02-001909 Orchard Meadows Assisted Living Facility vs. Agency For Health Care Administration Status: Closed Recommended Order on Monday, September 16, 2002.

Summary: Assisted living facility must pay administrative fine, renewal fees, and applicable late fee at which time license should be renewed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ORCHARD MEADOWS ASSISTED )

LIVING FACILITY, )

)

Petitioner, )

)

vs. ) C ase Nos. 02 - 1909

)

AGENCY FOR HEALTH )

CARE ADMINISTRATION, )

)

Respondent. )

_______________________________)

RECOM MENDED ORDER

A hearing was held pursuant to notice on July 30, 2002, by

Barbara J. Staros, assigned Administrative Law Judge of the

Division of Administrative Hearings, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Christine T. Messana, Esq uire

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308 - 5403

For Respondent: Lee Dougherty, Esq uire

245 Washington Street

Monticello, Florida 32344

STATEMENT OF THE ISSUE

Whether Petitioner's license to operate an assisted living

facility should be renewed.

PRELIMINARY STATEMENT

On February 27, 2002, the Agency for Health Care

Administration (AHCA) issued a Notice of Intent to Deny, which

informed Petitioner that Petitioner's renewal application for an

assisted living facility license be denied. The denial was

based on Petitioner's failure to submit a completed renewal

license application within specified time frames pursuant to

Sections 400.414(1)(i) and 414.417, Florida Statutes.

Specifically, the notice alleged that Petitioner failed to

provide proof of liability insurance and failed to pay an

out standing fine in final order status.

Petitioner disputed the application renewal denial and

requested a formal administrative hearing. AHCA forwarded the

case to the Division of Administrative Hearings on or about

May 9, 2002. A hearing was scheduled for July 30, 2002, in

Tallahassee, Florida.

On July 17, 2002, AHCA filed a Motion for Order Closing

File. Oral argument was heard on the motion on July 25, 2002,

and the motion was denied.

At hearing, Petitioner presented the testimony of two

witnesses, Na thaniel Gallon and Eula Fogle. Petitioner's

Exhibit 1 was admitted into evidence. Respondent presented the

testimony of Greg Rice. Respondent's Exhibits 1 through 5 were

admitted into evidence. Official Recognition was taken of

Sections 400.408, 400.41 4, and 400.417, Florida Statutes.

A Transcript, consisting of one volume, was filed on

August 13, 2002. Respondent filed a Proposed Recommended Order

on September 3, 2002. Petitioner did not file any post - hearing

submission.

FINDINGS OF FACT

1. AHCA is the agency responsible for the licensing and

regulation of assisted living facilities in Florida pursuant to

Chapter 400, Florida Statutes.

2. Orchard Meadows is an assisted living facility (ALF)

which is owned by Nathaniel Gallon, and is located in

Monti cello, Florida.

Prior Case and Administrative Fine

3. In a prior case involving AHCA and Nathaniel Gallon,

d/b/a Orchard Meadows, AHCA issued a Final Order dated

September 27, 2001. The Final Order incorporated by reference a

Settlement Agreement entere d into between the parties, which

read in pertinent part:

6. The Respondent agrees to pay half of the

administrative fine imposed, in the amount

of seven thousand eight hundred seventy - five

($7,875) dollars, to be paid within sixty

(60) days of entry of t he Final Order

adopting this settlement stipulation

agreement.

7. The Respondent agrees to maintain the

facility in substantial compliance with all

applicable statutes and rules governing

assisted living facilities, as determined by

the Agency field offi ce manager, for a

period of one year from the entry of the

Final Order incorporating this settlement

stipulation agreement. In the event that

the conditions in paragraph 6 and 7 are not

met, the following consequences shall

result:

(a) the remaining sev en thousand eight

hundred seventy - five ($7,875) dollars

outstanding from the administrative fine

initially imposed by the Agency in the

amount of fifteen thousand seven hundred

fifty ($15,750) dollars, shall become due

immediately.

(b) the Agency shall consider Respondent

ineligible for renewal of licensure as an

assisted living facility based on the

demonstrated inability to comply with

requirements of continued licensure.

4. Eula Fogle is the Administrator of Orchard Meadows and

has been in t hat position since May of 2000. According to both

Mr. Gallon and Ms. Fogle, Orchard Meadows made efforts to

acquire the funds to pay the $7,875.00 administrative fine

referenced in paragraph 6 of the stipulation but acknowledge

that they were unable to do so within the 60 days following the

entry of the Final Order referenced above. However, a few days

after the 60 - day time period expired, they were able to acquire

the funds and Ms. Fogle personally took a check for $7,875.00 to

Mr. Rice at AHCA. AHCA di d not accept the check but referred

Ms. Fogle to the agency's lawyers. Ms. Fogle attempted to get

in touch with the appropriate agency lawyer(s) in an effort to

pay the fine but was unsuccessful in doing so.

License renewal

5. Orchard Meadows first recei ved a license to operate an

ALF by AHCA effective December 23, 1994. Orchard Meadows

renewed its license and was issued a conditional license from

December 23, 1996 through March 22, 1997. Orchard Meadows

received a standard license for the period March 23, 1997

through December 22, 1998.

6. On August 18, 1999, AHCA sent a letter to Orchard

Meadows enclosing a standard renewal license #AL8362 issued for

the period December 23, 1999 to December 22, 2002.

7. Greg Rice is a Government Operations Consul tant III in

the Assisted Living Licensing Office of AHCA. According to

Mr. Rice, ALF licenses are issued for two - year periods. Thus,

the license issued from December 23, 1999 until December 22,

2002, was issued in error.

8. On October 25, 1999, AHCA sen t another letter to

Orchard Meadows with a standard renewal license enclosed. The

letter stated that the enclosed license was being issued to

correct the dates of the one previously sent. The letter also

requested that Orchard Meadows return the license previously

issued. The renewal standard license #AL8362 was issued for the

period December 23, 1998 until December 22, 2000, which resulted

in a two - year licensure period beginning one year prior to the

first renewal license and ending two years earlier.

9. On July 31, 2000, AHCA sent a letter to Orchard Meadows

notifying Petitioner that the license to operate expired

December 22, 2000. The letter instructed Orchard Meadows to

complete an enclosed application and return it with the

appropriate fee 90 d ays before the expiration date. The letter

further stated that failure to file a renewal application within

that time frame will result in a late fee as allowed by law.

The return - receipt card was signed by Demetria Poe on August 2,

2000. Ms. Poe is a f ormer employee of Orchard Meadows and did

not testify at the hearing.

10. There is no evidence of any correspondence from AHCA

to Orchard Meadows regarding the license status between the

July 31, 2000 letter and a January 11, 2002 letter, a period of

appr oximately one and one - half years.

11. Despite the position by AHCA that the license expired

December 22, 2000, AHCA continued to come to the facility to

conduct surveys during the period of time in which AHCA contends

that Orchard Meadows was operating wi thout a license. According

to Ms. Fogle, AHCA's most recent survey of the facility was

conducted four to six months prior to the final hearing date.

12. Mr. Rice's explained why Orchard Meadows was permitted

to operate:

Q. And even though that renewa l was not

submitted, they were permitted to continue

to operate because they were in litigation;

is that correct?

A. Yes.

Q. Okay. And so, because they were in

litigation and because there was a

settlement that needed to be complied with,

is that the reason that there was no further

notice to the facility after the July 2000?

A. Yes.

13. On January 11, 2002, AHCA sent a letter to Eula Fogle,

Administrator of Orchard Meadows. The letter notified Ms. Fogle

that the license to operate Orchard M eadows expired on

December 22, 2000, and that no renewal application had been

filed nor had the license fee been paid. The letter instructed

Ms. Fogle to cease and desist operating Orchard Meadows.

14. Ms. Fogle was surprised to receive the January 11,

2 002 letter as the license with the 2002 expiration date was on

the wall of the office in Orchard Meadows. According to

Ms. Fogle, she was unaware of the July 31, 2000 letter signed

for by the former employee, Demetria Poe, or of the license with

the expir ation date of December 22, 2000, that was issued in

1999. It was her understanding that Orchard Meadows' license

was current until December 2002.

15. Orchard Meadows filed a renewal application in early

2002. The record is not clear as to the exact da te it was

filed. However, Mr. Rice established that it was filed sometime

subsequent to the January 11, 2002 letter from AHCA to Orchard

Meadows.

16. On February 27, 2002, AHCA issued the subject Notice

Of Intent to Deny Orchard Meadows' renewal of their ALF license,

which states as follows:

Dear Ms. Fogle:

It is the decision of this Agency that your

renewal application for an assisted living

facility (ALF) license be DENIED.

The Specific Basis for this determination

is:

The applicant's failure to su bmit a

completed renewal license application within

the specified time frames pursuant to

Section 400.414(1)(i), Florida Statutes

(F.S.), and Section 400.417, F.S.

Specifically, the applicant failed to

provide proof of liability insurance and

failed to pa y an outstanding fine in final

order status (AHCA Case No's: 02 - 00 - 063 - ALF,

02 - 00 - 004 - ALF, 02 - 00 - 016 - ALF and 02 - 00 - 053 -

ALF). The omitted information was requested

by the Agency in a certified letter dated

February 4, 2002, received by the applicant

on Feb ruary 6, 2002. The applicant failed

to submit the required information to the

Agency by February 25, 2002.

17. No proof was presented at hearing describing any

omissions request as referenced in the Notice of Intent to Deny.

18. Nonetheless, Orchard Meadows' current liability

insurance is with United National Insurance Company with an

effective date of March 27, 2002 until March 27, 2003.

CONCLUSIONS OF LAW

19. The Division of Administrative Hearings has

jurisdiction over the parties and subject mat ter in this case.

Sections 120.569 and 120.57, Florida Statutes.

20. Section 400.414, Florida Statutes, reads in pertinent

part as follows:

400.414 Denial, revocation, or suspension

of license; imposition of administrative

fine; grounds. --

(1) The agency may deny, revoke, or suspend

any license issued under this part, or

impose an administrative fine in the manner

provided in chapter 120, for any of the

following actions by an assisted living

facility, any person subject to level 2

background screening under s. 400.4174, or

any facility employee:

* * *

(i) Failure of the license applicant, the

licensee during relicensure, or a licensee

that holds a provisional license to meet the

minimum license requirements of this pa rt,

or related rules, at the time of the license

application or renewal.

* * *

Administrative proceedings challenging

agency action under this subsection shall be

reviewed on the basis of the facts and

conditions that resulted in the agency

action.

* * *

(3) The agency may deny a license to any

applicant . . . [which] has an outstanding

fine assessed under this chapter.

21. Section 400.417, Florida Statutes, reads in pertinent

part as follows:

400. 417 Expiration of license; conditional

license. --

(1) Biennial licenses, unless sooner

suspended or revoked, shall expire 2 years

from the date of issuance. Limited nursing,

extended congregate care, and limited mental

health licenses shall expire at th e same

time as the facility's standard license,

regardless of when issued. The agency shall

notify the facility by certified mail at

least 120 days prior to expiration that a

renewal license is necessary to continue

operation. Ninety days prior to the

ex piration date, an application for renewal

shall be submitted to the agency. Fees must

be prorated. The failure to file a timely

renewal application fee shall result in a

late fee charged in an amount equal to 50

percent of the current fee.

(3) . . . A license for the operation of a

facility shall not be renewed if the

licensee has any outstanding fines assessed

pursuant to this part which are in final

order status.

22. In its Proposed Recommended Order, AHCA also relies

upon Secti on 400.408, Florida Statutes, which states that it is

unlawful to own, operate, or maintain an assisted living

facility without obtaining a license under this part. Reliance

on this statute is misplaced. AHCA conducted surveys of the

facility after enter ing into a settlement agreement which

references Orchard Meadows' agreement to maintain the facility

in substantial compliance with all applicable statutes and rules

for one year, prior to issuing the January 11, 2002 letter.

During this time, AHCA assert s that it permitted the facility to

operate because it was in litigation, although the litigation

ended with the September 27, 2001 final order incorporating the

settlement stipulation. Under the circumstances, the Agency

cannot now contend that the facil ity operated inappropriately in

the interim. Most importantly, the Notice of Intent to Deny

does not charge Orchard Meadows with operating without a

license, and does not base the denial on Section 400.408,

Florida Statutes.

23. Section 400.414, F lorida Statutes, provides that

administrative proceedings challenging agency action under

Section 400.414(1), Florida Statutes, shall be reviewed on the

basis of the facts and conditions that resulted in the agency

action.

24. The evidence established tha t there was, at a minimum,

confusion as to the licensure status of Orchard Meadows during

the one and one - half years between the July 31, 2000 and

January 11, 2002 letters from AHCA to Orchard Meadows.

25. The Agency's argument that it is prohibited f rom

renewing the license pursuant to Section 400.417(3), Florida

Statutes, is unpersuasive. The license can be renewed if the

outstanding fine is paid. Orchard Meadows made a good faith

attempt to pay the full amount of the fine within a few days of

the required due date. It is unclear why the money was not

accepted late, given the fact that the closure of a facility was

at stake. Had that money been accepted, there would no longer

have been any outstanding fine. Again, it is not too late to

pay the fi ne. Orchard Meadows has provided evidence of current

liability insurance.

26. Pursuant to 400.417(1), Florida Statutes, the failure

to file a timely renewal application results in a late fee

charged to the facility in an amount equal to 50 percent of the

current fee. Accordingly, that is the appropriate penalty for

failure to timely file the renewal application.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law set forth herein, it is

RECOMMENDED:

That the Agency for Health Care Administration enter a

final order requiring Orchard Meadows to pay the $7,875.00 fine

and any renewal application fees, including any appropriate late

fees, within 30 days of the issuance of the final order.

Upon payment of the fine an d license fees, Orchard Meadows'

license should be renewed. If the fine and license fees are not

paid within 30 days of the final order, the renewal application

of Orchard Meadows should be denied and Orchard Meadows should

cease operations as a licensed assisted living facility.

DONE AND ENTERED this 16th day of September, 2002, in

Tallahassee, Leon County, Florida.

BARBARA J. STAROS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 16th day of September, 2002.

COPIES FURNISHED:

Christine T. Messana, Esquire

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308 - 5403

Lee Dougherty, Esquire

245 East Wash ington Street

Monticello, Florida 32344

Leland McCharen, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building 3, Suite 3431

Tallahassee, Florida 32308 - 5403

Valinda Clark Christian, Acting General Counsel

Agency for Health Care Administration

2727 Mahan Drive

Fort Knox Building 3, Suite 3431

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.