STATE OF NORTH CAROLINA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COUNTY OF ROBESON 07 DHR 1758 and 1759

LIFE SOLUTIONS OF LUMBERTON, )

NORTH CAROLINA, LLC d/b/a TIMBERWOOD )

and BRIDGECREST, )

Petitioner, )

)

v. ) DECISION )

N. C. DEPARTMENT OF HEALTH AND )

HUMAN SERVICES, DIVISION OF MENTAL )

HEALTH, DEVELOPMENTAL DISABILITIES, )

AND SUBSTANCE ABUSE SERVICES, )

Respondent. )

THIS CAUSE, COMING ON TO BE HEARD AND BEING HEARD before the undersigned Administrative Law Judge at the September 4, 2008 hearing on the Petitions for Contested Case Hearing. Petitioner was present and represented by Jose Coker and Derek Hunter. Respondent was represented by Lisa Granberry Corbett, Assistant Attorney General. At the conclusion of Petitioner’s evidence, having considered the evidence presented and arguments of counsel, the undersigned Administrative Law Judge ruled in favor of Respondent and ordered that Respondent submit proposed findings of fact and conclusions of law. Respondent submitted the proposed decision on 21 November 2008.

BASED ON careful consideration of the sworn testimony of the witnesses presented at the hearing, along with documents and exhibits received and admitted in evidence and the entire record in this proceeding, the Undersigned makes the following Findings of Fact. In making the Findings of Fact, the Undersigned has weighed all the evidence and has assessed the credibility of the witnesses by taking into account the appropriate factors for judging credibility, including but not limited to the demeanor of the witnesses, any interests, bias, or prejudice the witness may have, the opportunity of the witness to see, hear, know, or remember the facts or occurrences about which the witness testified, whether the testimony of the witness is reasonable, and whether the testimony is consistent with all other believable evidence in the case.

FINDINGS OF FACT

1. Petitioner Life Solutions, Inc. was a provider of Mental Health Residential Level III services. Petitioner operated a facility located at 210 E. Fayetteville Street, Lumber Bridge, North Carolina, 28371 (“Bridgecrest”) and a facility located at 661 Burns Road, Lumberton, North Carolina (“Timberwood”).

2. The State of North Carolina, through its Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, implemented its Policy and Procedures for Endorsement of Providers of Medicaid Reimbursable MH/DD/SA Services (“Policy”), effective June 20, 2005, with which the Local Management Entity (“LME”) is required to comply.

3. On December 11, 2006, the LME issued a conditional endorsement for the Timberwood and Bridgecrest facilities, effective until February 28, 2007.

4. The LME conducted additional reviews of each facility, resulting in a requirement that the facilities provide plans of correction to further the endorsement process. The plans of correction were due May 23 and 24, 2007.

5. On June 4, 2007, ,the LME received Petitioner’s plans of correction for both facilities. Both plans of correction were accepted by the LME on June 6, 2007. The follow-up visit was originally scheduled for June 14, 2007, but was rescheduled for June 20, 2007.

6. During follow-up, further alleged deficiencies were found, and Petitioner was asked to submit another plan of correction for each facility by June 22, 2007. Petitioner timely submitted plans of correction for each facility on June 22, 2007.

7. The Division of Health Service Regulation (“DHSR”) conducted a complaint survey at the Bridgecrest facility in May 2007 and issued a statement of deficiencies on June 12, 2007. The statement of deficiencies cited alleged violations of several rules, which resulted in a finding that that the alleged violations posed a danger to the health, safety and welfare of the clients in the facilities. DHSR issued a Suspension of Admissions and a Type A violation, and assessed a $2,000 penalty. DHSR sent the statement of deficiencies to the LME, and the LME received it on June 19, 2007. On June 26, 2007, the LME notified the clients’ clinical homes of the alleged health and safety concerns found by DHSR.

8. On August 24 2007, the two facilities were notified that full endorsement was pending for the period of September 1, 2007 to October 1, 2007 because of the DHSR investigation.

9. Southeastern Regional Mental Health, Developmental Disabilities and Substance Abuse Services LME issued a Notification of Endorsement Action on September 19, 2007, notifying Petitioner that Bridgecrest had shown evidence of substantial failure to comply with current rules governing the operation of a Level III residential group home, and that the LME was withdrawing the Bridgecrest endorsement effective October 31, 2007.


10. The Policy states:

If in the course of the on-site review the Area Authority County Program discovers areas that, if substantiated by the Division of Facility Services [(“DFS”)], result in a Type A violation could affect the status of the current license, the endorsement process will be suspended until DFS is satisfied that the provider currently meets all licensure requirements and so notifies the area authority. The Area Authority County Program must notify DFS within twenty-four hours of the on-site visit of the areas of concern. The Area Authority County Program will notify the provider by letter within ten business days following the on-site review regarding the status of the endorsement review. Approved A; B, pended for plan of correction; C, pended for referral to DFS. Clock stops until DFS notifies Area Authority County Program, et cetera. C, pended for referral to DFS. Clock stops until DFS notifies Area Authority County Program, et cetera.

11. On September 27, 2007, DHSR issued a Type A violation against the Timberwood facility.

12. On October 4, 2007, the LME issued a Notification of Endorsement Action notifying Petitioner that it was withdrawing the endorsement for the Timberwood facility effective November 1, 2007.

13. The license for its Timberwood facility was revoked by DHSR. The license revocation was not appealed, such that Timberwood did not have a current license at the time of the hearing. In fact, Petitioner’s Director of Operations testified that Petitioner did not seek to continue operating Timberwood.

14. The Petitions in these actions were filed October 26, 2007.

15. Bridgecrest, after the suspension of admissions, ceased operation and was no longer operating at the time of the contested case hearing. Further, Petitioner’s lease on the building ended three (3) months before the hearing.

16. Both parties received notices of hearing by certified mail more than fifteen (15) days before the hearing.


CONCLUSIONS OF LAW

1. All parties have been correctly designated and there are no questions as to nonjoinder or misjoinder. The Office of Administrative Hearings has jurisdiction over the parties and subject matter of this litigation.

2. Pursuant to N.C. Gen. Stat. §§ 122C-111 and 112.1(a)(6) and (7), the provision, monitoring, and management of mental health services in the State of North Carolina are regulated by state and federal law and rules from Respondent and from the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services.

3. The endorsement process is regulated in part by the Policy, which sets forth procedures for LMEs to follow.

4. As to the Timberwood facility, Petitioner failed to show by the preponderance of the evidence that the LME failed to follow the provisions of the Policy that require a stay of endorsement until such time as DFS (now DHSR) finds the facility in compliance with licensure requirements in that the LME took its action only after being notified by DHSR of the findings of non-compliance with licensure requirements.

5. As to the Bridgecrest facility, Petitioner failed to show by the preponderance of the evidence that the LME failed to follow the provisions of the Policy. In addition, if any such violation occurred, the alleged violation was in June 2007, and therefore the Petition was untimely filed.

BASED ON the foregoing Findings of Fact and Conclusions of Law the undersigned makes the following:

DECISION

The decision to withdraw endorsement for the Bridgecrest and Timberwood facilities is upheld.

NOTICE

The agency making the final decision in this contested case is required to give each party an opportunity to file exceptions to this decision issued by the Undersigned, and to present written arguments to those in the agency who will make the final decision. N. C. Gen. Stat. § 150B-36(a).

In accordance with N.C. Gen. Stat. § 150B-36 the agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the agency, the agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the agency in not adopting the finding of fact. For each new finding of fact made by the agency that is not contained in the Administrative Law Judge’s decision, the agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact.

The agency shall adopt the decision of the Administrative Law Judge unless the agency demonstrates that the decision of the Administrative Law Judge is clearly contrary to the preponderance of the admissible evidence in the official record. The agency that will make the final decision in this case is the North Carolina Department of Health and Human Services.

ORDER

It is hereby ordered that the agency making the final decision in this matter serve a copy of the final decision to the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, North Carolina 27699-6714, in accordance with N.C. Gen. Stat. § 150B-36.

SO ORDERED.

This 3rd day of December, 2008.

______

Shannon R. Joseph

Administrative Law Judge

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