Nursing home operators settle fight about mandatory
air conditioning power generator regulations
Should public funds help pay for estimated
$230 million compliance costs?
Florida Construction News staff writer
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 last 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.

By January, much of the issue had
been resolved when Gov. Rick Scott
modified proposed regulations that
caused nursing home operators to
take their objections to the original
proposals to court. However, there
still are questions about the timeline
and overall cost/scale of implementa-
tion of the backup power provisions.

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 disas-
ter. 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 ob-
jected to the price tag,” the Miami
Herald has reported.

The generators worked as planned
in 2017 for the gas stations and re-
lated 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. 4 – MARCH 2018 — Florida Construction News
The Rehabilitation Center at Hollywood
Hills, where eight people died when tem-
peratures soared without air conditioning
after Hurricane Irma last September.

While that nursing home and oth-
ers had limited backup power allow-
ing them to maintain lights and some
medical equipment, they were un-
equipped for the higher air condition-
ing power demands.

After the storm, Gov. Rick Scott di-
rected two state agencies to demand
that nursing homes and assisted liv-
ing facilities quickly add generators
and fuel to maintain safe tempera-
tures – and they were given a Nov. 15
deadline. However, in late October a judge
accepted industry objections to the
deadline, and overturned the regula-
tions. The Florida Health Care Associa-
tion (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 needed more
time – and wanted public money – to
help pay the cost.

There is some deja vu here, relat-
ing to the 2006 arguments and fund-
ing 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 installa-
tion costs. However, the funds never
materialized, and most nursing
homes continued with limited gener-
ator power.

Unfortunately, the option for evac-
uation to other nursing homes didn’t
work when Hurricane Irma’s course
shifted and residents who had been
evacuated from one home found
themselves stranded in another loca-
tion, that also needed to be evacu-
ated. Back in 2006, gas station opera-
tors on evacuation routes didn’t put
up a fight against the generator legis-
lation, even though they apparently
didn’t receive any subsidies for the
systems, which could have cost
$45,000 each (in 2007 dollars) to in-
stall. In fact, they helped craft the leg-
islation. “Members have a responsibility to
their communities and part of that re-
sponsibility is to comply with the
law,” Jim Smith, then president and
chief executive of the Florida Petro-
leum 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 popu-
lation 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 gen-
erators would operate safely when in-
stalled. 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 Adminis-
trative Hearings, ruled that “it was im-
possible for the vast majority of
nursing homes” and assisted living
facilities to comply with the orders by
the deadline.

Gov. Scott initially 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 gen-
erator rules permanent.

The FHCA has asked that Medi-
caid, which covers about 60 percent
of the nursing home days – to cover
a corresponding amount of the costs.

This would result in a cost to the
state of $53.8 million. Federal match-
ing 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 al-
ready 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 repre-
sents 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 gover-
nor’s original intent — to ensure vul-
nerable Floridians are kept safe
during emergency situations,” Gail
Matillo, president of the Florida Sen-
ior Living Association, was quoted as
saying in the SunSentinel.

“We believe these rules will bene-
fit both Florida seniors and the com-
munities invested in providing them
with quality living environments,” she
said. Florida alleges Jacksonville contractor conducted
$1.8 million workers’ compensation scam
Florida Construction News staff writer
Florida chief financial officer (CFO)
Jimmy Patronis says Jeovane Fe-
lizardo, owner of JJF Construction
Services, LLC in Jacksonville has
been arrested after a workers’ com-
pensation fraud investigation re-
vealed that he allegedly used various
local money service businesses to
cash checks in an alleged attempt to
illegally conceal his total payroll from
his workers’ compensation insurance
provider to avoid higher premium
costs. Investigators discovered that Fe-
lizardo provided false payroll totals to
his workers’ compensation provider
and misrepresented his employee’s
class codes, a CFO news release
said. Felizardo reported his total payroll
to be $76,799 when signing up for
his policy. Based on the declared
payroll amount and the reported em-
ployee class codes, Felizardo’s insur-
ance company determined the
premium for his workers’ compensa-
tion policy to be $24,894, the CFO
asserted. Florida corporate records indicate JJF
Construction Services operated from
7035 Phillips Hwy. Jacksonville
After further investigation by the
Bureau of Insurance Fraud, investiga-
tors found that Felizardo cashed a
minimum of 540 checks from April
16, 2016 to April 16, 2017 all issued
by contractors doing business with
JJF Construction Services totaling
$5,929,534. The contractors con-
firmed that the checks issued were
only to cover labor costs and not any
material costs associated.

Felizardo’s failure to accurately re-
port payroll and class codes to his in-
surer resulted in a gross
underpayment of insurance premi-
ums. Had the actual amount of Fe-
lizardo’s payroll and proper class
codes been reported to his worker’s
compensation provider, the resulting
premium rate would have been
$1,841,137, a difference of
$1,816,243. Felizardo was arrested Jan. 12,
2018 at his place of residence and
transported to the Duval County Jail
without incident. He has been
charged with workers compensation
fraud and scheme to defraud. Jail
records indicate he was released on
$100,000 bond.

Records at the Florida Division of
Corporations indicate that JJF Con-
struction Services LLC was adminis-
tratively dissolved on on Sept 22 for
failing to file an annual report. Fe-
lizardo is listed as the company’s
registered agent, at 7035 Philips
Hwy. Suite 37, Jacksonville.

This case will be prosecuted by
Joe Licandro of the Fourth Judicial
Circuit State Attorney’s Office. If con-
victed, Felizardo could face up to 60
years in prison.

Florida Construction News — MARCH 2018 – 5