96-005179CON Mederi Of Dade County, Inc. vs. Agency For Health Care Administration Status: Closed Recommended Order on Monday, June 30, 1997.

Summary: Petitioners failed to timely seek renewal of license which, once expired, may not be transferred to new owner.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MEDERI OF DADE COUNTY, INC., and )

HOME HEALTH LINK, INC., )

)

Petitioners, )

)

vs. ) Case Nos. 96-5179

) 96-5486

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on April 10, 1997, at Miami, Florida, before J. D. Parrish, a

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioners: Louise T. Jeroslow, Esquire

Zack, Sparber, Kosnitzky,

Spratt & Brooks, P.A.

100 Southeast Second Street, Suite 2800

Miami, Florida 33131

For Respondent: Jean Claude Dugue, Esquire

Agency for Health Care Administration

8355 Northwest 53rd Street, First Floor

Manchester Building

Miami, Florida 33166

STATEMENT OF THE ISSUES

Whether the Medicare-certified, home health agency license

held by Petitioner, Mederi of Dade County, Inc. (Mederi),

terminated such that it may not, as a matter of law, be

transferred to Petitioner, Home Health Link, Inc. (HHL), pursuant

to a request for change of ownership application.

PRELIMINARY STATEMENT

This matter began on August 28, 1996, when the Respondent,

the Agency for Health Care Administration (Department or Agency),

issued a letter to Petitioner which denied Mederi’s request to

reinstate its license #20689-95. Prior to its expiration,

Mederi’s license had authorized it to do business as a Medicare-

certified, home health agency. Because Mederi failed to timely

renew the license, the Department advised Petitioner that it

could not be reinstated. Thereafter, Mederi filed a petition for

formal administrative hearing challenging this decision. This

case, DOAH Case No. 96-5179, was forwarded to the Division of

Administrative Hearings for formal proceedings on November 4,

1996.

As to DOAH Case No. 96-5486, that matter began on

October 16, 1996, when the Agency advised HHL that its

application for licensure as a home health agency had been denied

because it had failed to submit information necessary to complete

the application process. The denial was based, in part, on the

Department’s consideration of the application as an initial

application (as opposed to a request for change of ownership

application). Since the home health agency’s license whose

license was to be transferred (Mederi) had expired, the

Department had reviewed the application as an initial

application. In this regard, HHL was required to provide a copy

of its certificate of need (CON) which it had failed to timely

produce.

HHL then filed a petition for formal administrative hearing

challenging the agency’s denial, asserting its claim for

licensure (and exemption from the CON requirement) through

Mederi, and maintaining that it satisfied all applicable

statutory and rule criteria for licensure as a Medicare-

certified, home health agency. This case was forwarded to the

Division of Administrative Hearings for formal proceedings on

November 18, 1996.

At the hearing, the cases were consolidated for the

presentation of evidence. The Petitioners presented testimony

from David Nesslein, the corporate secretary/treasurer for

Mederi; Lois Mill, the administrator for Mederi and proposed

administrator of HHL; John Jansak, an attorney employed by HHL;

and David Templeton, a health services and facility consultant

who is a team leader in processing licensure files for renewal,

initial licenses, and change of ownership applications for the

Department. Petitioners’ Exhibits 1 through 9 were received into

evidence. The Agency presented testimony from Molly McKinstry, a

former human services program specialist employed with the

Department’s long term care unit/health facility regulations

section, and David Templeton. Its Exhibits 1 through 5 were also

received.

The transcript of the proceeding was filed on May 1, 1997.

Thereafter the parties requested, and leave was granted, for them

to file their proposed recommended orders not later than June 2,

1997. Both parties timely filed proposed orders which have been

considered in the preparation of this recommended order.

FINDINGS OF FACT

1. The Department is the state authority charged with the

responsibility of regulating and licensing entities pursuant to

Chapter 400, Florida Statutes. Such entities include home health

care agencies.

2. Mederi was licensed, license #20689-95, as a home health

care agency and was Medicare certified. Mederi did not have a

CON but was nevertheless "grandfathered" under the law to

operate.

3. Mederi has provided services in Dade and Monroe Counties

since December of 1973. It offered a full range of skilled

nursing services as well as physical therapy, speech therapy,

home health aide services, occupational therapy, and medical

social workers. In 1994, Mederi generated approximately five

million dollars in revenue. As of the time of hearing, the

company was not operating.

4. HHL sought to obtain the license held by Mederi and

filed an application with the Agency to do so on or about May 10,

1996.

5. The license issued to Mederi in 1995 was valid through

April 30, 1996. The renewal for this license was due sixty days

prior to its expiration date.

6. In January or February 1996, the Department sent HHL a

letter together with a change of ownership application in order

for Petitioner to initiate the proposed license transaction with

Mederi. At that time HHL did not have a formal written agreement

with Mederi but had contacted the Department to ascertain whether

Mederi’s grandfathered status under the CON provisions could be

transferred to HHL. Such letter advised Mr. Jansak that the

application would be due sixty days prior to the effective date

of the change of ownership.

6. In response to the letter, the Department received the

application for change of ownership filed by HHL on May 10, 1996.

7. Typically, the Department sends a notice to a licensee

ninety days prior to the expiration of a license with an

application for renewal. In this case, the Department cannot

establish that such notice was provided; however, there is no

evidence that it was not issued. Historically, Mederi had timely

filed applications for license renewal.

8. On or about July 9, 1996, Ms. McKinstry sent Mederi a

letter notifying it that it had failed to renew its license.

9. Also on July 9, 1996, Ms. McKinstry sent HHL a letter

notifying it that the change of ownership could not be accepted

since Mederi’s license had expired. Instead, the Department

suggested that the application be reviewed and considered as an

initial application for licensure.

10. The renewal application for Mederi was due on or about

February 28, 1996. For every day thereafter in which the

application for renewal was not filed, Mederi could be subject to

a fine of $100.00 per day up to the amount of $5,000.00. In this

instance, Mederi did not file a renewal application within the

time allotted ( prior to its license expiration or May 1, 1996)

and no fine was imposed. The Department does not fine holders of

expired licenses.

11. HHL did not reply to Ms. McKinstry’s letter of July 9,

1996. On September 20, 1996, she sent a letter advising HHL that

the application would be considered an initial application and

requested additional documentation.

12. The Agency then sent a letter to HHL on October 16,

1996, denying the initial application for licensure as the

requested additional documentation had not been provided.

13. The Department ex pects licensed agencies to understand,

and comply with, applicable provisions of Florida law.

14. Because Mederi failed to timely seek renewal of its

license, the value of it as an asset has plummeted from

approximately $250,000 to nothing.

15. Under the agreement between Mederi and HHL, it was

Mederi’s responsibility to keep the license current.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to, and the subject matter of,

these proceedings.

17. Section 400.464, Florida Statutes , provides, in part:

(1) Any home health agency must be licensed

by the Agency for Health Care Administration

to operate in this state. A license issued

to a home health agency, unless sooner

suspended or revoked, expires 1 year after

its date of issuance. However, any home

health agency that is operated by the Federal

Government is exempt from this part.

* * *

(5)(a) It is unlawful for any person to

offer or advertise home health services to

the public unless he or she has a valid

license under this part. It is unlawful for

any holder of a license issued under this

part to advertise or indicate to the public

that it holds a home health agency license

other than the one it has been issued.

(b) A person who violates paragraph (a)

is subject to an injunctive proceeding under

s. 400.515. A violation of paragraph (a) is

a deceptive and unfair trade practice and

constitutes a violation of the Florida

Deceptive and Unfair Trade Practices Act.

(c) A person who violates paragraph (a)

commits a misdemeanor of the second degree,

punishable as provided in s. 775.082 or s.

775.083. Any person who commits a second or

subsequent violation commits a misdemeanor of

the first degree, punishable as provided in

s. 775.082 or s. 775.083.

Each day of continuing violation constitutes

a separate offense. (Emphasis added.)

18. Section 400.471, Florida Statutes , provides, in

pertinent part:

Application for license; fee; provisional

license; temporary permit.

(1) Applic ation for an initial license or

for renewal of an existing license must be

made under oath to the Agency for Health Care

Administration on forms furnished by it and

must be accompanied by the appropriate

license fee as provided in subsection (7).

The agency must take final action on an

initial licensure application within 60 days

after receipt of all required documentation.

* * *

(5) Sixty days before the expiration date,

an application for renewal must be submitted

to the Agency for Health Care Administration

under oath on forms furnished by it, and a

license must be renewed if the applicant has

met the requirements established under this

part and applicable rules. The home health

agency must file with the application

satisfactory proof that it is in compliance

with this part and applicable rules. The

home health agency must submit satisfactory

proof of its financial ability to comply with

the requirements of this part.

(6) When transferring the ownership of a

home health agency, the transferee must

submit an application for a license at least

60 days before the effective date of the

transfer. If the home health agency is being

leased, a copy of the lease agreement must be

filed with the application.

* * *

(10) The department shall not issue a

license designated as certified to a home

health agency which fails to receive a

certificate of need under the provisions of

ss. 408.031-408.045 . (Emphasis added.)

19. Rule 59A-8.0086, Florida Administrative Code, pr ovides,

in pertinent part:

Denial, Suspension, Revocation of License and

Imposition of Fines.

(1) The AHCA shall deny an initial or renewal

application for license, or impose a fine,

(a) if the applicant fails to submit all the

information required for an application

within time frames specified in Section

120.60, F.S.,

* * *

(e) if the applicant fails to comply with

other provisions of the statute, Chapter 400,

Part IV, F.S., or this rule.

(2) The AHCA shall suspend or revoke a

license or impose a fine,

* * *

(c) if the home health agency fails to comply

with the other provisions of this rule or

Home Health Services Act (Chapter 400, Part

IV, F.S.).

* * *

(4) Failure to file an application within the

time frames specified in this rule shall

result in an administrative fine in the

amount of $100 per day, each day constituting

a separate violation. In no event shall such

fines aggregate more than $5,000 . (Emphasis

added.)

20. The facts in t his matter are undisputed. The

Petitioner, Mederi, did not timely file a request to renew its

license. In fact, the license had expired before the application

to transfer it was filed by HHL. The Agency maintains that it

does not have the authority to breathe life back into the license

so that it can be transferred to the new applicant. Moreover,

Petitioners have not cited any legal authority for their

position. Instead, Petitioners argue that it would be

unreasonable to allow a property right valued by them at

$250,000.00 to lapse based upon the errors of not timely filing

their requests. In this regard Petitioners cite professional

licenses which, by law, allow licensees in an inactive status to

reactivate their licenses, however, the provisions of Chapter

400, Florida Statutes, do not contemplate an inactive status

which may be reactivated.

21. Regrettably, the Petitioners lost a valuable asset

through oversight. The Department does not have the authority to

renew a license which has expired. The Division of

Administrative Hearings does not have the authority to fashion an

equitable remedy to the issue presented by this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Agency for Health Care

Administration enter a final order denying Petitioners the

remedies sought.

DONE AND ENTERED this 30th day of June, 1997, in

Tallahassee, Leon County, Florida.

___________________________________

J. D. PARRISH

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 30th day of June, 1997.

COPIES FURNISHED:

Jean Claude Dugue, Esquire

Agency for Health Care Administration

8355 Northwest 53rd Street

Miami, Florida 33166

Louise T. Jeroslow, Esquire

Zack, Sparber, Kosnitzky,

Spratt & Brooks, P.A.

100 Southeast Second Street, Suite 2800

Miami, Florida 33131

Sam Power, Agency Clerk

Agency For Health Care Administration

2727 Mahan Drive, Suite 3431

Fort Knox Building III

Tallahassee, Florida 32308-5403

Jerome W. Hoffman, General Counsel

Agency For Health Care Administration

2727 Mahan Drive, Suite 3431

Fort Knox Building III

Tallahassee, Florida 32308-5403

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this recommended order. Any exceptions to

this recommended order should be filed with the agency that will

issue the final order in this case.