Nursing home operators settle fight about mandatory air conditioning power generator regulations: Should public funds help pay for estimated $230 million compliance costs?

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The Rehabilitation Center at Hollywood Hills, where eight people died when temperatures soared without air conditioning after Hurricane Irma in September

How much of a market is there for electrical contractors and generator suppliers to provide emergency backup power, which turned out to be both effective and dysfunctional (depending on the circumstances) when Hurricane Irma blew through Florida in September?

The answer varies, especially for the hot-button area of backup power requirements for nursing homes and assisted care facilities – as lawyers and lobbyists take their cases to the courts and the Florida legislature. One estimate puts the cost at $230 million – but who will pay, and when, has been a hot-button controversy..

This story started more than a decade ago, after Hurricane Wilma in 2005. Legislation implemented then required gas stations to have backup power to keep the lights on and pumps running after a natural disaster.

The original legislation passed in 2006 also would have required all nursing homes to install generators capable of cooling and running their facilities. “That went nowhere as the powerful long-term care industry objected to the price tag,” the Miami Herald has reported.

The generators worked as planned in 2017 for the gas stations and related convenience stores, but when Hurricane Irma hit, some assisted care facilities were caught in a bind, and eight people died in a Broward County nursing home left without power.

While that nursing home and others had limited backup power allowing them to maintain lights and some medical equipment, they were unequipped for the higher air conditioning power demands.

After the storm, Gov. Rick Scott directed two state agencies to demand that nursing homes and assisted living facilities quickly add generators and fuel to maintain safe temperatures – and they were given a Nov. 15 deadline.

However, in late October a judge accepted industry objections to the deadline, and overturned the regulations.

The Florida Health Care Association (FHCA), representing nursing home operators, estimates it will cost about $230 million for more than 650 nursing homes to get the higher powered generators needed to keep temperatures at 81 degrees or under for four days following a storm.

The industry says it needs more time – and wants public money – to help pay the cost.

There is some deja vu here, relating to the 2006 arguments and funding battles.

There, the nursing homes fought – and won – the argument that they didn’t need the generators, as long as they had evacuation plans in place. The argument was that if nursing homes installed generators and would receive patients evacuated from other locations, they should be able to receive some government subsidies for the generator installation costs. However, the funds never materialized, and most nursing homes continued with limited generator power.

Unfortunately, option for excavation to other nursing homes didn’t work Hurricane Irma’s course shifted and residents who had been evacuated from one home found themselves stranded in another location, that also needed to be evacuated.

Back in 2006, gas station operators on evacuation routes didn’t put up a fight against the generator legislation, even though they apparently didn’t receive any subsidies for the systems, which could have cost $45,000 each (in 2007 dollars) to install. In fact, they helped craft the legislation.

“Members have a responsibility to their communities and part of that responsibility is to comply with the law,” Jim Smith, then president and chief executive of the Florida Petroleum Marketers and Convenience Store Association, said in a published interview. Rules set out guidelines for the generator requirement based on the number of pumps, and the population of the area the gas stations served. While they could use portable generators, there was also a requirement for proper “transfer switches” to ensure the plug-in generators would operate safely when installed.

The assisted care/nursing story is different. Industry lobbyists argued the attempt to require generators to be installed by mid-November, 2017, was unrealistic. In October, Gar. W. Chiseller, an administrative law judge with the Florida Division of Administrative Hearings, ruled that “it was impossible for the vast majority of nursing homes” and assisted living facilities to comply with the orders by the deadline.

Gov. Scott said he would appeal the decision, and a spokesman for the governor said the administration will continue to work with the legislature to make the generator rules permanent.

The FHCA has asked that Medicaid, which covers about 60 percent of the nursing home days – to cover a corresponding amount of the costs. This would result in a cost tot he state of $53.8 million. Federal matching dollars would absorb another $84.1 million.

Meanwhile, the industry says it is working to be compliant with the new rules – it just needs more time.

“Some of our members are already compliant, they were before the emergency rule, and the rest are working towards compliance now,” Steve Bahmer told the Wall Street Journal. Bahmer is chief executive at LeadingAge Florida, which represents both nursing and assisted living facilities.

In January, the industry made peace with revised regulations, when Gov. Scott changed the rules so that assisted living facilities no longer must have generators, but instead are required to have ready access to an alternative power source in the event of a power loss.

The proposed fuels supply rules also were revised: Those with 16 beds or less must have two days of fuel; those with 17 or more beds must have three days. Any facilities in an area where an emergency has been declared must acquire four days of fuel.

“Throughout this process, we have remained supportive of the governor’s original intent — to ensure vulnerable Floridians are kept safe during emergency situations,” Gail Matillo, president of the Florida Senior Living Association, was quoted as saying in the SunSentinel.

“We believe these rules will benefit both Florida seniors and the communities invested in providing them with quality living environments,” she said.

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