96-003249 Agency For Health Care Administration vs. Integrated Health Services, Inc., D/B/A Hearitage Park Of Bradenton Status: Closed Recommended Order on Friday, November 15, 1996.

Summary: Nursing home which replaced generator without prior agency approval was guilty of rule violation but action did not justify maximum fine.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Petitioner, )

)

vs. ) CASE NO. 96-3249

)

INTEGRATED HEALTH SERVICES, INC., )

d/b/a HERITAGE PARK OF BRADENTON, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

A hearing was held in this case in Tampa, Florida on September 19, 1996,

before Arnold H. Pollock, an Administrative Law Judge with the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Thomas W. Caufman, Esquire

Agency for Health Care Administration

7827 North Dale Mabry Highway

Tampa, Florida 33614

For Respondent: R. Bruce McKibben, Jr., Esquire

Holland and Knight

Post Office Box 810

Tallahassee, Florida 32302-0810

STATEMENT OF THE ISSUES

The issue for consideration in this case is whether Respondent's nursing

home operation in Bradenton should be administratively fined because of the

matters alleged in the Administrative Complaint filed herein.

PRELIMINARY MATTERS

By Administrative Complaint dated June 4, 1996, James R. Gregory, Bureau

Chief for the Agency for Health Care Administration's (Agency) Office of Plans

and Construction, (OPC), seeks to impose an administrative fine of $5,000.00 on

Respondent, Integrated Health Services, Inc. d/b/a Heritage Park of Bradenton

(Heritage), because of Heritage's replacement of an electrical generator in its

Bradenton, Florida nursing home in September, 1995 without first obtaining the

written approval of the Agency therefor, in violation of rule 59A-4.133, Florida

Administrative Code, and Section 400.121, Florida Statutes. Heritage petitioned

for formal hearing on the matter and this hearing ensued.

At the hearing, Petitioner presented the testimony of Raymond L. Mehaffey,

Jr., a fire inspector for the Agency; James R. Gregory, the Agency's Bureau

Chief for its OPC; and through Petitioner's Exhibit One, the deposition

testimony of Weyman Davis, at the time in issue, a professional engineer

administrator, electrical. Respondent presented the testimony of Nina K. M.

Willingham, administrator of its Bradenton facility; and Duane E. Hathaway,

maintenance director at that facility. Respondent also introduced Respondent's

Exhibits A - D. The undersigned also officially recognized Rule 59A-4.133,

Florida Administrative Code, and Chapter 400, Florida Statutes.

A transcript of the proceedings was furnished and subsequent to the receipt

thereof, both counsel submitted Proposed Findings of Fact and written argument

which have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to the issues herein, the Petitioner, Agency for

Health Care Administration, was the state agency responsible for the

licensing of and the regulation of activities of nursing homes in Florida. The

Respondent, Integrated Health Services, Inc., operated Heritage Park of

Bradenton, a 120-bed nursing home facility in Bradenton, Florida.

2. Soon after his employment by the Respondent, Duane E. Hathaway, the

facility maintenance director, was conducting a familiarization survey of the

facility's physical plant. He had previously been briefed on the possible

severity of hurricane winds experienced in the area and was interested in the

two back-up systems the facility had to provide electrical power in the event

the regular power supply was interrupted. One system was a battery system which

would operate the nurse call system and fill certain other emergency

requirements. The other back-up system was a 90 kw Kohler generator powered by

a 460 horsepower Ford propane engine. This generator was to be the main power

source during emergency conditions which resulted in the main power supply being

interrupted. During the course of his inspection, Mr. Hathaway found that the

generator was not performing properly. Not relying only on his own inspection,

he had the unit surveyed by a local generator company, Tampa Armature Works,

(TAW), which advised him the generator was not holding a load as it was supposed

to do. Though the generator worked, its performance was not reliable in an

emergency and often resulted in a requirement for each load factor to be brought

on line manually. There also was a question as to whether it could carry a full

load for an extended period of time.

3. Under the Agency's rules governing the operation of nursing homes,

existing licensed nursing homes are not required to have emergency generators

unless they employ life support systems in the facility. Heritage Park of

Bradenton does employ life support systems and did at the time in issue.

Therefore, it was required to have an emergency generator installed and operable

in the facility.

4. When the difficulty was discovered with the facility's existing

generator, either Mr. Hathaway or Ms. Wilingham telephoned to Mr. Jay Grollman,

the director of design and construction for Integrated, Heritage's parent

company, who knew of a spare generator located at the company's Miami facility.

This generator in Miami was good for Heritage because it was nearby and was

certified for use in health care facilities by the Agency. It had been

installed and maintained at the Miami facility by TAW which, when contacted,

indicated that all factors being considered, it was the best option for Heritage

Park of Bradenton and would meet their needs. This generator also met all

standards set by the National Fire Protection Association.

5. Thereafter, Respondent hired TAW to move the generator from the Miami

facility to the Bradenton facility and install it. It was packaged at Miami,

placed on a truck and transported to Bradenton where it was installed. Once

installed, done in one day, a load bank test was done which indicated some minor

difficulties which were remedied at once. The building load test was then done

successfully and so was a subsequent bank test. The generator now is working

properly and is currently tested weekly. Only minor discrepancies are ever

noted and these are immediately corrected.

6. On December 20, 1995, during the course of an annual inspection of the

Respondent's Bradenton facility, Mr. Mehaffey, the Agency team's fire inspector,

was advised by Mr. Hathaway that the facility's emergency generator recently had

been changed out because they had been having problems with it in the past and

had chosen to replace it. When Mr. Mehaffey asked if the facility had submitted

plans for approval in advance of the change, Mr. Hathaway did not know.

Somewhat later that day, however, in the Administrator's office, Ms. Willingham

indicated that plans for the change-out had not been submitted in advance. At

that point, Ms. Willingham indicated the facility had other approved work under

way and she thought the generator change-out might be included in that.

Nonetheless, Mr. Mehaffey wrote up the change-out as a violation on a formal

complaint which was consistent with other prior instructions he had received.

7. According to Ms. Willingham, who has been an administrator with the

Respondent for several years, renovations other than the replacement of the

generator had been granted a CON waiver by the Agency and submitted to the

Agency's OPC before the generator work was contemplated, She was advised in

September, 1995 by Mr. Hathaway that the existing generator was not up to snuff,

and because it was the middle of a very active hurricane season, she called Mr.

Grollman for advice. Because the Heritage Park facility has contracts to

receive evacuees from other facilities during emergencies, and also has the need

to shelter staff families and others in need, a reliable emergency generator is

important to have in the event of a hurricane or other disaster. Ms.

Willingham's immediate concern was for resident safety. When Mr. Grollman

recommended the change in the generator, the new unit was installed within a

week and a half of identification of the problem.

8. As a result of the December 1995 annual survey, the facility was

awarded a superior rating. Aside from the write-up for the generator, only a

few minor deficiencies were identified, none of which were serious and all of

which were corrected immediately. The generator write-up was included only

because representatives of the facility, Mr. Hathaway and Ms. Willingham, had

advised the Agency inspector of the change-out. No attempt was made to hide it.

9. After the inspection, on December 31, 1995, Mr. Grollman, by letter,

contacted the OPC to see if the generator replacement could be added to the

existing project. Mr. Grollman's rationale in support of that proposal was that

the failure to secure advance approval was an oversight occasioned by the

emergency situation and the partial and impending failure of the system during

the hurricane season. No immediate response from the Agency was forthcoming.

However, on June 4, 1996, Mr. Gregory signed the Administrative Complaint

reflecting the intention to impose a $5,000.00 fine. On June 24, 1996, another

official from OPC, by letter, advised Ms. Willingham that the construction

project had been surveyed and occupancy of the area approved subject to certain

deficiencies noted in the survey. Only six deficiencies were noted. Of these,

only one related to the generator, and that one required " a grade in wall

opening at the generator exhaust area." In reality, that was a construction

item.

10. The cost of the project to which the generator was added was initially

$285,000. The cost of shipping and moving the generator was an additional

$25,000.

11. Ms. Willingham recognized that the Agency's rule requires that all

"contemplated" new construction or acquisition be submitted for prior approval

but she is bemused by what the term "contemplated" actually means. Her prior

inquiries to the Agency provided no clear answer. One source she contacted, not

further identified, indicated that replacement of a product with a like product

does not require prior approval. A question as to the need to seek prior

approval to replace wall paper met with diametrically opposing advice. Ms.

Willingham contends, and it is obvious, that she did not make a conscious

decision not to seek agency approval of the generator change. She merely felt

it was not that sort of project which needed to be reported. Fire alarm and

nurse call replacements were called in for prior approval.

12. OPC employs teams of architects and engineers to review all plans for

modifications of and improvements to regulated health care facilities and

reviews on site the construction related thereto for compliance with pertinent

agency rules and statutes dealing with fire safety. It also reviews system

installations and design criteria, air distribution, pressure relationships and

fire alarm, nurse call and gas transmission systems. OPC is a part of the

Governor's Emergency Operation Center and provides response teams in hurricane,

flood or emergency areas to do assessments and give assistance as necessary.

Some teams are based at diverse areas throughout the state. Teams are

constantly on the road, and other teams stand ready in the office to be deployed

in any emergency situation.

13. According to Mr. Davis, a professional engineer who was working for

the Agency at the time, personnel from OPC's Orlando office were available to go

to Bradenton on very short notice if necessary and, in fact, were going there on

a regular basis. As such, they could have taken part in an approved generator

swap-out had Respondent sought approval. That being the case, the Agency

contends, there was no emergency situation justifying non-compliance with the

"prior approval" rule.

14. Another function of OPC is to see that all required tests are carried

out on new generators and that they are properly installed and within code

before they come on line. The office also participates in the development of

generator watch situations in the case of temporarily non-conforming generators.

A significant part of the office operation is to approve plans for emergency

situations.

15. A generator is a part of the electrical system of a nursing home. In

the instant case, a 30-bed medical specialty unit was being constructed which

would hold patients needing life support. In a case such as here, the existing

generator might be increased in size and the generator integrated with the

existing electrical system.

16. Nursing home administrators are advised by an Agency newsletter of all

new requirements. In August 1994, this newsletter included an article

concerning the requirements for submittal of plans for any construction or

modification, regardless of how small. In addition, in either April or May

1994, Mr. Gregory sent a mass mailing to every nursing home administrator in the

state regarding the need to advise OPC in advance of every modification so that

a determination could be made if further review is necessary.

17. Mr. Gregory receives three to four replies per day (300 - 400 per

year) from which he determines whether the proposed project is sufficient or

what else might be needed. Generator problems he has experienced include

leaking oil, a loss of coolant or air pressure, overheating, a lack of

monitoring alarms and the like.

18. In the instant case, the Respondent did not submit plans for any

generator upgrade in 1995 prior to the installation. What Mr. Gregory describes

as "upgraded construction" came to his attention through a December 20, 1995

recommendation for administrative complaint submitted by Mr. Mehaffey. After

receiving it, Mr. Gregory discussed the situation and what had to be done to

rectify the situation by telephone with the planning director for Integrated,

Mr. Grollman. He also had a discussion with the architect of the approved

project. That project did not address the need for a different generator.

19. Mr. Gregory contends that when Respondent identified the need for a

replacement generator it should have phoned OPC and so indicated. The parties

would then have had a dialogue on what had to be done to include, if necessary,

sending an engineer to the site to insure the generator was installed correctly

and according to code. In the instant case, TAW, which installed the generator,

was not under the supervision of a professional engineer as Gregory indicates

was required.

20. The generator in issue was installed before any plans were submitted

for review. As a result, according to Mr. Gregory nothing was done to insure it

was installed and tested properly and according to code. No information was

provided to the Agency to indicate if the new generator matched the need it

would be used to meet or if it was the proper size, had the proper breaker

ratings or the appropriate ACI ratings.

21. Even though the Agency learned of the installation in December 1995,

it did not send out an engineer to inspect the work until April 1996.

Information received from the installer by the Agency's design engineers, and

from the plans sent in, indicated deficiencies. Inspection showed the generator

had an overheating problem along with other installation issues relating to

alarms. These deficiencies, acknowledged by Mr. Hathaway, were corrected and

the installation approved with the other construction in June 1996, well after

the generator was installed.

22. Mr. Gregory knows of no Agency rule which refers to emergency

situations, except for the state emergency plan, EFS-8, which deals with natural

or nuclear disasters. The plans for the generator were finally submitted in

March 1996, after Mr. Gregory spoke with the architect who was supervising the

new approved project. The architect said he would arrange for the plans to be

submitted for inclusion in the ongoing project. Mr. Gregory concurred with this

plan subject to CON office approval. Nevertheless, even in light of this and

considering the conversations with Mr. Grollman and Mr. Mehaffey; and

recognizing there was no intent to deceive shown by the Respondent, Mr. Gregory

still recommended imposition of the maximum fine. This was after Respondent, in

December 1995, requested, in writing, a waiver of the Administrative Complaint

and agreed that the plans and installation would be modified as required.

CONCLUSIONS OF LAW

23. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter in this case. Section 120.57(1), Florida

Statutes.

24. Rule 59A-4.133(3), Florida Administrative Code, requires that all

contemplated additions, conversions, renovations or alterations shall be

submitted for approval or exemption from the plans review process prior to

implementation. Subsection (5) of that rule outlines the process for plan

submission and at subsection (5)(b)5, specifically references electrical

engineering drawings of alternate power supplies. Subsection (7) of the rule

provides that construction work shall not be started on covered projects until

written approval has been given by the Agency.

25. Respondent defends against the Agency's proposed discipline by urging

that the Agency's use of the word, "construction", as contained in Subsection

(7) of the rule, to support its proposed action is improper, contending that no

construction was undertaken or accomplished in this case by the removal of the

existing generator and the installation of the replacement. It contends that

the Agency's reliance on the fact that Integrated did not seek or obtain

approval to replace the generator prior to initiating replacement action to

support discipline is misplaced.

26. To be sure, the word "construction" is not defined in the rule.

Respondent urges that a reading of the entire rule makes it clear that the term

contemplates events which affect the occupancy of the building or the physical

plant.

27. It should be noted that consistent with Rule 59A-4.133(8), Florida

Administrative Code, the Agency allows approved projects under construction to

be expanded in scope if the applicant deems the additional work is necessary,

and in this case, the Agency subsequently approved the generator replacement in

issue as an addition to an approved project.

28. In the instant case the Respondent claims, and the Agency does not

contest, that the replacement was a response to an emergency situation. The

Agency contends, however, and that contention has not been clearly rebutted,

that it had a program in place to provide for expedited evaluation and approval

of emergency situations through inspection by field office representatives who

could, upon short notice, come to the scene of the proposed work, assess its

requirement and the sufficiency of the proposed corrective action, and recommend

approval or denial with a near-time response. Respondent notes, however, that

the Agency has no rule in place to address emergency situations such as here but

instead, relies on the existing rule provisions discussed herein and a non-rule

policy to resolve situations on a case by case basis.

29. In such cases, the Agency must establish its policy by expert

testimony or other competent and substantial evidence which is "appropriate to

the nature of the issues involved." Health Care and Retirement Corp. of America

v. DHRS, 559 So.2d 665 (Fla. 1st DCA 1990); Beverly Enterprises-Florida, Inc. v.

DHRS, 573 So.2d 19, 22 (Fla. 1st DCA 1990). While in this case the evidence

presented by the Agency did not include expert testimony in the classical sense,

the evidence for the Agency clearly established the reasonableness of its policy

and ample reason therefor.

30. In addition, the evidence established that there was a sufficient

hiatus between the time the generator problem was discovered and the time the

replacement was moved and installed to allow the Respondent to notify the Agency

of its need. Had Respondent done so, the onus would have been transferred to

the Agency to evaluate the situation and take appropriate action.

31. Further, the evidence also established that once the replacement

generator was installed, operational difficulties existed with it which required

correction. These corrections were accomplished, but it was not until several

months after installation that Respondent submitted its request to have the

replacement of the generator included in the previously approved construction

program. Under the circumstances, it is clear that Respondent failed to submit

its plans for generator replacement in advance as required.

32. Sections 400.102(1)c and 400.121, Florida Statutes, authorize the

Agency to impose a fine of $500 per day, up to $5,000 for a violation of rules

adopted under Chapter 400, Part II, Florida Statutes. The Agency has chosen to

assess a fine of $5,000, the maximum. No evidence was presented to indicate

whether the Agency, in assessing its penalty, considered any of the mitigating

factors which existed at the time.

33. Among those factors which might be considered as mitigating are the

fact that the then existing generator was defective and needed replacement; that

the facility needed an emergency generator to provide appropriate care for its

residents; that the value of the improvement, when considered independently, was

not significant; that the Respondent brought the replacement to the attention of

the Agency voluntarily; that Respondent's previous attempts to determine the

definition of the term "contemplated" had not been successful; that the instant

project reasonably might not be considered construction or modification and that

the replacement was eventually approved by the Agency. While the need for the

Agency to maintain control over the expenses of health care facilities is

abundantly clear, in this case the violation does not seem so egregious that

mitigation should not be considered. Under the circumstances, a fine of $500

would seem to be appropriate.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is,

therefore:

Recommended that the Agency for Health care Administration assess an

administrative fine of no more than $500 for Respondent's failure to submit

plans for generator replacement to the Agency in advance of project initiation,

as required.

RECOMMENDED this 15th day of November, 1996, in Tallahassee, Florida.

___________________________________

ARNOLD H. POLLOCK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of November, 1996.

COPIES FURNISHED:

Thomas W. Caufman, Esquire

Agency for Health Care

Administration

7827 North Dale Mabry Highway, Number 100

Tampa, Florida 33614

R. Bruce McKibben, Jr., Esquire

Holland and Knight

Post Office Box 810

Tallahassee, Florida 32302-0810

Sam Power

Agency Clerk

Agency for Health Care

Administration

Fort Knox Building Three, Suite 3431

2727 Mahan Drive

Tallahassee, Florida 32308

Jerome W. Hoffman

General Counsel

Agency for Health Care

Administration

2727 Mahan Drive

Tallahassee, Florida 32309

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the

date of this Recommend Order. Any exceptions to this Recommended Order should

be filed with the agency which will issue the Final Order in this case.