Deficiency-Free AZ – Inspections 101

            The Arizona Department of Health Services (the “Department”) oversees inspections of licensed assisted living facilities.  The inspectors, known as “surveyors,” will show up unannounced at your facility to perform their annual, or a complaint, inspection (both can be conducted on the same visit).  The surveyor is required to present photo identification on entry and present a form developed by the state that advises the licensee of their inspection and due process rights. This form is often referred to as the Notice of Inspection Rights (partially pictured above), or “Entrance Letter.” Ariz. Rev. Stat. §41-1009 sets forth the general parameters of the inspection process, the licensee’s rights during the inspection, and processes following the on-site inspection.

            If the person who answers the door or the facility manager refuses to sign the Notice of Inspection Rights, the surveyor is supposed to note the refusal to sign on the form, and in all situations, should leave one copy of the form at the facility and retain another copy for the Department’s records.  The surveyor must inform each person interviewed during the inspection that statements made by the person may be included in the inspection report, and that their participation in the interview is voluntary. Ariz. Rev. Stat. §41-1009(A)(7)(a)(b).

            There is no rule preventing the licensee from video or audio recording the entire inspection process.  Generally, inspections should be conducted in a neutral manner by the surveyor, who would often previously provide the licensee with “technical compliance” advice during the course of the inspection if minor items were found that needed to be remedied. Based upon reports by licensees, this is not occurring as often, nor are exit interviews being routinely conducted, despite the reference to them on the Entrance Letter. We have been informed that surveyors are instead deferring to their supervisor, and then simply issuing either a Statement of Deficiencies “SOD” or notification of no deficiencies, without a post-inspection discussion with the licensee.

If deficiencies are found, the licensee has an opportunity to correct them through a Plan of Correction (“POC”), submitted to the Department following the inspection.  Because there have been more instances lately of allegations that surveyors are unduly intimidating and interrogating caregivers, interviewing residents with cognitive diagnoses, and failing to allow the manager to accompany the surveyor, with resulting inspection reports being referred directly to the Enforcement Division with no POC allowed, our firm believes that it is important to remind licensees that they have an absolute right to record the inspection process conducted at their facility. In Arizona, a licensee even has a statutory right to have an attorney or other expert in their field present during the interview to represent or advise the regulated person. See Ariz. Rev. Stat. §41-1009(A)(7)(d). 

            Moreover, “the agency inspector, auditor or regulator may not take any adverse action, treat the regulated person less favorably or draw any inference as a result of the regulated person’s decision to be represented by an attorney or advised by any other experts in their field.”  Ariz. Rev. Stat. §41-1009(B)(4). Thus, in addition to the right to record the inspection, the licensee can even call an attorney or industry consultant and have them available during the course of the inspection.  They may also call the Department or the Ombudsman’s office whose phone number is on the Entrance Letter, if they feel that the surveyor is acting unreasonably or not following state law and regulatory rules while they are on-site.

            It has come to our attention recently that the surveyors are taking photographs of facility records, including resident medical records, on their personal phones.  Because the “information and documents provided to the agency inspector…become a public record,” and the regulated person has no opportunity to redact privileged or confidential information captured by the photo, it is our opinion that the licensee can refuse to allow this practice, which poses a variety of concerns regarding the individual resident’s statutory rights to privacy and confidentiality, as well as HIPAA concerns when this confidential information is captured by a state agent’s private phone. The surveyor can, however, request photocopies, or even take original documents in certain circumstances.

            Following the inspection, a report should be issued within thirty (30) days, and “Unless otherwise provided by state or federal law, the agency shall provide the regulated person an opportunity to correct the deficiencies unless the agency documents in writing as part of the inspection report that the deficiencies are:

1.     Committed intentionally.

2.     Not correctable within a reasonable period of time as determined by the agency.

3.     Evidence of a pattern of noncompliance.

4.     A risk to any person, the public health, safety or welfare or the environment.”

Ariz. Rev. Stat. §41-1009(E)  If the agency is unsure whether the regulated person meets the exemptions in subsection E above, the agency SHALL PROVIDE the regulated person with an opportunity to correct the deficiencies. Ariz. Rev. Stat. §41-1009(F) (emphasis added). If the agency does not allow the regulated person an opportunity to correct deficiencies, on the request of the regulated person, the agency SHALL PROVIDE a detailed written explanation of the reason that an opportunity to correct was not allowed. Ariz. Rev. Stat. §41-1009(H) (emphasis added).  We are finding that the Department is simply citing subsection E of the statute above when it sends its Statement of Deficiencies (“SOD”) along with a notice that it will not accept a POC because the matter has been referred to Enforcement. The licensee does, however, have a right to ask for a detailed explanation of why a POC is not allowed.

If a POC is allowed, the licensee will generally only have ten (10) days to submit that to the Department via email, and then the Department has thirty (30) days to determine if the regulated facility is in substantial compliance. Ariz. Rev. Stat. §41-1009(G)

Failure of an agency … employee to comply with investigation rules and procedures:

1. May subject the employee to disciplinary action or dismissal.

2. Shall be considered by the judge and administrative law judge as grounds for reduction of any fine or civil penalty. Ariz. Rev. Stat. §41-1009(P).

Thus, where a licensee has a reasonable basis to challenge the SODs and Enforcement Action resulting from an inspection, or believes that the surveyor has violated their due process rights, they have a right to contest the inspection results, and remedies are available to protect their interests. If a regulated party is ultimately successful in challenging an Enforcement Action, they may even be entitled to claim reimbursement of fees and other expenses from the Department under Ariz. Rev. Stat. §12-348.

The Department has produced training materials for providers available at: https://azdhs.gov/licensing/residential-facilities/index.php#providers-training  A copy of the Entrance Letter can be found in the “Basics of Residential Licensing” presentation on that webpage. The Maintaining Compliance presentation was recently updated on April 11, 2022, and contains several slides pertaining to Enforcement Actions. Arizona assisted living licensees are encouraged to review those materials.

When the knock comes to your facility’s door, respect the process and the surveyor, but do not be afraid to assert the rights available to small businesses licensed by the Arizona Department of Health Services.

Key takeaways:

1)    Read the Entrance letter and understand your rights, even if it means keeping the surveyor on your doorstep a few extra minutes.

2)    The licensee has the right to have the manager, or other attorney or expert, accompany the surveyor, even if it means making the surveyor wait a reasonable amount of time for that person to arrive on the premises.

3)    The licensee has a right to record the inspection by audio or video means. It is recommended that at the beginning of the recording, a statement is made to the effect that the person making the recording and the surveyor understand that the inspection is being recorded. Due to privacy concerns of residents, among other things, any recordings made at the inspection should NOT be shared with anyone other than a legal representative or industry consultant under confidentiality. (i.e. no social media posts of inspections).

4)    Anyone interviewed during the inspection must be informed that their statements may be included in the inspection report, and they may voluntarily refuse to be interviewed.

5)    Following the inspection, the licensee has a right to submit a POC, and if that right is not granted, they have a right to ask the Department for a detailed explanation of why they were not provided an opportunity to submit a POC.

Look for more weekly blog posts on topics of interest to Arizona Assisted Living and Behavioral Health operators.  The information herein is intended to be educational and an introduction to the subject matter presented. Despite any statutory or regulatory references cited in the article above, it is NOT specific legal advice to be relied upon for specific individual circumstances. Contact your own legal professional or reach out to our firm if you would like specific advice on this topic.

We welcome topic suggestions!  Write to info@pinkowskilaw.com if you are curious to learn more about a certain topic impacting assisted living or other group housing concerns.