EBG Health Care III, Inc. v. Missouri Dept. of Social Services, WD
| Decision Date | 10 May 1994 |
| Docket Number | No. WD,WD |
| Parties | EBG HEALTH CARE III, INC. d/b/a Woodland Manor, Appellant, v. MISSOURI DEPT. OF SOCIAL SERVICES, et al., Respondent. 47846. |
| Court | Missouri Court of Appeals |
Harvey M. Tettlebaum, Husch & Eppenberger, Jefferson City, for appellant.
Karolin R. Solorzano, Mo. Dept. of Social Services, Jefferson City, for respondent.
Before BERREY, C.J., P.J., and BRECKENRIDGE and SMART, JJ.
This is an appeal of the decision of the Circuit Court of Cole County affirming a decision of the Administrative Hearing Commission denying Appellant EBG Health Care III, Inc. an increase in its Medicaid per diem reimbursement rate. The judgment is affirmed.
EBG Health Care III, Inc. ("EBG") owns and operates a nursing home in Springfield. The home is known as Woodland Manor. The home is a 180-bed facility which is licensed and certified as a skilled nursing facility providing long-term residential care. EBG participates in the Medicaid program pursuant to § 198.045, RSMo 1986.
The nursing home entered the Medicaid program in 1973 under prior ownership. Except for a change in its reimbursement rate in 1984 due to a change in its level of care, the only changes in the reimbursement rate since 1981 have been in recognition of inflation. In 1984, the level of care was changed from an intermediate care facility (ICF) to a skilled nursing facility (SNF), resulting in an increase in the reimbursement rate.
In 1988, while the home was owned by another party, the Missouri Division of Aging (DOA) determined that the home was not complying with state regulations. DOA removed 40 residents from the home, and forced the home to enter into a consent agreement. The consent agreement set standards for various care items, such as, for instance, requiring that only an RN or specially trained LPN would be permitted to install tube feedings. The consent agreement also required the hiring of an independent monitor and an independent consultant. It also set standards for nurse supervisors and established an enhanced ratio of nurse aides per patient for the different duty shifts.
EBG bought the facility in May, 1989, after the former owners had been operating under the consent agreement for more than one year. EBG entered into a new consent agreement with DOA. The new consent agreement did not mandate the enhanced care ratios set forth in the earlier consent agreements. In July, 1989, an inspection by DOA revealed no deficiencies, and the consent agreement was terminated.
The base rate applicable to the home was $33.85 for the overall reimbursement rate, of which $11.80 was the base rate for actual patient care costs, per patient per day. With the change in the level of care from ICF to SNF, and the inflation factors included, EBG was being reimbursed at the overall rate of $44.13, and the actual patient care portion of that was $15.54 (per patient) per day in 1989. EBG was spending for actual patient care, at the time it requested rate reconsideration, $26.80 per day. Thus, the actual cost difference was $11.26 per day. EBG requested an increase of $10.41 per day.
After denial by the Department of Social Services of EBG's request for an increase in its Medicaid reimbursement rate, EBG sought review of the matter by the Administrative Hearing Commission under § 621.055 and § 208.156, RSMo 1986. The Administrative Hearing Commission ruled against EBG. The Circuit Court of Cole County affirmed the decision of the Administrative Hearing Commission, and EBG brings its appeal to this court.
On appeal, we review the decision of the Administrative Hearing Commission ("the Commission") and not the decision of the circuit court. Welty v. State Bd. of Chiropractic Examiners, 759 S.W.2d 295, 297 (Mo.App.1988). Generally, our review is limited to determining whether the decision is supported by substantial and competent evidence upon the whole record, whether it is arbitrary, capricious, or unreasonable, or whether the Commission abused its discretion. Department of Social Services v. Our Lady of Mercy Home, 803 S.W.2d 72, 75 (Mo.App.1990). This court will not substitute its judgment on factual matters for that of the Commission. Barnes Hosp. v. Missouri Comm'n on Human Rights, 661 S.W.2d 534, 535 (Mo. banc 1983). The Commission judges the credibility of the witnesses. St. Louis County v. State Tax Comm'n, 406 S.W.2d 644, 649 (Mo. banc 1966). If the evidence would establish either of two opposing possible findings, we must uphold the factual determination of the Commission. Walker v. Supervisor of Liquor Control, 781 S.W.2d 113, 114 (Mo.App.1989).
EBG had argued before the Department of Social Services that it was entitled to a rate increase due to a "change in case mix" and also due to "extraordinary circumstances." Before the Commission, EBG dropped the claim of extraordinary circumstances, and submitted its case only on the basis of a change in case mix. The term "change in case mix" means the change in the average acuity level of its residents. Regulation 13 C.S.R. 70-10.010 at § (4)(A)3.F. provides:
The prospectively determined reimbursement rate may be adjusted only under the following conditions:
* * * * * *
F. When an adjustment to a facility's rate is made in accordance with the provisions of § (7) of this rule[.]
(7)(D) provides as follows:
The Committee may review the following conditions for rate reconsideration:
a. Those costs directly related to a change in a facility's case mix....
The DOA has a point system by which it measures the acuity level of the patients in a facility. Each patient is rated from 0-9 in nine different categories of care. Therefore, a completely self-sufficient resident would be a 0, and a patient requiring maximum care around the clock would be an 81. The DOA study in 1980 for this facility showed an average point per patient of 29.0. The study in 1989 showed the average point per patient had risen to 34.2. From August, 1986 to August, 1989, DOA surveys showed acuity levels from 30.99 to 35.06. Thus, there was an increase in the sickness of the patients from 1980 to 1989, but not such a large increase as to require that the facility in question be rated a skilled nursing facility. A patient whose acuity level is 54 or more requires a SNF. Since 1984, this nursing facility has been operated as a SNF.
The hearing before the Commission was conducted in September, 1990. At the hearing, Ewing Gourley, President and major shareholder of EBG, testified that, even after the consent agreements expired, EBG maintained the same level of staffing specified by the consent agreement because he believed it was necessary to take care of the residents' needs. Mr. Gourley testified that, to operate the home on a level mandated by the consent agreement, it was necessary to have 57 staff members, whereas only 31 staff members would be the basic requirement to provide the level of care necessary under the regulations.
Barbara Bullington, the administrator of the home, testified on behalf of EBG that she had reviewed records going back as far as 1980. She said there had been a "tremendous change" in the needs of the residents of the home. On cross-examination, she was asked whether the change from ICF to SNF would be the cause of the changes she had seen. She answered "not particularly," since often there are ICF patients in a SNF, and often SNF patients in an ICF. She suggested that the change in the care needs of the residents was due to the fact that hospitals were releasing patients from hospital care earlier than was formerly the case.
Amy Frett, the facility's director of nursing, testified that patients coming into the facility are more acutely ill than in 1980. She had prepared an exhibit which was a comparison of patient statistics for 1990 with patient statistics for the population in 1980. Instead of using the same categories used by the DOA in her exhibit, she had developed her own categories of patient conditions. Her testimony proceeded through each line of the exhibit. She compared the number of residents having different conditions in 1980 with the number found to have similar conditions on September 10, 1990, and described why such conditions required care or attention. She testified that 90 out of 149 patients were on bowel and bladder training. She said that the nursing home was using Foley catheters for incontinent patients to a much lower degree currently than in 1980. She suggested that having the patients on bowel and bladder training (meaning that they are taken to the restroom frequently on a regular schedule) was more in keeping with the greater emphasis of the United States Health Care Financing Administration on patient outcomes. The following are the categories and figures set forth in her exhibit:
WOODLAND MANOR--PATIENT STATISTICS
12/30/80 09/10/90
(Based on 73 Res.) (Based on 149 Res.)
# of Res. % # of Res. %
Elopement 1 1.4% 7 4.7%
Blind 0 0% 1 .7%
Decubitus 4 5.5% 24 16.1%
Tube Feeding 1 1.4% 4 2.7%
Feeding--Total 12 16.4% 56 37.6%
Feeding--Assist 7 9.6% 37 24.8%
Feeding--Self 43 58.9% 51 34.2%
Non"Ambulatory 24 32.9% 83 55.7%
Bladder Incontinency 16 21.9% 91 61.1%
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