Tag Archives: AHCA

AHCA Preliminary Decisions on Skilled Nursing Facilities

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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Withdrawn Application: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Withdrawn Application: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.

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Update on Return of Nursing Home CON in Florida

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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.

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Update on Return of Nursing Home CON in Florida

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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.

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Update on Return of Nursing Home CON in Florida

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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.

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CON for SNF Beds: New Opportunities for ALF Operators

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After a 13 year moratorium on issuing Certificates of Need for new Skilled Nursing Facility beds, Florida is poised for the return of nursing home CON beginning in October. This will present new opportunities for owners and operators of Assisted Living Facilities. Those existing ALFs that would like to obtain approval to offer Skilled Nursing Facility services should be making plans now. It is expected that the competition for approval of new SNF beds will be substantial. But for those who plan ahead and develop a strong argument for need to offer SNF services as part of an overall continuum of care, the rewards can be well worth the effort.

Nursing Home CON Return

Under 2014-174, Laws of Florida, the Legislature has lifted the 13 year ban on CON for skilled nursing facility beds. The imposition of the moratorium was first put in place in 2001 as a Medicaid cost saving measure. The moratorium was originally intended to last 5 years but was extended in 2006 and again in 2011. In recent years, there has been growing pressure to lift the moratorium and to begin preparing for the aging of the baby boomers. Responding to calls to allow for new development of Skilled Nursing Facilities and beds, the legislature authorized the return of CON.

The legislation lifting the moratorium includes new exemptions and expedited reviews for current owners and operators of SNF facilities. For a full summary of the provisions in the bill, please see: www.smithlawtlh.com, and click on Articles.

Opportunities for ALF Operators

It’s certainly no secret that many ALF operators are seeing increasing acuity among their resident populations. This is especially true for those ALF providers with Limited Nursing Services and Extended Congregate Care licenses. Indeed, many ALF operators have complained that the moratorium on SNF beds has resulted in increased pressure to care for higher acuity residents who, in many instances, might be better served in a SNF setting if beds were available.

The lifting of the moratorium will allow some ALF operators to expand the scope of services they offer to include a broader continuum of care. For some, this may be the addition of a SNF unit to their existing ALF facility; for others, it may mean the conversion of an existing ALF to SNF. Ultimately, some providers may seek to offer a full continuum of independent living, Assisted Living, and SNF on one single campus.

Different Architectural and License Requirements

Those interested in seeking SNF beds should thoroughly investigate the differences between SNF and ALF services in terms of the architectural and physical plant requirements as well as the operational and licensure requirements. A full discussion is beyond the scope of this Article, but generally SNF facilities will be evaluated under Florida Building Code requirements for institutional construction and, of course, will be subject to the provisions of Chapter 400, Florida Statutes and Chapter 59A-4, Florida Administrative Code. A CON Application must document the applicant’s ability to meet these standards.

The Upcoming Time Line to Seek SNF Approvals Launches in October

Under existing Rules, AHCA has a schedule that governs the procedures and a detailed time-line for applying for a Certificate of Need. Applications for new skilled nursing facilities and bed additions may be submitted two times per year in the “batching cycle” for “other beds and programs.” A “batching cycle” review is required for any party that wishes to obtain a CON for a new facility or bed addition that is not authorized under an exemption or expedited review. The key dates for the next available batching cycle are as follows:

Event Deadline
Fixed Need Pool Projections 10/03/14
10 days to File Notice of Errors in a Fixed Need Pool 10/13/14
21 Days to File Formal Challenge to Fixed Need Pool 10/24/14
Letter of Intent Filing Deadline 10/20/14
16-day Grace Period Letter of Intent Filing Deadline 11/05/14
CON Initial Application Filing Deadline 11/19/14
Request Public Hearing 14 Days After Publication Of Application Filing in Florida Administrative Register
CON Application Omissions Response Deadline 12/24/14
State Agency Action Reports (SAARs) Issued 2/20/15
Deadline to File Petition for Formal Administrative Hearing to Challenge a SAAR 21 Days After Publication of the SAAR Results in the Florida Administrative Register

Based on the schedule for the next batching cycle, any party wishing to submit a CON Application should immediately begin the process of putting together a “CON Application Team” consisting of at least the following members:

  • Key management for owner/operators;
  • Experienced CON counsel;
  • Experienced health planner;
  • Experienced financial planner; and
  • A health care architect.

Conclusion

Those interested in expanding their scope of services to include SNF beds should pay careful attention to the CON process that will begin in the next several weeks. Letters of Intent must be filed by October 20th for an applicant to be considered in the upcoming batching cycle.

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.

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PREPARING FOR THE RETURN OF NURSING HOME CON PROCEEDINGS

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It’s now old news that the Florida Legislature has lifted the 13-year moratorium on the Certificate of Need program for new nursing homes in Florida. In addition to allowing new skilled nursing facility development projects to be authorized by CON, the legislation includes a variety of provisions that create new CON exemptions and expedited reviews for certain bed additions and facility replacement projects, as well as relaxing some of the standards for assessing need for new skilled nursing facilities and beds. For a full review of the specific provisions adopted in the CON law, see my newsletter article posted on-line at www.smithlawtlh.com. Below I address what skilled nursing facility owners and operators, and potential applicants, should be doing to prepare for the return of nursing home CON proceedings in Florida.

The Batching Cycle Deadlines

Under existing Rules, AHCA has a schedule that governs the procedures and a detailed time-line for applying for a Certificate of Need. Applications for new skilled nursing facilities and bed additions may be submitted two times per year in the “batching cycle” for “other beds and programs.” A “batching cycle” review is required for any party that wishes to obtain a CON for a new facility or bed addition that is not authorized under an exemption or expedited review. The key dates for the next available batching cycle are as follows:

Event Deadline
Fixed Need Pool Projections 10/03/14
10 days to File Notice of Errors in a Fixed Need Pool 10/13/14
21 Days to File Formal Challenge to Fixed Need Pool 10/24/14
Letter of Intent Filing Deadline 10/20/14
16-day Grace Period Letter of Intent Filing Deadline 11/05/14
CON Initial Application Filing Deadline 11/19/14
Request Public Hearing 14 Days After Publication Of Application Filing in Florida Administrative Register
CON Application Omissions Response Deadline 12/24/14
State Agency Action Reports (SAARs) Issued 2/20/15
Deadline to File Petition for Formal Administrative Hearing to Challenge a SAAR 21 Days After Publication of the SAAR Results in the Florida Administrative Register


Based on the schedule for the next batching cycle, any party wishing to submit a CON Application should immediately begin the process of putting together a “CON Application Team” consisting of at least the following members:

  • Key management for owner/operators;
  • Experienced CON counsel;
  • Experienced health planner;
  • Experienced financial planner; and
  • A health care architect.

FIXED NEED POOL PUBLICATION AND CHALLENGES

The process for CON Applications will commence with the publication of fixed need pools on October 3, 2014. The fixed need pool is a projection of the number of new skilled nursing facility beds that will be needed in each nursing home sub-district for a planning horizon that is three years in the future. The Need formula included in AHCA’s existing Rule (which should be adjusted by the changes required in the recent legislation lifting the moratorium) takes into account a variety of factors including: a) current and future population in two age groups (65-74 and 75 and older); b) the most recent bed rates for skilled nursing facilities in the District; c) occupancy rates in the district; d) a target occupancy rate; and e) allocation of beds among sub-districts. The “Net Need” number will be published in the Florida Administrative Register providing any interested parties with notice of AHCA’s projections of the number of needed beds that will be applied to review of any CON Applications submitted in the batching cycle. Unless a party successfully challenges a Fixed Need Pool publication, then the Need is “fixed” and will be applied to all applications in the batch.

The CON statute and applicable rules allow for a party to file a challenge to the publication of a Fixed Need Pool to correct any errors identified in the calculation. A party wishing to challenge a Fixed Need Pool must notify AHCA in writing within 10 days of publication of the Fixed Need Pool detailing any errors in the calculation. If AHCA agrees that an error was made, then it will file and publish a Notice of Corrected Fixed Need Pool. If AHCA disagrees that any error was made, a party may file a Petition for Formal Administrative Hearing within 21 days of the original Fixed Need Pool publication, and the matter will be referred to an Administrative Law Judge at the Division of Administrative Hearings for a formal hearing on the evidence.

LETTERS OF INTENT AND GRACE PERIOD LETTERS OF INTENT

In the upcoming batching cycle, any party interested in filing a Certificate of Need application for skilled nursing facilities or bed additions (non-exempt) must file a Letter of Intent by the deadline of October 20, 2014. If any party files a Letter of Intent in a sub-district, a “grace period” is triggered which allows any other party to submit competing a Letter of Intent to file a competing CON Application in the same sub-district where an applicant has already filed a Letter of Intent. The grace period deadline is November 5, 2014.

THE INITIAL CON APPLICATION

The initial CON Application deadline in the upcoming batching cycle is November 19, 2014. It is not uncommon for parties and their CON team to meet with representatives of AHCA prior to filing the initial CON Application to discuss any potential concerns or issues, and simply to obtain some insight to any issues that AHCA staff may feel are particularly important to address in the CON Application.

Typically a party will file only what is called a “shell application” by the initial application deadline—that is simply signing a blank application form and noting that the remainder of any information will be submitted with the Omissions Response.

Upon receipt of the Initial CON Applications, AHCA notifies each party of any Omissions in the initial Application. These Omissions letters have become boilerplate over the years, and AHCA typically sends a form letter indicating that all responses to all sections of the Application form are required to be submitted by the Omissions deadline.

PUBLIC HEARINGS AND WRITTEN OPPOSITION STATEMENTS

A Public Hearing may be requested after initial CON Applications are filed. A public hearing is an opportunity for interested members of the public, or any party, to provide AHCA with comments in support of or in opposition to any Application. The date and time of the Public Hearing will be published by AHCA. The hearings are typically held in the local Health Council offices in the area where the proposed project will be located shortly after the Omissions deadline. A party may use the Public Records Law to obtain a copy of the CON Application prior to the public hearing.

In lieu of a Public Hearing, parties may submit written statements to AHCA. It is not unusual for AHCA to receive detailed opposition statements from existing providers in the same District in response to a CON Application. Opposition statements must be submitted prior to the Omissions deadline, unless a Public Hearing is requested and held in which case written opposition materials can also be submitted at a public hearing.

OMISSIONS RESPONSES AND REVIEW CRITERIA

The deadline in the next batching cycle to file the Omissions Response to a CON Application is December 24, 2014. The Omissions Response is typically the real meat of the Application, and will usually be a document of 150 pages or more of narrative responses addressing the various CON review criteria, along with required financial schedules, audited financial statements, a financial feasibility analysis, and architectural schematic drawings of the proposed facility or bed addition.

CON Review Criteria set forth in Section 408.035(1), Florida Statutes, include the following:

(a) The need for the health care facilities and health services being proposed.

(b) The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant.

(c) The ability of the applicant to provide quality of care and the applicant’s record of providing quality of care.

(d) The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation.

(e) The extent to which the proposed services will enhance access to health care for residents of the service district.

(f) The immediate and long-term financial feasibility of the proposal.

(g) The extent to which the proposal will foster competition that promotes quality and cost-effectiveness.

(h) The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction.

(i) The applicant’s past and proposed provision of health care services to Medicaid patients and the medically indigent.

(j) The applicant’s designation as a Gold Seal Program nursing facility pursuant to s. 400.235, when the applicant is requesting additional nursing home beds at that facility.

There are a number of required schedules that pertain to the CON Application financial analysis, including the following:
     Schedule 1: Estimated Project Costs
     Schedule 2: Capital Projects List
     Schedule 3: Source of Funds Documentation
     Schedule 4: Historic Utilization
     Schedule 5: Projected Utilization
     Schedule 6: Staffing and Salaries
     Schedule 7: Projected Revenues
     Schedule 8: Projected Expenses and Net Income
     Schedule 9: Architectural Criteria
     Schedule 10: Project Completion Forecast
     Schedule 11: Fines, Levies and Overpayments.

Additionally, the CON Application includes a required Form setting forth Conditions Predicated on Award of CON. This form allows an Applicant to accept specific Conditions on the CON which may include “enticements” or “sweeteners” offered by an Applicant to make its CON Application more appealing than other applicants. Common conditions include a specific site location; implementation of a specific program or service that may be lacking in the community; enhanced staff or staff qualifications; and a specific minimum percentage of charity, indigent or unfunded patients to be served. Virtually anything may be offered as a Condition, and in some instances CON Conditions may make the difference between approval and denial of an application.

The Nursing Facility CON Rule (59C-1.036(3), Florida Administrative Code) also includes the following Review Criteria pertaining to an Applicant’s Quality of Care:

(e) Quality of Care. In assessing the applicant’s ability to provide quality of care pursuant to Section 408.035(1)(c), F.S., the agency shall evaluate the following facts and circumstances:

1. Whether the applicant has had a Chapter 400, F.S., nursing facility license denied, revoked, or suspended within the 36 months prior to the application.

2. Whether the applicant has had a nursing facility placed into receivership at any time during the period of ownership, management, or leasing of a nursing facility in the 36 months prior to the current application.

3. The extent to which the conditions identified within subparagraphs 1. and 2. threatened or resulted in direct, significant harm to the health, safety or welfare of the nursing facility residents.

4. The extent to which the conditions identified within subparagraph 3. were corrected within the time frames allowed by the appropriate state agency in each respective state and in a manner satisfactory to the agency.

(f) Harmful Conditions. The agency shall question the ability of the applicant to provide quality of care within any nursing facility when the conditions identified in subparagraphs (e)1. and (e)2. resulted in direct, significant harm to the health, safety or welfare of a nursing facility resident, and were not corrected within the time frames allowed by the appropriate state agency in each respective state and in a manner satisfactory to the agency.

There are also additional Review Criteria set forth in Rule 59C-1.030, Florida Administrative Code, which address specific needs of various underserved population groups, and how the applicant proposes to enhance access to services for such groups.

Finally, Applicants typically will include an “adverse impact” analysis to demonstrate that approval of the CON Application will not imperil or jeopardize the continued operation of other existing skilled nursing facilities.

COMPARATIVE REVIEW AND THE STATE AGENCY ACTION REPORT

Once all CON Omissions Responses are filed, AHCA then conducts a comparative review of CON Applications that are submitted for beds or facilities located in the same sub-district. The review includes an assessment of each Applicant’s proposal, and a determination ultimately of which applicant or applicants best meet 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.

AHCA’s initial decision for all CON Applications submitted in each sub-district is announced in a State Agency Action Report (SAAR). The SAAR sets forth the comparative review of the CON Applications, and the key points that resulted in AHCA’s recommendation to approve or deny an Application. Because so many applications are similar, it is often difficult for AHCA to articulate the precise reasons why one applicant may have been selected for approval over other applicants.

In a bygone era of CON review, decisions to outright deny or disqualify a CON Applicant from consideration were often made based upon perceived technical defects in an Application. Today, such disqualification of a defective CON Application is less common. Decisions typically address AHCA’s perception of the relative merits of each applicant’s proposal; although technical defects can still hurt the overall review of the merits of an application.

FORMAL ADMINISTRATIVE HEARINGS

After issuance of a SAAR, any co-batched applicant, as well as any existing provider of skilled nursing facility services in the same health planning District, may file a Petition for Formal Administrative Hearing to challenge AHCA’s initial decision. Thus, a co-batched applicant can request a formal hearing to demonstrate through evidence that its application is superior to other applicants that were approved, or conversely that other applicants had defects or problems with the application that should have resulted in denial. Similarly, an existing provider in the same District may challenge the approval of an applicant for a new facility based upon a demonstration that its existing facility will suffer an adverse impact, and that a preliminarily approved application does not on balance meet the CON review criteria set forth in statute and rule.

If Petitions are filed, the cases are referred to the Division of Administrative Hearings (DOAH) for assignment of an Administrative Law Judge 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.”

An administrative hearing is similar to a civil court trial, with slightly relaxed rules of evidence. Parties conduct written discovery, and conduct 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. These issues are often hotly debated during the course of a CON hearing.

By statute, a party requesting a hearing has a right to demand that the hearing be commenced within 60 days of assignment of an ALJ at DOAH. Most hearings are not done on this expedited schedule, however, and 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 involving several applicants, existing providers, and AHCA, a final hearing may last 3-4 weeks. All final hearings are held at DOAH headquarters 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

Anyone who operates or wishes to operate a Skilled Nursing Facility in Florida should pay careful attention to the CON process that will begin in October of this year. There will be ample opportunities for parties that are seeking to expand skilled nursing operations in Florida. 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 nursing home development or are simply seeking to protect your existing operation, the return of nursing home CON in Florida is likely to be of interest.

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.

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Assisted Living in Florida, How is it Changing?

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An Assisted Living Facility (ALF) is a residential establishment that is designed to provide personal care services to one or more persons in the least restrictive and most home-like environment. Personal services that are provided to residents of an ALF are services such as physical assistance with, or supervision of, the activities of daily living and the self-administration of medication. ALFs can range in size from one resident to several hundred and may offer a wide variety of personal and nursing services designed specifically to meet an individual’s personal needs. The services available in these facilities are intended to help residents remain as independent as possible and for some to “age in place” when their health care needs increase.

Standard Licensed ALFs

A standard ALF must be licensed by the Agency for Health Care Administration (AHCA). The official definition of an assisted living facility is any building or buildings, section or distinct part of a building, private home, boarding home, home for the aged, or other residential facility, whether operated for profit or not, which undertakes through its ownership or management to provide housing, meals, and one or more personal services for a period exceeding 24 hours to one or more adults who are not relatives of the owner or administrator. Specialty licensed facilities are available for individuals with increased health care needs. There are three types of specialty licenses: Extended Congregate Care License, Limited Nursing Services License and Limited Mental Health License.

Regardless of the facility’s license status, residents living in ALFs cannot have conditions that require 24-hour nursing supervision. The only exception to this is for an existing resident who qualifies for and receives hospice services from a licensed hospice while continuing to reside in an ALF.

Specialty License: Extended Congregate Care

An Extended Congregate Care (ECC) license is issued to an assisted living facility that provides services beyond those authorized for a standard ALF, meaning that they may provide additional nursing services and total assistance with personal care services. New facilities may apply for an ECC license at the time of initial application. Existing facilities qualifying to provide extended congregate care services must have maintained a standard license and may not have been subject to administrative sanctions during the previous two years, or since initial licensure if the facility has been licensed for less than two years. Mandatory services that must be provided include, but are not limited to total help with the activities of daily living, more frequent nursing assessments and assistance with administered and self-administered medications.

Specialty License: Limited Nursing Services

A Limited Nursing Services (LNS) License is issued to an ALF that provides nursing services that are beyond what a standard ALF is licensed to provide. Residents living in an ALF with a LNS license must meet the same residency criteria for a standard licensed ALF; however, they may also receive a limited number of nursing services. Existing facilities qualifying to provide limited nursing services shall have maintained a standard license and may not have been subject to administrative sanctions that affect the health, safety, and welfare of residents for the previous two years or since initial licensure of the facility has been licensed for less thantwo years. The nursing services available in a limited nursing services facility are more extensive than what is provided in a standard ALF and are provided pursuant to the resident’s service plan.

Specialty License: Limited Mental Health

A Limited Mental Health (LMH) License is issued to a standard ALF that serves three or more mental health residents. A mental health resident is an individual who receives social security disability income or supplemental security income due to a mental disorder as determined by the Social Security Administration and receives optional state supplementation. To obtain a limited mental health license, a facility must hold a standard license as an assisted living facility, must not have any current uncorrected deficiencies or violations, and must ensure that, within six months after receiving a limited mental health license, the facility administrator and the staff of the facility who are in direct contact with mental health residents must complete specified training.

ALF Staff Training

Administrators and Managers: Administrators and other ALF staff must meet minimum training and education requirements that are established by the Department of Elder Affairs, that are comprised of “core” training, in-service training and continuing education that is required throughout their tenure. Every facility shall be under the supervision of an administrator who is responsible for the operation and maintenance of the facility including the management of all staff and the provision of adequate care to all residents. Administrators who supervise more than one facility shall appoint in writing a separate “manager” for each facility.

Staff: Staff with direct care responsibilities are required to have in-service training that covers a variety of topics, including infection control training, elopement training, training on “do not resuscitate” orders and may have to complete training on special topics such as self-administration of medication, Alzheimer’s disease and related disorders, and HIV/AIDS training. Staff in “direct contact” means direct care staff and staff whose duties take them into resident living areas and require them to interact with residents (this does not include maintenance, food service, or administrative staff). There are additional specific requirements for ECC staff and LMH staff, such as continuing education on ECC and LMH specific topics.

Resident Rights

Each resident living in an ALF has special rights that are delineated in Florida Statutes. An example of some of these rights are that no resident of a facility shall be deprived of any civil or legal rights, benefits, or privileges guaranteed by law, the Constitution of the State of Florida, or the Constitution of the United States as a resident of a facility; every resident shall have the right to live in a safe and decent living environment, free from abuse and neglect; be treated with consideration, respect and with due recognition of personal dignity, individuality, and the need for privacy. Each patient is given a copy of their rights upon entering the ALF.

Protection of Resident Rights

The Long-Term Care Ombudsman Program is comprised of 17 local councils across Florida, all offering free, localized advocacy services. The Ombudsman program is housed in the Department of Elder Affairs (DOEA) and is headed by the State Long-Term Care Ombudsman, Leigh Davis, who is appointed by the DOEA secretary. An ombudsman is a specially-trained and certified volunteer who has been given authority under federal and state law to identify, investigate and resolve complaints made by, or on behalf of, long-term care facility residents. Ombudsmen respond to resident complaints and concerns ranging from issues with medication and care administration to matters of dignity and respect. It is the ombudsman’s role to protect the legal rights of residents and assure that they receive appropriate treatment and quality care. Anyone can report a concern, including residents, relatives, friends, facility staff, legal representatives and other concerned citizens. Complaints may be related to the facility, its employees, or any agency or person who threatens or violates the rights, health, safety or welfare of a resident. Complaints filed with the Long-Term Care Ombudsman Program are kept completely confidential, unless permission is given by the resident or complainant to disclose related information.

Changing Law

Over the past two legislative sessions, lawmakers have been trying to strengthen the regulation of ALFs. This legislative push was prompted by the Miami Herald’s investigative series “Neglected to Death” published in April 2011. This series reported numerous instances where the investigative journalists alleged that AHCA failed in its duty to protect the residents of Florida’s ALFs. The investigative series reported on a series of incidents that occurred in licensed ALFs that resulted in death or serious injury to a resident. The journalists created the impression that these incidents were caused by lax enforcement efforts by AHCA. The article stated that AHCA repeatedly caught facilities breaking the law; however, AHCA failed to act on the violations, or in some cases only partially punished the violators agreeing to reduced fines and suspensions rather than full fines and revocation of licenses. As reported in the article, the ombudsman program was reporting more and more occurrences of abuse and neglect in Florida ALFs, however according to the articles, AHCA failed to investigate a large portion of the cases.

Prompted by the Miami Herald investigative reports, in July 2011, Governor Rick Scott directed AHCA to examine the regulation and oversight of ALFs. AHCA’s response was to increase its enforcement efforts, and Administrative Complaints with severe sanctions for ALF operators found not to be in compliance with licensure standards. AHCA also created a workgroup with the objective to make recommendations that would improve the monitoring of safety in ALFs. The workgroup had two phases and produced a final report to the Governor and Legislature on November 26, 2012. In June 2012, the DOEA, in consultation with AHCA, the Department of Children and Families (DCF) and the Department of Health (DOH), began rulemaking meetings to address the problems with ALF regulation.

In the 2013 legislative session, an “ALF reform bill” was proposed but failed to pass. In the most recent 2014 legislative session Senate Bill 248, with a proposed effective date of July 1, 2014, was proposed to strengthen the regulation of ALFs and make other regulatory changes to improve their quality. Among other goals, the bill would have clarified issues regarding mental health residents in an ALF relating to necessary services and would require facilities with one or more, rather than three or more state supported mental health residents to obtain a Limited Mental Health License. The bill proposed changes to resident rights regarding the protection against retaliatory action for presenting grievances. The proposed bill also authorized additional staff duties in the assistance with self administration of medication and required additional training for staff. However, the bulk of the bill was directed at the regulation of ALFs by AHCA through increased fines for violations, double fines for repeated violations, fines against a facility that does not show good cause for terminating the residency of an individual, specifying the circumstances under which AHCA must impose an immediate moratorium on a facility, and even authorizing AHCA to revoke the license of a facility that has or had a 25 percent or greater financial ownership interest in a second facility which closed due to financial inability to operate or was the subject of other specified administrative actions.

The proposed bill was estimated to generate approximately $1.1 million of additional net revenues for AHCA per year based on the revised fine amounts. Of course, one aspect of the increased administrative penalties and fines that would be handed out by AHCA is that there will be an increased number of legal cases brought on by the harsher penalties and fines. In the face of opposition from many in the ALF industry, the bill failed to pass.

What does this mean for providers?

Although Senate Bill 248 did not pass during this legislative session, the fact remains that lawmakers will most likely continue in their pursuit of stricter regulation of ALFs. In fact, AHCA has already launched a regulatory “crackdown” on ALFs. If an ALF is cited for deficiencies during a survey, investigation or monitoring visit, AHCA may file an Administrative Complaint and seek to impose sanctions. Civil penalty sanctions available to AHCA depend on the class of violation. There are four classes: Class I violation penalties are between $5,000 and $10,000 for each violation; for each Class II violation between $1,000 and $5,000; for each Class III violation between $500 and $1,000; and for each Class IV violation between $100 and $200 for each violation if the problem is not corrected. During fiscal years 2011-2013 AHCA entered 115 final orders for Class I violations, 749 final orders for Class II violations, 507 final orders for uncorrected Class III violations, and 18 final orders for uncorrected Class IV violations.

In addition to financial penalties, AHCA may also sanction an ALF by imposing an emergency moratorium or suspension on patient admissions, denial of a license, temporary license suspension and permanent revocation of the ALF license. For the period between July 1, 2012 and June 30, 2013, the current count for AHCA actions against ALFs is 43 cases involving suspension, revocation, moratorium on admissions or denial of licenses. Below are examples of AHCA’s crackdown and all providers should be aware that they are susceptible to increased scrutiny by AHCA.

Premier Adult Care:

  • Owned two houses, one in Titusville operating as a five-bed adult family care home and one in Merritt Island operating as a two-bed ALF seeking to operate under the exemption that “Any person who provides housing, meals, and one or more personal services on a 24-hour basis in the person’s own home to not more than two adults who do not receive optional state supplementation. The person who provides the housing, meals, and personal services must own or rent the home and reside therein.”
  • The Merritt Island home was under a lease agreement between the owner and the caregiver who provided services to the two residents of the Merritt Island home that was operating as an ALF under the “exception.”
  • AHCA filed an administrative complaint against the ALF stating that it was operated and maintained without a license, which the Agency determined directly threatened the physical or emotional health, safety, or security of the residents; and also that it failed to maintain its operation in accordance with the minimum requirements of law, failing to provide care and services at mandated minimum standards, and intentionally operated an unlicensed ALF. AHCA sought fines in the amount of $7,000.
  • The case did not involve any allegation of abuse, neglect, or mistreatment in any manner whatsoever of any resident of either the Merritt Island or Titusville homes. The sole issue was whether the Merritt Island home was required to obtain a license, or was instead exempt from licensure.
  • Although the Administrative Law Judge recommended only a temporary suspension and payment of a fine, AHCA over-ruled the recommendation and the ALF’s license was permanently revoked.

Pompano Retirement Village

  • Owner and vice president of the ALF Pompano Retirement Village was a controlling interest as defined by Florida Statute.
  • 3/5/12 A criminal information filed charging the Owner with unlawful receipt of kickbacks in a federal health care program, considered to be a disqualifying offense.
  • 4/5/12 Owner of the ALF was arrested.
  • April 2012 Plea was entered.
  • 6/15/12 Judgment entered against Owner.
  • 7/12/12 Documents filed with Florida Division of Corporations evidencing the resignation of Owner as vice president of the ALF.
  • 10/19/12 AHCA filed an Amended Administrative Complaint charging the ALF with not timely removing Owner from his position with the ALF, constituting an act upon which a license may be denied and furthermore that it failed to abide by the background screening standards of the Florida Statutes.
  • The ALF’s license was therefore revoked.

Personal Care:

  • Two facilities and each location had 14 beds.
  • The ALF was threatened with an Emergency Suspension Order after a diabetic resident had to be transported to the hospital with a stage 3 decubitus ulcer on her foot.
  • AHCA filed at least five Administrative Complaints against these two facilities collectively over a period of two years, alleging any combination of the following: failure to keep medication records updated, provide proper assistance with medication, failure to document changes in medications, failure to have background checks on employees, failure to provide safe and decent living environments (medications not in lock box), and similar deficiencies.
  • AHCA sought license revocation and administrative fines.
  • AHCA settled for a voluntary relinquishment of both ALF licenses within one year and no fines.

The Paradise ALF:

  • Administrative complaint seeking a $1,000 fine was filed after AHCA conducted a survey and alleged that two staff members were lacking in background screening clearance.
  • Administrative complaint seeking a $5,000 fine and revocation of license filed after a complaint survey wherein it was alleged that among other things, the ALF failed to protect the residents from unsafe conditions and deficient practices that exist in the facility.
  • AHCA issued an Immediate Moratorium on Admissions and Emergency Suspension of License Order after the complaint survey.
  • The ALF failed to timely respond to the Administrative Complaint and Election of Rights, thus waiving its right to a hearing to contest the allegations and sanctions sought in the Administrative Complaint.
  • The ALF’s license was therefore revoked.

Provider Rights

If an ALF receives an Administrative Complaint from AHCA, it is notified of the right to request an administrative hearing. If the ALF elects to seek an administrative hearing, there are two options, an informal administrative hearing or a formal administrative hearing. The ALF must request the hearing within 21 days of the day the Administrative Complaint was received. At an informal hearing, the ALF may submit testimony and written evidence to AHCA to show that the proposed agency action contained in the Administrative Complaint is too severe or that the fine should be reduced. If a formal hearing is requested, the ALF will have the opportunity to present its case in front of an administrative law judge appointed by the Division of Administrative Hearings, not just to plead their case with AHCA. The attorney for the ALF will be able to present testimony and witnesses, can cross-examine witnesses presented by AHCA, can conduct formal discovery to obtain information that AHCA possesses and will have the opportunity to submit proposed findings of fact and conclusions of law for consideration by the administrative law judge. The attorney has the opportunity to fight for the ALF’s rights to operate and that decision will be made by an administrative law judge, not AHCA.

Conclusion

All ALFs will need to increase their vigilance in complying with licensure standards, training standards and resident care. The purpose of increased standards is to protect the residents of ALFs. Unfortunately, sometimes the side effect of stricter fines and heavier penalties is unfair policing of providers which results in higher agency revenue. If you have recently had a survey with poor results and an Administrative Complaint is imminent, call us today. Don’t wait.

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