95-004367RP Florida Health Care Association, Inc. vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Tuesday, July 16, 1996.

Summary: Proposed rule 59A-4.128 is not invalid. Except for form AHCA 3110-6007 incorporated therein. The form is not connected to statutory requirements.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA HEALTH CARE )

ASSOCIATION, INC., et al., )

)

Petitioners, )

)

vs. ) CASE NOS. 95-4367RP

) 95-4372RP

AGENCY FOR HEALTH CARE ) 95-4655RX

ADMINISTRATION, )

)

Respondent. )

_____________________________)

FINAL ORDER

These consolidated cases were heard by David M. Maloney, Hearing Officer of

the Division of Administrative Hearings on February 8 and 9, 1996, in

Tallahassee, Florida.

APPEARANCES

Petitioner: Peter A. Lewis, Esquire

Goldsmith & Grout, P.A.

307 West Park Avenue

Tallahassee, Florida 32302-1017

Respondent: Richard M. Ellis, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Tallahassee, Florida 32308

STATEMENT OF THE ISSUES

Whether proposed Rule 59A-4.128, (including Form No. AHCA 3110-6007,

incorporated into the rule by reference,) which would govern the evaluation and

rating of Florida nursing homes, is an invalid exercise of delegated legislative

authority? Whether, contrary to Section 120.56, Florida Statutes, the Agency

for Health Care Administration has failed to promulgate in rule policies upon

which it has relied in evaluating and rating Florida nursing homes?

PRELIMINARY STATEMENT

On August 11, 1995, the Agency for Health Care Administration (the "Agency"

or, as it appears in quoted portions of the proposed rule, "AHCA") published in

the Florida Administrative Weekly proposed Rule 59A-4.128 (the "proposed rule.")

The proposed rule concerns evaluation and rating of nursing homes. On August

31, 1995, Florida Health Care Association (the "Association" or "petitioner,")

filed with the Division of Administrative Hearings a petition seeking a

determination pursuant to Section 120.54, Florida Statutes, that the proposed

rule is invalid. On September 1, 1995, Petitioner Central Park Lodges, Inc.,

d/b/a Central Park Village ("CPL") filed a separate petition also seeking a

determination that the proposed rule is invalid. The two proceedings were

assigned DOAH Case Nos. 95-4367RP and 95-4372RP, respectively.

Consolidated by order dated September 7, 1995, the two cases were noticed

for hearing to commence September 28, 1995. Upon the parties' joint motion, the

hearing was continued and reset for November 2, 1995.

In the meantime, the Association filed a petition titled, "Petition for the

Determination of the Invalidity of Existing Rule," which attached the proposed

rule as an exhibit. In essence, the petition, pursuant to Section 120.56,

Florida Statutes, (but not Section 120.535, Florida Statutes,) challenged non-

rule policies of the agency. The proceeding was assigned DOAH Case No. 95-

4655RX. On September 22, the Agency moved to dismiss the petition in this last

case and, by separate motion, moved for more definite statement. The motion to

dismiss was granted in part and the motion for more definite statement was

granted. An amended petition was filed, Central Park Lodges was allowed to

intervene, and the case was consolidated with the first two cases.

Over the Agency's objection, final hearing on the three cases was continued

to December 18. Upon the Association's motion, the case was continued again,

this time without objection, to February 8, 1996. In the meantime, the Agency

modified the proposed rule through a "Notice of Change," filed with the

Department of State.

The case eventually reached final hearing on February 8 and 9, 1996 with

the Association and the Agency participating as parties. (Central Park Lodges

did not appear.) At hearing, the Association called LuMarie Polivka-West,

Patricia Hall (an agency employee,) and Lyn Fletcher as witnesses and introduced

through deposition the testimony of Tom Logan and Bonnie Baxter. The Agency

presented the testimony of Ms. Hall. Petitioner's Exhibits Nos. 1 - 12 and

Respondent's Exhibits Nos. 1 - 8 were all admitted into evidence.

Proposed recommended orders were filed on April 12 and April 15, 1996, by

the respondent and the petitioner, respectively. Rulings on proposed findings

of fact are contained in Appendix "A" to this final order.

FINDINGS OF FACT

The Rule

1. The full text of the proposed rule, as changed by the Notice of Change

filed with the Department of State, is as follows:

59A-4.128 Evaluation of nursing homes and

rating system.

(1) The agency shall, at least every 15

months, evaluate and assign a rating to every

nursing home facility. The evaluation and

rating shall be based on the facility's comp-

liance with the requirements contained in

sections 59A-4.100 through 59A-4.128, of this

rule, Chapter 400, Part II and the require-

ments contained in the regulations adopted

under the Omnibus Budget Reconciliation Act

(OBRA) of 1987 (Pub. L. No. 100-203)

(December 22, 1987), Title IV (Medicare, Medi-

caid, and Other Health Related Programs), Sub-

title C (Nursing Home Reform), as amended and

incorporated by reference.

(2) The evaluation shall be based on the most

recent licensure survey report, investigations

conducted by AHCA and those persons authorized

to inspect nursing homes under Chapter 400,

Part II, Florida Statutes.

(3) The rating assigned to the nursing home

facility will be either conditional,

standard or superior. The rating is based on

the compliance with the standards contained

in this rule and the standards contained in

the OBRA regulations. Non-compliance will

be stated as deficiencies measured in terms

of severity. For rating purposes, the

following deficiencies are considered equal

in severity: Class I deficiencies; Class II

deficiencies; and those Substandard Quality

of Care deficiencies which constitute either

immediate jeopardy to resident health or

safety or a pattern of or widespread actual

harm that is not immediate jeopardy. Further

for rating purposes, the following defici-

encies are considered equal in severity:

Class III deficiencies; and those Substand-

ard Quality of Care deficiencies which con-

stitute a widespread potential for more than

minimal harm to resident health or safety,

but less than immediate jeopardy, with no

actual harm.

(a) Class I deficiencies are those with

either an imminent danger, a substantial

probability of death or serious physical

harm and require immediate correction.

Class II deficiencies are those deficiencies

that present an immediate threat to the

health, safety, or security of the residents

of the facility and the AHCA establishes a

fixed period of time for the elimination and

correction of the deficiency. Substandard

Quality of Care deficiencies are deficiencies

which constitute either: immediate jeopardy

to resident health or safety; a pattern of

or widespread actual harm that is not immedi-

ate jeopardy; or a widespread potential for

more than minimal harm, but less than immedi-

ate jeopardy, with no actual harm.

(b) Class III deficiencies are those which

present an indirect or potential relationship

to the health, safety, or security of the

nursing home facility residents, other than

Class I or Class II deficiencies.

(4) A conditional rating shall be assigned

to the facility:

(a) if at the time of relicensure survey,

the facility has one or more of the following

deficiencies: Class I; Class II; or Substan-

dard Quality of Care deficiencies which con-

stitute either immediate jeopardy to resident

health or safety or a pattern of or wide-

spread actual harm that is not immediate

jeopardy; or,

(b) if at the time of the relicensure

survey, the facility has Class III

deficiencies, or Substandard Quality of Care

deficiencies which constitute a widespread

potential for more than minimal harm to resi-

dent health or safety, but less than immedi-

ate jeopardy, with no actual harm and at the

time of the follow-up survey, such defici-

encies are not substantially corrected with-

in the time frame specified by the agency

and continue to exist, or,

(c) new class I or class II deficiencies

or Substandard Quality of Care deficiencies

which constitute either immediate jeopardy

to resident health or safety or a pattern

of or widespread actual harm that is not

immediate jeopardy are found at the time

of the follow- up survey.

(d) A facility receiving a conditional

rating at the time of the relicensure survey

shall be eligible for a standard rating if:

(i) all Class I deficiencies, Class II

deficiencies, and those Substandard Quality

of Care deficiencies which constitute either

immediate jeopardy to resident health or

safety or a pattern of or widespread actual

harm that is not immediate jeopardy are

corrected within the time frame established

by the AHCA and

(ii) All class III deficiencies and and

(sic) those Substandard Quality of Care

deficiencies which constitute a widespread

potential for more than minimal harm to

resident health or safety, but less than

immediate jeopardy, with no actual harm are

substantially corrected at the time of the

follow-up survey. A facility receiving a

conditional rating at the time of the relicen-

sure survey shall not be eligible for a

superior rating until the next relicensure

survey.

(5) A standard rating shall be assigned to

a facility, if at the time of the relicen-

sure survey, the facility has:

(a) No class I or class II deficiencies

and no Substandard Quality of care defici-

encies which constitute either immediate

jeopardy to resident health or safety or a

pattern of or widespread actual harm that

is not immediate jeopardy, and

(b) Corrects all class III deficiencies

and those Substandard Quality of Care

deficiencies which constitute a widespread

potential for more than minimal harm to

resident health or safety, but less than

immediate jeopardy, with no actual harm with-

in the time frame established by the AHCA.

(6) A superior rating shall be assigned to

a facility, if at the time of the relicen-

sure survey, the facility has received a

standard rating and meets criteria for a

superior rating through enhanced programs

and services as contained in (7) of this

section.

(7) In order to qualify for a superior

rating, the nursing facility must provide

initiatives or services which encompass the

following areas:

(a) Nursing services.

(b) Dietary or nutritional services.

(c) Physical environment.

(d) Housekeeping and maintenance.

(e) Restorative therapies and self help

activities.

(f) Social Services.

(g) Activities and recreational therapy.

In order to facilitate the development of

facility wide initiatives and promote

creativity, these areas may be grouped or

addressed individually. In establishing the

facility's qualification for a superior rating,

the AHCA survey team will use the Rating

Survey and Scoring Sheet, Form No AHCA 3110-

6007, June, 1995, incorporated by reference,

and may be obtained from the Agency for

Health Care Administration.

(8) Upon initial licensure, a licensee can

receive no higher than a standard license.

After six months of operation, the new

licensee may request that the agency evalu-

ate the facility to make a determination as

to the degree of compliance with minimum

requirements under Chapter 400, Part II,

F.S., and this rule to determine if the

facility can be assigned a higher rating.

(9) Nursing facilities will be surveyed on

this section of the rule beginning March 1,

1995.

Petitioner's Exhibit No. 3. The "specific authority" given for the rule by the

agency is Section 400.23, Florida Statutes. The rule implements Sections

400.12, 400.19 and 400.23, Florida Statutes.

The Parties

2. Florida Health Care Association, Inc., is a trade association. Its

members are Florida nursing homes and it represents the great majority of

nursing homes in the state.

3. The Agency for Health Care Administration is the licensing agency of

the State of Florida responsible for regulating nursing homes under Part II of

Chapter 400, Florida Statutes.

Florida Unique Among the 50 States

4. Federal regulations do not require the rating of nursing homes. As one

might expect, therefore, states typically do not rate nursing homes. In fact,

of the fifty states, Florida is the only state that rates nursing homes.

Statutory Requirement for Nursing Home Rules

5. Section 400.23, Florida Statutes, mandates the Agency, "in consultation

with the Department of Health and Rehabilitative Services and the Department of

Elderly Affairs, [to] adopt and enforce rules to implement," Part II of Chapter

400. Rules to be adopted by the Agency with regard to nursing homes "include

reasonable and fair criteria in relation to ... the care, treatment, and

maintenance of residents and measurement of the quality and adequacy thereof,

based on rules developed under [Chapter 400, Part II, Florida Statutes,] and

[OBRA,] the Omnibus Budget Reconciliation Act of 1987 (Pub. L. No. 100-203)

(December 22, 1987), Title IV (Medicare, Medicaid, and Other Health-Related

Programs), Subtitle C (Nursing Home Reform), as amended." (e.s.) Section

400.23, Florida Statutes.

The Statutory Framework for the Evaluation

and Rating of Florida Nursing Homes

6. The Agency is not mandated just to adopt rules for measuring the

quality and adequacy of the care, treatment and maintenance of nursing home

residents. The Agency is also mandated to evaluate and rate the state's nursing

homes. Section 400.23(8), F.S. Presumably, this rating process is intended to

promote improvement of nursing homes, to enhance quality and adequacy of care of

residents and to aid in selection of nursing homes by potential residents and

their families. In any event, the Agency is required, "at least every 15

months, [to] evaluate all nursing home facilities and make a determination as to

the degree of compliance by each licensee with the established rules ... as a

basis for assigning a rating to that facility." Id.

i. The various ratings

7. Taking into consideration the most recent inspection report and other

material deemed pertinent by statute, the Agency must assign one of three

ratings to a nursing home under evaluation: standard, conditional or superior.

8. A standard rating means,

that a facility has no class I or class II

deficiencies, has corrected all class III

deficiencies within the time established by

the agency, and is in substantial compliance

at the time of the survey with criteria

established under this part, with

[agency rules] ... , and, if applicable, with

rules adopted under [OBRA] ... as amended.

(e.s.) Section 400.23(8)(a), F.S.

9. A conditional rating means,

that a facility, due to the presence of one

or more class I or class II deficiencies, or

class III deficiencies not corrected within

the time established by the agency, is not

in substantial compliance at the time of the

survey with criteria established under this

part, [agency rules] ..., or, if applicable

with rules adopted under [OBRA] ... as

amended. ...

(e.s.) Section 400.23(8)(b), F.S.

10. A superior rating means that a facility meets the criteria for a

standard rating and exceeds those criteria through enhanced programs and

services in seven areas: 1. nursing service; 2. dietary or nutritional

services; 3. physical environment; 4. housekeeping and maintenance; 5.

restorative therapies and self-help activities; 6. social services; and, 7.

activities and recreational therapy, (the "seven statutory areas of

enhancement.") Section 400.23(8)(c), F.S. In order to achieve a superior

rating, a facility may group the seven areas of enhancement within single

programs or address each individually. If a facility chooses to group any

within a program or initiative, however, the facility will not qualify for a

superior rating "if fewer than three programs or initiatives are developed to

encompass the required areas." Section 400.23(8)(d), F.S.

ii. Rules with regard to Ratings.

11. The Agency is responsible for establishing the rules under which most

of the evaluation and rating process takes place. The Agency was charged with

establishing uniform procedures by January 1, 1994, for evaluating nursing homes

including the provision of criteria in the seven statutory areas of enhancement.

Section 400.23(8)(h), F.S. Under the proposed rules, the rating is tied to

classification of deficiencies, which must be "according to the nature of the

deficiency." Section 400.23(9), F.S.

OBRA Regulations and their Applicability

12. Compliance by a nursing home with OBRA regulation, if applicable, is

part of the evaluation of nursing homes and is one aspect used to determine

which rating, (conditional, standard or superior,) is to be given a nursing

home. Section 400.32(8)(a),(b) and (c), F.S.

13. Effective July 1, 1995, the U.S. Department of Health and Human

Services amended its rules regarding the survey, Medicare-certification and

enforcement of regulations for nursing homes. The new rules implemented certain

provisions of the federal Omnibus Budget Reconciliation Act of 1987 ("OBRA

'87,") as amended. Changes were thereby made in the process of surveying

skilled nursing facilities under Medicare and nursing facilities under Medicaid

and in the process for certifying that such facilities meet the federal

requirements for participation in Medicare and Medicaid programs.

14. The agency considers federal OBRA regulations in place after the

amendments made under OBRA 87 to be applicable, including those adopted with an

effective date of July 1, 1995. No evidence was introduced in this proceeding to

contradict the agency's opinion that OBRA regulations are applicable to Florida

nursing home ratings and evaluations.

15. The OBRA regulations effective in July of 1995 include a "matrix" made

up of twelve boxes. The matrix, to be referred to in determining whether a

nursing home is in "substantial compliance" with federal regulations and whether

a deficiency constitutes "substandard quality of care," or not, was published by

the federal Health Care Financing Administration in the Department of Health and

Human Services as a pamphlet entitled "Public Reference Guide." The pamphlet

states as part of its "Background" section, "[t]his regulation becomes effective

on July 1, 1995.

16. The matrix (see Appendix "B", a copy of the matrix admitted into

evidence as Petitioner's Exhibit No. 1) contains four levels of severity of

federal deficiencies in bands stacked horizontally one on top of the other,

described in descending order to the left of the matrix: "Immediate Jeopardy to

Resident Health or Safety"; "Actual Harm that is not Immediate Jeopardy",; "No

Actual Harm with Potential for More than Minimal Harm that is not Immediate

Jeopardy"; and, "No Actual Harm with Potential for More than Minimal Harm". The

matrix is divided into three columns at its base describing the scope of the

deficiency in ascending order from left to right: "Isolated," "Pattern," and

"Widespread." The intersections of the four bands of severity and the three

columns of scope produce the twelve boxes. The boxes are labeled "A" through

"L." The A box, the least intense in severity, is denominated "No Actual Harm

with Potential for Minimal Harm" and is the most confined in scope, that is,

"Isolated." The antipode of the "A" box is the "L" box, where severity is most

intense, denominated "Immediate Jeopardy to Resident Health and Safety," and

scope is the broadest, that is, "Widespread."

17. The pamphlet is coded to indicate deficiencies which do not defeat

substantial compliance. These are all the deficiencies which fall into the A, B

and C boxes; that is, the least severe deficiencies no matter what their scope.

Deficiencies falling into the remainder of the boxes indicate a facility's

failure to achieve substantial compliance.

18. The pamphlet is also coded to indicate deficiencies which constitute

substandard quality of care. These are all of the categories of most severe

deficiencies, ("Immediate Jeopardy to Resident Health or Safety"), that is, the

J, K and L boxes; the two of the next most severe category of deficiencies,

("Actual Harm that is not Immediate Jeopardy") that are broadest in scope,

("Pattern" and "Widespread"), that is, the H and I boxes; the broadest in scope

("Widespread") of the third level in descending order of categories of severity,

("No Actual Harm with Potential for More than Minimal Harm that is not Immediate

Jeopardy,") that is, the F box; and none of the least severe category of

deficiencies. Left as not indicating substandard quality of care are

deficiencies which fall into Boxes A through E and Box G.

19. One would be disappointed if holding the expectation that deficiencies

which would indicate a facility culpable of substandard of care would be divided

somewhere neatly in the progression from the A box to the L box so that every

box lettered higher in the alphabet and above this division would contain

deficiencies constituting substandard care and every box below this line and

lower in the alphabet would contain deficiencies not constituting substandard

care. This is because the expectation fails with the F and G boxes. Every box

higher than G, (H through L) contain categories of deficiencies constituting

substandard of care and every box lower than F, (A through E,) contain

categories free of substandard of care. But there is a reversal when it comes

to the F and G boxes. The G box, with the next to the most intense severity,

("Actual Harm that is not Immediate Jeopardy") and the narrowest scope,

("Isolated,") does not contain deficiencies constituting substandard quality of

care. In contrast, deficiencies which fall into the F box, a box with lower

severity than the G box, that is, the next to the least intense severity, ("No

Actual Harm with Potential for More than Minimal Harm that is not Immediate

Jeopardy,") do indicate substandard quality of care because the scope of the F

box is the greatest, that is, "widespread."

20. The code "key," which appears in the federal pamphlet and is part of

the federal regulation, appears just below the matrix on the pamphlet. With

regard to any box coded as "substandard quality of care," the key contains the

following stipulation:

Substandard quality of care: any deficiency

in s. 483.13, Resident Behavior and facility

Practices, s. 483.15 Quality of Life, or in

S. 483.25, Quality of Care that constitutes:

[deficiencies that fall in the F box, or

boxes H through L.]

Respondent's Exhibit No. 2.

The Challenge to the Proposed Rule

21. The Association's challenge to the proposed rule has two parts: the

first is to the text of the rule; the second, to Form No. AHCA 3110-6007, a

"superior rating" form incorporated into the rule by reference.

A. The Text

i. Omission of Federal Limitations

22. The proposed rule contains definitions of Class I, II and III

deficiencies as well as definitions of "substandard quality of care"

deficiencies. The definitions of the Class I, II and III deficiencies come

directly from Section 400.23 of the Florida Statutes. In contrast, the

definition of "substandard quality of care" deficiencies, while established by

regulations adopted under the Omnibus Reconciliation Act (OBRA) of 1987 (Pub. L.

No. 100-203), as discussed above, are not the same in the proposed rule as in

the federal regulations. This is because the federal regulations limit the

definition in ways the proposed rule does not.

23. The federal regulations furnish the following definition:

Substandard Quality of Care means one or more

deficiencies related to participation require-

ments under [s.] 483.13, Resident behavior and

facility practices, [s.] 483.15, Quality of

life, or [s.] 483.25, Quality of care of this

chapter, which constitute either immediate

jeopardy to resident health or safety; a

pattern of or widespread actual harm that is

not immediate jeopardy; or a widespread

potential for more than minimal harm, but

less than immediate jeopardy, with no actual

harm.

42 CFR 488.301. This provision of OBRA regulation limits the definition of

"substandard quality of care," to deficiencies related to participation

requirements under three sections of Chapter 42 in the Code of Federal

Regulations: s. 483.13, governing resident behavior and facility practices; s.

483.15, governing quality of life; and s. 483.25, governing quality of care.

24. The proposed rule, by comparison, defines "Substandard Quality of

Care" deficiencies as those which constitute either: "immediate jeopardy to

resident health or safety; a pattern of or widespread actual harm that is not

immediate jeopardy; or a widespread potential for more than minimal harm, but

less than immediate jeopardy, with no actual harm." Petitioner's Ex. No. 3, p.

3. Unlike the federal regulations, the proposed rule does not limit the

definition to deficiencies related to participation requirements under the three

sections enumerated in the section defining "substandard quality of care," 42

CFR 488.301.

25. It was the agency's intent that the proposed rule follow the

definition of the federal regulations precisely. Nonetheless, the agency omitted

from the proposed rule the limitations present in the federal regulations. The

omission was attributed by the agency to oversight on its part. In the view of

the agency, the absence in the proposed rule of the federal regulations'

limitations makes the proposed rule "incomplete." (Tr. 339.)

ii. Lack of Definitions in OBRA Regulations

26. The OBRA regulations do not define the terms used to describe scope:

"isolated," "pattern," or "widespread." Neither do the statute or the proposed

rule.

27. With regard to severity, the term "immediate jeopardy" is defined in

the OBRA regulations, but the terms "actual harm" and "minimal harm" are not

defined. The terms "actual harm" and "minimal harm" are not defined by statute

or the proposed rule.

28. The lack of definitions creates a problem among surveyors. Left to

themselves, surveyors define the terms differently. Differences as to

definitions are found even among surveyors on the same agency survey team.

iii. Superior Rating with Substandard Quality of Care

29. Deficiencies assigned the next to the lowest severity but the broadest

scope, that is, those that fall into the F box, are considered substandard

quality of care under the OBRA regulations and the proposed rule. Nonetheless,

these deficiencies are equated with Class III deficiencies. A facility found to

have rendered substandard quality of care equated with a Class III deficiency,

therefore, is eligible still to receive a superior rating provided the

deficiencies are corrected in a timely fashion.

30. At present, under current law without the proposed rule being

effective, it is possible for the most severe OBRA deficiencies to be classified

by the state as Class I, II or III deficiencies. The proposed rule would change

that so that the most severe OBRA deficiencies would not be classified as Class

III deficiencies.

31. Aside from any requirement of the statute, the agency's rationale for

using the OBRA regulations with regard to substandard quality of care was to

ensure that facilities which are found to be providing substandard quality of

care not receive a superior rating.

B. The Superior Rating Form

32. The Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007, (the

"Superior Rating Form) used by agency surveyors since March 1, 1995, opens with

a section of instructions to the agency's surveyors to be used in making the

determination as to whether a nursing home should be rated "superior."

33. In observance of the statute, the instructions caution the surveyors

that a superior rating survey is to be conducted only on facilities which have

achieved "a standard rating at the time of the relicensure survey." The

instructions go on to state:

Florida law provides that a superior rating

may only be awarded to a facility that

exceeds the criteria for a standard rating

in the following areas:

1. Nursing services.

2. Dietary or nutritional services.

3. Physical environment.

4. Housekeeping and maintenance.

5. Restorative therapies and self help

activities.

6. Social services.

7. Activities and recreational therapy.

Petitioner's Ex. No. 6.

34. The instructions then state, "[a] facility will be deemed to have met

the statutory requirements if it attains the score necessary for a superior

rating under this survey instrument." Id.

35. After further instructions, the form is divided into six sections,

four of which are to be completed by the surveyor and two of which are to be

completed by the facility.

36. The two to be completed by the facility are titled, "Consumer

Satisfaction Survey," and "Staffing Characteristics." Id.

37. The remaining four (those to be completed by the surveyors) call for

descriptions of: 1. the resident population; 2. any quality improvement

programs; 3. training not required by regulation to staff; and, 4. types of

adjunct or specialty positions consistently used to provide improved resident

care.

i. Scored Sections

38. Of the six sections to be filled out by the surveyor or the facility,

four are scored to determine whether a superior rating should be assigned. The

four are "quality improvement," "training," "resident care," and "staffing

characteristics." Each demands a minimum number of points in order for the

facility to receive a superior rating. "Quality improvement" demands 14 points,

"training" 5, "resident care" 16, and "staffing characteristics" 12.

ii. Staffing Characteristics

39. As to "staffing characteristics," the section of the form awards

points for the years of experience of various key personnel at the facility.

Points are also awarded for the number of years those individuals who occupy key

staff positions have been employed by the facility. Points are awarded neither

on the basis of ability of staff nor for adequate performance.

40. The staffing section is the one scored section completed by the

facility rather than the surveyors. After completion, the information filled in

by the facility is not reviewed by the agency.

41. While common sense advances a nexus between longevity of service and

quality of service, no hard data was presented that longevity of service of key

staff members plays a role in a facility's ability to provide superior service.

42. Furthermore, the form provides for points to be assigned for the

credentials of the staff members but neither the form nor the rule identify

which credentials should yield points. The agency has such a list of credentials

but neither the form nor the rule makes reference to the list.

43. Agency surveyors do not confirm or question the information the

facility provides in the "staffing characteristics" section of the form.

iii. The other scored sections

44. With regard to the other three scored sections of the form, most of

the information and scoring relate to the seven areas of enhanced programs and

services the statute lists as necessary to qualify for a superior rating. For

example, under Section III., the "Quality Improvement" section, points are

awarded for active involvement in the quality improvement program of the

following department/disciplines: nursing, rehabilitative services, dietary,

housekeeping, maintenance, activities, social services and

administration/medical staff. These department/disciplines all relate to at

least one of the seven statutory areas of disciplines. Involvement of the

nursing staff in a quality improvement program, for example, clearly relates to

enhanced services in the area of "nursing services." Likewise, the same may be

said for involvement of housekeeping and maintenance in the quality improvement

program vis-a-vis the statutory area of housekeeping and maintenance.

45. Other areas of scoring, however, do not relate as directly to one of

the seven statutory areas of enhancement. Under Section III., "Quality

Improvement," for example, 2 points are awarded under the heading

"Implementation plans," for each of "resolve problems identified thorough

monitoring aspects of care," "resolve problems identified by consumers," and

"resolve problems identified by staff and management." With regard to the

resolution of problems identified by staff and management, there is nothing to

connect the problems to the seven areas of enhancement. For instance, a staff

member could identify a personal problem with a supervisor, the resolution of

which would have no impact on enhancement in any of the seven statutory areas.

46. This shortcoming of the Superior Rating Form, (lack of nexus, with

regard to achievement of points, between scored information and the seven areas

of enhancement, appears throughout the scored sections.) In sum, it is

difficult to know for certain that when points are awarded in every instance

there will be a relationship with one of the seven statutory areas of

enhancement.

47. At the same time, at least one of the areas of enhancement appears to

be shortchanged in the form. The only place "physical environment" enhancement

is awarded points is under Section V., "Resident Care," and then only when "the

facility has enhanced the physical environment to meet the extraordinary needs

of special population residents." Id., p. 7. Yet, the listing of "physical

environment," in the statute as one of the seven areas of enhancement does not

limit the applicability of the area to any segment of the resident population.

"Physical environment," is an area of enhancement applicable without limitation

to the entire resident population of a nursing home.

48. Nor does there appear to be much in the Superior Rating Form that

relates directly to the statutory area of enhancement, "Restorative therapies

and self-help activities."

49. The difficulty in relating the scored categories of the form to the

seven statutory areas of enhancement sets up the possibility for a nursing home

to receive a superior rating when it does not deserve one because it does not

exceed the criteria for a standard rating through enhanced programs and services

in all seven areas.

50. The form also requires a minimum of 14, 5, 16 and 12 points in the

form's scoring categories of "Quality Improvement," "Training," "Resident Care,"

and "Staffing Characteristics," respectively. These minimums set up the

possibility that a nursing home deserves a superior rating and yet will not

receive one because, although it has enhanced programs and services in all seven

areas, it may still not receive enough points as required by the form. This is

true particularly if it does not receive the minimum number of points, (twelve,)

under "staffing characteristics." In such a case, a facility could have

enhancements in all seven areas, yet be defeated because of key personnel not

having been in the facility's employ long enough.

AHCA Use of an Unpromulgated Rule

51. With the exception of the agency's use of the Superior Rating Form,

there was no evidence offered at hearing that AHCA is using an unpromulgated

rule to evaluate and rate nursing homes.

CONCLUSIONS OF LAW

52. The Division of Administrative Hearings has jurisdiction of these

three consolidated cases pursuant to Sections 120.54 and 120.56, Florida

Statutes.

53. The Association has standing to bring these three cases.

54. The burden of proof is upon the Association to show by a preponderance

of the evidence that the proposed rule is an invalid exercise of legislative

authority. Agrico Chemical Co. v. Department of Environmental Regulation, 365

So.2d 759, 762 (Fla. 1st DCA 1978).

Challenge to the Rule's Text

55. The Association advances an elaborate argument founded on a number of

grounds as to why the proposed rule is invalid. First, the Association sees the

rule as an invalid exercise of delegated authority because in opposition to the

federal OBRA regulations it fails to limit deficiencies constituting

"substandard quality of care" to deficiencies falling under the three sections

of the Code of Federal Regulations, ss. 483.143, 483.15 and 483.25.

56. At first blush, the argument appears to be sound. The agency admitted

the rule's failure to follow the OBRA regulations definition of "substandard

quality of care" was an oversight and left the rule incomplete. The Agency,

however, responds that the argument fails to account for the applicability of

the OBRA regulations in the evaluation and rating process set up by the rules.

Because the OBRA regulations are applicable, the agency argument continues, any

limitations in the regulations themselves must be followed by the Agency in the

evaluation and rating process.

57. Indeed, the federal matrix in the pamphlet, "Pocket Reference Guide,"

(an OBRA regulation, itself, with an effective date of July 1, 1995,) used by

agency surveyors and the agency, limits the deficiencies as does the definition

of "substandard quality of care" elsewhere in the OBRA regulations.

58. Moreover, the proposed rule, itself, opens with the statement that the

agency's evaluation and rating of nursing homes is to be based not only on

compliance with the requirements of applicable rules in Chapter 59A, Florida

Administrative Code, and Part II of Chapter 400, Florida Statutes, but also:

the requirements contained in the regulations

adopted under the Omnibus Budget Reconcilia-

tion Act (OBRA) of 1987 (pub. L. No. 100-203)

(December 22, 1987), Title IV (Medicare, Medi-

caid, and Other Health Related Programs), Sub-

title C (Nursing Home Reform), as amended and

incorporated by reference.

Proposed Rule 59A-4.128(1), as proposed by the Agency for Health Administration.

59. This statement flows directly from the statute that the rule intends

to implement, Section 400.23. In subsection (2)(f) of the statute to be

implemented, the agency is charged with adoption of rules which are to include

criteria in relation to the measurement of the quality and adequacy of the care,

treatment and maintenance of residents based on not only rules developed under

Florida law but also rules under OBRA. And, most pertinently, in subsection (8)

of the statute to be implemented, all of the ratings are dependent upon rules

under OBRA, if applicable.

60. At best, the Association has demonstrated a conflict in the proposed

rule. On the one hand, the rule refers to substandard quality of care without

limitation, but on the other, the rule bases the evaluation and rating process

on compliance with OBRA regulations as well as state law. The OBRA regulations'

incorporation into the proposed rule prevails over the Agency's unintentional

failure to include the federal regulation's limitations when it used the term

"substandard quality of care." Neither the agency nor its surveyors will be

misled by the oversight. Anyone claiming any benefit from the rules' omission

when using the term "substandard quality of care," will have to bend to the

proposed rule's unequivocal incorporation of the OBRA regulations.

61. It would be prudent for the Agency to change the proposed rule to

correct the omission of the federal regulations limitations, but the oversight,

once viewed in the light of the clear, express intent that the OBRA regulations

govern the evaluation and rating process, does not render the rule invalid.

62. The Association advances a number of other arguments in support of a

determination of invalidity. It sees the proposed rule as invalid because it:

one, illogically uses the OBRA enforcement regulations as a basis for

determining a nursing home's rating; two, is arbitrary and capricious because

use of the OBRA regulations requires the utilization of a system that employs

vague and ambiguous terms in its application; three, is illogical because,

through linkage with the federal regulations, it does not accomplish its stated

purpose of preventing facilities with substandard quality of care deficiencies

from obtaining a superior rating; and, four, is arbitrary and capricious because

it uses terms borrowed from the OBRA regulations which are not defined, thereby

vesting unbridled discretion in the agency.

63. Each of the these arguments is based on the incorporation of the

federal regulations into the proposed rule's evaluation and rating process.

That incorporation cannot be deemed illogical, arbitrary or capricious or in any

other manner "action which goes beyond the powers, functions and duties

delegated by the legislature," Section 120.52(8), Florida Statutes, because it

is the legislature which has demanded inclusion of the federal regulations in

the proposed rule. It has done this indirectly in Section 400.23(2)(f), Florida

Statutes, and directly in Section 400.23(8), Florida Statutes, in which all of

the ratings are dependent upon compliance or non-compliance with OBRA

regulations.

64. While the Agency may have set out to ensure that no facility with a

deficiency which indicates substandard quality of care ever receives a superior

rating, the statute sets no such goal. Deficiencies that fall into the F box in

the federal matrix constitute substandard quality of care but because of the

level of severity of "F box" deficiencies, that is, the next to the least

severe, "No actual harm with potential for more than minimal harm that is not

immediate jeopardy," it is not illogical to equate these deficiencies with Class

III deficiencies, the timely correction of which will not defeat a superior

rating. In this regard, it is worth considering that such a deficiency will not

prevent a facility from obtaining a standard rating if corrected in time. It is

reasonable to allow a deficiency of such relatively low severity to not stand in

the way of a standard rating if corrected in a timely fashion. The only

difference between a standard and superior rating is enhanced programs in the

seven areas. That difference is created by the legislature in Section

400.23(8)(c), Florida Statutes.

65. At bottom, the Association's quarrels with the rule all stem from the

OBRA regulations. The OBRA regulations are involved because the legislature has

declared that they should be. There is nothing in this proceeding that can be

done about vagueness in the OBRA regulations if it, indeed exists, or any other

illogic, arbitrariness or caprice if created by the federal regulations. Nor is

there anything that can be done in this proceeding about the legislature's

declaration in statute that OBRA regulations are to be utilized by the agency in

the evaluation and rating of nursing homes.

The Superior Rating Form

66. The Association makes its case with regard to the form. While the

argument can be made that the information from the form is connected in part, at

least, to the seven statutory areas of enhancement, it is difficult to tie much

of the information to the seven areas of enhancement. It diminishes the

importance of some of the areas of enhancement and it introduces considerations,

such as in the staffing characteristics section, which could easily be unrelated

to the seven statutory areas of enhancement.

67. Worst of all, the form sets up the possibility that nursing homes

deserving of superior ratings will not receive them and those not deserving

superior ratings will receive them. This obviously makes the form illogical and

capricious.

68. The Proposed Superior Rating Form is an invalid exercise of delegated

legislative authority.

Case No. 95-4655RX

69. Since the Association failed to prove reliance on non- rule policies,

(with the exception of use of the form, determined herein to be an invalid

exercise of delegated legislative authority), the case is dismissed.

ORDER

Based on the foregoing, it is, hereby,

ORDERED that:

1. Proposed Rule 59A-4.128, with the exception of its incorporation of the

Rating Survey and Scoring Sheet, Form No. AHCA 3110-6007, is not determined to

be invalid pursuant to Section 120.54, Florida Statutes;

2. The incorporation of the Rating Survey and Scoring Sheet, Form No. AHCA

3110-6007 in Proposed Rule 59A-4.128 and the form itself are determined pursuant

to Section 120.54, Florida Statutes, to be invalid exercises of delegated

legislative authority.

3. Case No. 95-4655RX is dismissed.

DONE AND ORDERED this 16th day of July, 1996, in Tallahassee, Leon County,

Florida.

___________________________________

DAVID M. MALONEY, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of July, 1996.

APPENDIX A

Petitioner's Proposed Final Order

1. Paragraphs 1 - 7, 9 - 24, 27, 37 - 56 of petitioner's proposed final

order are adopted, in substance, insofar as material.

2. Paragraphs 8 and 25 of petitioner's proposed final order are rejected

insofar as they claim the statute allows a superior rating to be assigned a

facility which has enhanced programs in only three of the seven statutory areas

of enhancement. The statute requires enhancement in all seven areas. It simply

allows one program or initiative to cover more than one area of enhancement and

a facility to still qualify for a superior rating so long as no less than three

programs or initiatives cover all seven areas.

3. Paragraph 26 of petitioner's proposed final order is subordinate.

While it is true that none of the four scored parts of the form are listed as

any one of the individual seven statutory areas of enhancement, the four parts,

nonetheless relate to the seven areas of enhancement and each part includes at

least some of the seven areas of enhancement.

4. Paragraphs 28 - 31 of petitioner's proposed final order are irrelevant.

5. Paragraphs 32 - 36 of petitioner's proposed final order are

subordinate.

Respondent's Proposed Final Order

1. Paragraph 1 of the respondent's proposed final order is adopted with

the recognition that the third sentence is a conclusion of law.

2. Paragraphs 2 - 5, 7 - 10, 12 - 15, 18 - 38 are adopted in substance,

insofar as material.

3. Paragraphs 6 and 39 of the respondent's proposed final order are ruled

irrelevant.

4. Paragraph 11 of the respondent's proposed final order is adopted with

the exception of the last sentence which is a conclusion of law.

5. Paragraphs 16 and 17 of the respondent's proposed final order are

subordinate.

6. Paragraphs 40 - 48 of the respondent's proposed final order under the

heading "Findings of Fact Specific to Case No. 95- 4655RX" are irrelevant since

no evidence was produced in the proceeding that any unpromulgated rule, other

than the Superior Rating Form determined in this order to be invalid, was relied

on by the Agency.

APPENDIX B

REMEDY SCALE BASED ON SCOPE AND SEVERITY

==============='////////////////'////////////////'///////////////

4 Immediate ' POC 10(J) ' POC 11(K) ' POC 12(L)

Jeopardy to 'REQUIRED: CAT.3 'REQUIRED: CAT.3 'REQUIRED: CAT.3

Resident 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1 'OPTIONAL: CAT.2

Health or 'OPTIONAL: CAT.1 'OPTIONAL: CAT.2 'OPTIONAL: CAT.1

Safety ' ' '

==============='================'////////////////'///////////////

3 Actual Harm ' POC 7(G) ' POC 8(H) ' POC 9(1)

is not 'REQUIRED: CAT.2 'REQUIRED*:CAT.2 'REQUIRED*:CAT.2

Immediate 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1 'OPTIONAL: CAT.1

Jeopardy ' ' '

==============='================'================'///////////////

2 No Actual ' POC 4(D) ' POC 5(E) ' POC 6(F)

Harm with 'REQUIRED*:CAT.1 'REQUIRED*:CAT.1 'REQUIRED*:CAT.2

more than 'OPTIONAL: CAT.2 'OPTIONAL: CAT.2 'OPTIONAL: CAT.1

Minimal Harm ' ' '

that is not ' ' '

Immediate ' ' '

Jeopardy ' ' '

________________________________'________________'_______________

1 No Actual ' 1(A) ' 2(B) ' 3(C)

Harm with 'COMMIT TO ' '

Potential for' CORRECT (POC) ' POC ' POC

Minimal Harm 'NO REMEDIES ' (NO REMEDIES) ' (NO REMEDIES)

'NOT ON HCFA 2567' '

_________________________________________________________________

ISOLATED PATTERN WIDESPREAD

/// Substandard qualify of care any deficiency in 483.13 (F221-F225) Resident

Behavior and Facility Practices. 483.15(F240-F258) Quality of Life or in 483.25

(F309-F333) Quality of Care that constitutes immediate jeopardy to resident

health or safety; or a pattern of or widespread actual harm that is not

immediate jeopardy; or, a widespread potential for more than minimal harm that

is not immediate jeopardy with no actual hear.

=== Substantial compliance

Remedy Categories

Category 1 (Cat. 1) Category 2 (Cat. 2) (Category 3 (Cat 3)

Directed Plan of Denial of Payment Temporary Management

Correction State for New Admissions; Termination

Monitor; and/or Denial of Payment Options: Civil Money

Directed In-service for All Individuals. Penalties: $3,050-

Training Imposed by HCFA; and $10,000 per day

/or Civil Money

Penalties: $50-

$3,000 per day

* Denial of Payment for New Admissions must be imposed when a facility is not in

substantial compliance within 3 months after being found out of compliance.

Denial of Payment and State Monitoring must be imposed when a facility has

been found to have provided substandard quality of care on three consecutive

standard surveys.

COPIES FURNISHED:

Richard M. Ellis, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Tallahassee, Florida 32308

Peter A. Lewis, Esquire

Goldsmith & Grout, P.A.

307 West Park Avenue

Tallahassee, Florida 32301

Jerome W. Hoffman, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Building 3

Tallahassee, Florida 32308

Carroll Webb, Executive Director

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32302

Liz Cloud, Chief

Bureau of Administrative Code

The Elliott Building

Tallahassee, Florida 32399

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial

review pursuant to Section 120.68, Florida Statutes. Review proceedings are

governed by the Florida Rules Of Appellate Procedure. Such proceedings are

commenced by filing one copy of a notice of appeal with the Agency Clerk Of The

Division Of Administrative Hearings and a second copy, accompanied by filing

fees prescribed by law, with the District Court Of Appeal, First District, or

with the District Court Of Appeal in the appellate district where the party

resides. The notice of appeal must be filed within 30 days of rendition of the

order to be reviewed.