59C-1.021: Certificate of Need Penalties
PURPOSE AND EFFECT: The agency is proposing to amend the rule that outlines assessment of administrative fines for noncompliance with conditions placed on a Certificate of Need (CON) and Certificate of Need Exemption. The amendment adds a formula to be used in calculating the dollar amount of the fine for indigent care.
SUBJECT AREA TO BE ADDRESSED: Revisions to the rule that addresses assessment of administrative fines for failure to comply with conditions placed on a Certificate of Need (CON) and Certificate of Need Exemption.
SPECIFIC AUTHORITY: 408.034(6), 408.15(8) FS.
LAW IMPLEMENTED: 408.040(1)(b) , (1)(d), (2)(a) , 408.061(6) , 408.08(2) , 408.044 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
TIME AND DATE: Tuesday, October 17, 2006, 2:30 p.m.
PLACE: Agency for Health Care Administration, Building 3, Conference Room C, 2727 Mahan Drive, Tallahassee, Florida.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Karen Weaver Webb, Certificate of Need, 2727 Mahan Drive, Building 1, Mail Stop 28, Tallahassee, Florida 32308, (850)922-7753.
THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:
59C-1.021 Certificate of Need Penalties
(1) through (2) No change.
(3) Penalties for Failure to Comply with Certificate of Need or Certificate of Need Exemption Conditions. The agency shall review the annual compliance report submitted by the health care providers who are licensed and operate the facilities or services and other pertinent data to assess compliance with certificate of need or certificate of need exemption conditions. Providers who are not in compliance with certificate of need or certificate of need exemption conditions shall be fined pursuant to paragraph 408.040(1)(e), Florida Statutes. Failure to report compliance with any condition upon which the issuance of the certificate of need or certificate of need exemption was predicated constitutes noncompliance. For community nursing homes or hospital-based skilled nursing units certified as such by Medicare, the first compliance report on the status of conditions must be submitted 30 calendar days following the eighteenth month of operation or the first month where an 85 percent occupancy is achieved, whichever comes first. The schedule of fines is as follows:
(a) Facilities failing to comply with any conditions or failing to provide the certificate of need office with a report on its compliance with conditions set forth on the cCertificate of nNeed or certificate of need exemption, will be assessed a fine, not to exceed $1,000 per failure per day. In assessing the penalty the agency shall take into account the degree of noncompliance. Fines for noncompliance with an indigent care condition will be assessed using the following formula except when there are found to be mitigating factors or when the condition noncompliance is found to be willful under (3)(b) of this rule:
CAGP = the service condition agreed to by certificate of need or certificate of need exemption holder
ACTP = the actual percentage of service provided by the certificate of need or the certificate of need exemption holder during the reporting year
FAMT = dollar amount of the fine
FAMT = $365,000 x (CAGP – ACTP) / CAGP
Indigent care includes charity care and Medicaid. Charity care is defined, for purposes of condition compliance, as the portion of the facility charges reported to the Agency for Health Care Administration for which there is no compensation, other than restricted or unrestricted revenues provided to a facility by local governments or tax districts regardless of the method of payment, for care provided to a patient whose family income for the twelve months preceding the determination is less than or equal to 200 percent of the federal poverty level, unless the amount of charges due from the patient exceeds 25 percent of the annual family income. However, in no case shall the facility charges for a patient whose family income exceeds four times the federal poverty level for a family of four be considered charity. Medicaid patient days are defined, for purposes of condition compliance, as the patient days reimbursed by Medicaid.
(b) The fine for willful noncompliance will be assessed in an amount equal to FAMT + $365,000 x .5, but the total fine shall not exceed $365,000. The existence of one or more of the following circumstances will evidence willful condition noncompliance:
1. The CON or CON exemption holder fails to meet its indigent care condition when the provision percentage is below the rate of indigent care provided by all other facilities in the planning area for the reporting period; or
2. The CON or CON exemption holder has been fined for condition noncompliance for any of the previous 3 years’ CON condition compliance reporting periods.
(c) The fine assessed using FAMT will be reduced when there is a finding of mitigating factors and the condition noncompliance is not willful. Examples of mitigating factors include but are not limited to the following:
1. The CON or CON exemption holder’s history of condition compliance.
2. The CON or CON exemption holder’s overall indigent care service.
3. The CON or CON exemption holder’s level of indigent care relative to all other similar providers in the relevant planning area.
4. The conditioned facility showing an operating loss or negative total margin on its most recent audited financial statement.
Specific Authority 408.034(6), 408.15(8) FS. Law Implemented 408.040(1)(b), (d), (2)(a), 408.044, 408.061(6), 408.08(2) FS. History–New 7-25-89, Formerly 10-5.021, Amended 12-13-04,_______.