STATE OF NORTH CAROLINA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COUNTY OF GUILFORD 06 DHR 0790, 0992, and 1099

______

ALL STARS GROUP HOME LLC )

MARY J. McDUFFIE, )

Petitioner, )

)

vs. ) DECISION

)

NC DEPARTMENT OF HEALTH AND )

HUMAN SERVICES )

Respondent. )

______

On November 9, 2006, Administrative Law Judge Melissa Owens Lassiter heard this contested case in High Point, North Carolina. The caption of this case has been amended to reflect that the appropriate Respondent is the NC Department of Health and Human Services, the state agency, and not The Guilford Center, the area authority acting on DHHS’ behalf.

On December 18, 2006, the undersigned ruled that Respondent properly withdrew the conditional endorsement of Petitioner to provide enhanced mental health services, and ordered Respondent to submit a proposed decision to the Office of Administrative Hearings. On January 19, 2007, Respondent filed its proposed Decision with the Office of Administrative Hearings.

APPEARANCES

Attorney for Petitioner Attorney for Respondent

Romallus Murphy Diane Martin Pomper

P.O. Box 20383 NC Department of Justice

Greensboro, NC 27420 9001 Mail Service Center

Raleigh, NC 27699-9001

JURISDICTION

The parties stipulated that this case is in the appropriate forum and venue, and the petition was filed in a timely and appropriate fashion. All necessary parties are joined.

ISSUE

Whether Respondent acted properly when it withdrew its conditional endorsement of Petitioner to provide enhanced mental health services?

BURDEN OF PROOF

Petitioner bears the burden of proof in this contested case.

EXHIBITS ADMITTED INTO EVIDENCE

For Petitioner: Exhibits A - I, and K attached to Petitioner’s Statement of Facts and Position and Supplementary Response to Summary Judgment Motion

For Respondent: Exhibits 1 - 14

FINDINGS OF FACT

1. Petitioner is a duly incorporated entity, which sought to provide mental health services to the public in the Guilford County area of North Carolina. Mary J. McDuffie is its owner and chief executive officer.

2. The Guilford Center Behavioral Health and Disability Services is a mental health, developmental disabilities, and substance abuse services area authority for Guilford County, NC. At all relevant times, The Guilford Center was responsible for monitoring mental health providers on behalf of the NC Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services in the Guilford County Area.

3. To assure that the recipients of services get satisfactory services and that the state does not pay for inadequate services, the area authority/county program conducts an “endorsement” process to determine the qualifications of providers. The area authority/county program conducts the endorsement process to compile a list of approved providers who can receive payment from Medicaid for services rendered. Such endorsement process is based on Respondent’s policies and procedures that are used by area authorities/county programs statewide. (Resp Exh 14)

4. On or about July 28, 2005, Mary McDuffie submitted a letter of intent to The Guilford Center, seeking Medicaid endorsement of “All Stars Group Home LLC” to perform enhanced mental health services. (Resp Exh 2)

5. Enhanced services are mental health services provided to members of the community which are paid for by Medicaid.

6. On or about September 30, 2005, Ms. McDuffie submitted an endorsement application to The Guilford Center for “All Stars Group LLC” to provide the following enhanced services: Community, Community Support Team, Diagnostic Assessment, Mobile Crisis, Intensive In-Home, and Multi-Systemic Therapy. (Resp Exh 3)

7. Crystal Nickerson, a Quality Assurance Specialist at The Guilford Center, reviewed Petitioner’s application. Nickerson also looked at the Secretary of State’s website to verify the corporate status of “All Stars Group LLC.” Nickerson found the corporation “All Stars Group Home LLC” listed on the Secretary of State’s website, (Resp Exh 4) but did not find the “All Stars Group LLC” corporation listed with the Secretary of State’s office. Nickerson assumed that “All Stars Group Home LLC” was the entity for which McDuffie submitted the September 30, 2005 endorsement application.

8. In September 2005, the corporation named “All Stars Group Home LLC” was already licensed by Respondent, and began operating a Level III Group Home for children with behavioral problems. Petitioner’s son, Mr. Daniel McDuffie, was listed as the registered agent for that corporation on the Secretary of State’s website. (Resp Exh 4)

9. On October 28, 2005, The Guilford Center staff approved Petitioner’s endorsement application for a conditional endorsement for “All Stars Group Home LLC” to offer services for Community, Community Support Team, Diagnostic Assessment, Mobile Crisis, Intensive In-Home, and Multi-Systemic Therapy (Resp. Exh. 5).

10. On January 26, 2006, The Guilford Center issued a Notice of Endorsement Action authorizing “All Stars Group Home LLC” to provide the above-referenced enhanced services. The effective date of the conditional endorsement was revised to March 20, 2006 to coincide with the starting date of the new service definitions. (Resp. Exh. 6).

11. On January 29, 2006, in anticipation of providing enhanced services, Mary McDuffie signed a Memorandum of Agreement with The Guilford Center regarding the terms of its conditional endorsement. Ms. McDuffie signed this agreement on behalf of “All Stars Group Home LLC.” The agreement’s terms included complying with all State and Federal laws and regulations. (Resp Exh 7).

12. On March 14, 2006, Petitioner McDuffie received Respondent’s letter approving Petitioner’s endorsement to provide Assistive Community Treatment. On March 16, 2006, Petitioner McDuffie received Notice of Endorsement in Assertive Community Treatment Team from Respondent.

13. On or about March 16, 2006, Mary McDuffie submitted Articles of Incorporation to the Secretary of State’s office for “All Star’s Group LLC.” (Resp. Exh. 12) Petitioner conceded that this filing did not affect the issue in this case.

14. On March 29, 2006, Petitioner McDuffie received a Notice of Endorsement from Respondent for the remainder of the enhanced services Petitioner had applied for endorsement.

15 On or about March 29, 2006, the monitoring team at The Guilford Center received a complaint about the health and safety of clients in the group home operated by “All Stars Group Home LLC” at 2315 Bridgette Blvd, Greensboro, NC 27407.

16. On April 5, 2006, Crystal Nickerson and Wanda Torres, employees of The Guilford Center, visited the group home for monitoring due to that complaint. Nickerson and Torres examined client records, client rights standards, and quality assurance standards of the group home. The Guilford Center staff requested the personnel file of Daniel McDuffie. The Guilford Center staff believed Mr. McDuffie to be the acting manager of the group home at times.

17. On April 7, 10, 13, and 20, 2006, The Guilford Center staff again visited Petitioner’s group home for monitoring. During those visits, The Guilford Center staff interviewed clients, and examined staffs’ personnel files. The Guilford Center’s staff requested Mr. McDuffie’s personnel file on April 7, and April 13, 2006 respectively. At the April 13, 2006 visit, such staff talked with Mr. McDuffie, and McDuffie promised to submit his personnel file to The Guilford Center by 9:00 a.m. on April 17, 2006.

18. During their visits to the group home, Nickerson and other staff discovered a large number of violations of the provisions of the mental health rules contained in 10A NCAC Chapter 27. (Resp Exh 13) Specifically, they found deficiencies in the areas of client health and safety, client rights, staffs’ personnel records, clients’ records, and facility requirements. (Resp Exh 13)

19. Mr. McDuffie did not submit his personnel file to The Guilford Center by 9:00 am on April 17, 2006, because he was taking care of clients at the group home and could not leave the home. Because The Guilford Center’s staff was unable to obtain McDuffie’s personnel file, along with other required information, they were unable to complete the monitoring process.

(a) After Mr. McDuffie failed to submit his file, Ms. Nickerson and Ms. Torres spoke with their supervisor, Alexis Underwood, who, in turn, talked to The Guilford Center management. The Guilford Center decided to withdraw its conditional Endorsement of “All Stars Group Home LLC” to provide the enhanced mental health services based on Petitioner’s failure to comply with 10 NCAC 26C .0502.

(b) At approximately 3:00 pm on April 17, 2006, The Guilford Center staff issued the initial Notice of withdrawal of its conditional endorsement to McDuffie’s email. Staff also called Ms. McDuffie on her cell telephone, and advised McDuffie that it was withdrawing its conditional endorsement of Petitioner for all enhanced services. In its Notice of Withdrawal of Endorsement to Petitioner, The Guilford Center wrote:

Personnel requirements have not been met, after reviewers diligently made the necessary efforts to obtain all personnel records for monitoring purposes. Mr. McDuffy failed to comply by providing reviewers with his personnel record upon request. Even though, Mr. McDuffy entered into a verbal agreement during the April 13th visit to submit his personnel record by 9:00 am on Monday, April 17, 2006. Therefore, in accordance with the Withdrawal of Endorsement Procedure, the provider did not make available and accessible all sources of information necessary to complete the monitoring process set out in G.S. 122C-112.1, and the provider did not submit the required documentation. Due to your agency’s failure to comply with the information needed to complete the monitoring process, we have no other recourse than to officially withdraw the Conditional Endorsement of all services issued to All Stars Group Home effective April 17, 2006.

Complete report will follow.

(Resp Exh 10, p 2)

20. At 4:45 pm on April 17, 2006, Petitioner McDuffie delivered Mr. McDuffie’s personnel file to The Guilford Center. Ms. McDuffie did not examine the contents of Mr. McDuffie’s file before delivery, and therefore, did not know the substance of such file.

21. On April 18, 2006, The Guilford Center mailed its April 17, 2006 Notice of Withdrawal of Endorsement to Petitioner. (Resp Exh 10, p 2)

22. The deficiencies found by The Guilford Center related solely to Petitioner’s operation of the group home for children with behavioral problems, and not to the programs for which Petitioner had recently received conditional endorsements.

23. The Guilford Center also reported its noted deficiencies at “All Stars Group Home, LLC” to Respondent’s Division of Mental Health, the Department of Social Services, Respondent’s Division of Facility of Services, and other involved LMEs.

24. Respondent’s Division of Facility Services is responsible for the licensing of group homes. It also monitored the home, found deficiencies, and substantiated a Type A violation at the group home.

25. On or about April 20, 2006, Petitioner relinquished its group home license to Respondent’s Division of Facility Services.

26. On May 2, 2006, The Guilford Center issued its final monitoring report of Petitioner’s group home, and mailed such to Petitioner. (Resp Exh 13)

27. On May 4, 2006, May 31, 2006, and June 16, 2006 respectively, Petitioner filed separate petitions for a contested case hearing appealing The Guilford Center’s decision, on Respondent’s behalf, to withdraw endorsement of Petitioner to conduct the subject enhanced mental health services. These petitions collectively alleged:

The improper withdrawal of endorsement to conduct previously endorsed services; Diagnostic Assessment, Multi-Systemic Therapy, Mobile Crisis, Mobile Crisis Management, Community Support/Children/Adolescents, Community Support Team, Community Support Adults, Assertive Community Treatment Team (ACTT), In-Home Services, Mobile Crisis Team. (All Petitions)

. . . There was no corrective action plan provided, All Stars Group, LLC never received proper notification of the intent to withdraw endorsements. (06 DHR 0790)

. . . Reviewer did not request or review records of the personnel applicable to the servers’’ comprehensive community support services, outpatient, and case management services. (06 DHR 1099)

(Petitions)

28. On June 22, 2006, Chief Administrative Law Judge Julian Mann III ordered these petitions be consolidated for hearing.

29. Any provider of mental health services must be able to show that each employee serving clients has the required education, has completed certain training, is not on the healthcare personnel registry, and does not have a criminal record. A preponderance of the evidence showed that Petitioner failed to submit Mr. McDuffie’s personnel file showing McDuffie complied with these requirements. Assuming Petitioner had a valid excuse for providing Mr. McDuffie’s file eleven days after it was first requested, there was a dispute at hearing whether Mr. McDuffie’s personnel file contained the necessary documents.

(a) Respondent’s witnesses indicated that only the criminal record check and a couple of other pages were in the file when it was received. Petitioner’s witnesses contended that most of the required documents were in the file.

(b) However, neither Ms. McDuffie, nor Mr. McDuffie, nor the clerk who initially assembled Mr. McDuffie’s personnel file knew what documents were contained in McDuffie’s file when it was delivered to The Guilford Center. Petitioner showed no reason was shown why Respondent’s witnesses would lie about the file’s contents. In addition, Petitioner did not offer a copy of such personnel file, or the required documentation at the administrative hearing.

30. A preponderance of the evidence showed that Petitioner failed to comply with several administrative regulations in operating its group home. (See Resp Exh 13) The deficiencies noted in Petitioner’s operation of its group home caused The Guilford Center to lower its confidence in Petitioner’s ability to provide all kinds of services, including the enhanced mental health services for which it had been recently endorsed. The Guilford Center reasonably believed that the deficiencies it found at Petitioner’s group home made it likely that Petitioner would not adequately provide the enhanced services for which it was conditionally endorsed.

31. Petitioner argued that after The Guilford Center issued the Endorsement Withdrawal Notification, The Guilford Center failed to comply with the withdrawal of endorsement procedure when it did not allow Petitioner a reasonable time to correct its deficiencies in managing its group home. However, the Withdrawal of Endorsement policy explains that the “provider will be notified of the intent to withdraw endorsement via the standard ‘Notification of Endorsement Action’ letter.” This policy does not provide that a provider will be given a reasonable time to correct the reasons/deficiencies upon which the provider’s endorsement is withdrawn. (Resp Exh 14, p 6)