary approvals and numerous disappointed CON Applicants. The CON process also includes protections for those with existing operations that could be adversely impacted by a CON being issued to another facility. Thus, whether you are seeking approval for new a nursing home or are simply seeking to protect your existing operation, it’s important to stay engaged in the process and know your rights.

A nursing home wishing to compete in this batching cycle needs to begin preparing now. If you need help competing in this upcoming batching cycle, contact the experienced counsel at Smith & Associates.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

View PDF Version Here.

Nursing Home CON Update

The State Agency Action Reports (SAARs) for the latest CON batching cycle are scheduled to be released on 2/20/15. After that date, applicants that wish to challenge the Agency’s findings have only 21 days to file a Petition for Formal Administrative Hearing. These dates are very important and failure to meet the deadlines may forfeit your rights. To see a full explanation of the CON Batching Cycle, read “Nursing Home CON Batching Cycle Rapidly Approaching”. If you need help or have questions about the upcoming deadlines, please contact us here at Smith & Associates. Our attorneys are dedicated professionals with decades of experience in health care and CON law.