(1) Purpose. The purpose of this rule is to implement the provisions of Florida Statutes § 402.73(1), and to provide procedures for the imposition of financial penalties upon providers that fail to comply with a department request for corrective action.
    (2) Definitions. For the purpose of this rule, the following definitions shall apply:
    (a) “”Corrective Action”” means acts of remediation the provider is required to make in response to department findings of unacceptable performance, nonperformance, or noncompliance to the terms and conditions of a contract.
    (b) “”Corrective Action Plan”” means the mutually agreed upon plan prepared by the provider and approved by the department by which corrective action will be accomplished.
    (c) “”Department”” means the Florida Department of Children and Families.
    (d) “”Extenuating Circumstances”” means conditions beyond the control of either party that may form a basis for reasonable forgiveness of certain contract requirements. By their nature such conditions are unique necessitating the determination of their existence on a case by case basis and precluding the application of such a determination to more than a single instance during the term of any contract.
    (e) “”Findings of Fact”” means the conclusions reached by the department on factual issues.
    (f) “”Notice of Intent to Impose a Financial Penalty”” means a written notice issued by the department to the provider making the provider aware that a financial penalty is pending if the provider does not successfully complete the required corrective action plan within the time specified in the corrective action plan.
    (g) “”Provider”” means an organization or individual providing services to or on behalf of the department or its clients.
    (h) “”Unacceptable Performance”” means provider action(s), or lack thereof, that fails to satisfy the requirements of the contract.
    (3) Penalty Provision. All contracts entered into by the department for services shall contain a notice that penalties shall be imposed for failure to implement or to make acceptable progress on corrective action plans developed as a result of noncompliance, non-performance, or unacceptable performance with the terms and conditions of a contract. Such provisions shall also contain the following:
    (a) A statement that corrective action plans shall be required for noncompliance, nonperformance, or unacceptable performance and penalties shall be imposed for failure to comply with a department approved corrective action plan, unless the Department determines that extenuating circumstances exist.
    (b) The increments of penalty imposition that shall apply, unless the department determines that extenuating circumstances exist, shall be based upon the severity of the noncompliance, nonperformance, or unacceptable performance that generated the need for corrective action plan. The penalty, if imposed, shall not exceed ten percent (10%) of the total contract payments during the period in which the corrective action plan has not been implemented or in which acceptable progress toward implementation has not been made. Noncompliance that is determined to have a direct effect on client health and safety shall result in the imposition of a ten percent (10%) penalty of the total contract payments during the period in which the corrective action plan has not been implemented or in which acceptable progress toward implementation has not been made. Noncompliance involving the provision of service not having a direct effect on client health and safety shall result in the imposition of a five percent (5%) penalty. Noncompliance as a result of unacceptable performance of administrative tasks shall result in the imposition of a two percent (2%) penalty.
    (c) The deadline for payment of a penalty.
    (d) The potential deduction of a financial penalty from the department’s payments to a provider.
    (4) Process. If at any time(s) during the effective contract period, the department gives notice to the provider that its delivery of services is unacceptable or is not in compliance with the terms and conditions of the contract, the department shall request corrective action, in accordance with Florida Statutes § 120.695 The department’s request for corrective action shall identify the incident(s) of noncompliance or unacceptable performance, and be submitted to the provider in writing. The provider, in turn, must submit a corrective action plan upon receipt of the department’s request. The provider’s failure to submit a corrective action plan that is determined acceptable to the department shall be grounds for termination of the contract.
    (5) Source of Funds Available for Payment of Financial Penalty. A provider shall not pay a financial penalty with funds intended to be used, or which are budgeted, to provide services to clients. The provider shall not reduce the amount or quality of services being delivered to clients as a result of the imposition of a financial penalty pursuant to this rule.
    (6) Notice of Intent to Impose a Penalty and Notice of Preliminary Findings of Fact. The department shall give the provider a written notice of its intent to impose a financial penalty, which shall include the following information:
    (a) The factual basis upon which the department determined that a corrective action plan was needed; and,
    (b) A description of the corrective action which was agreed upon between the provider and the department and which was not implemented or satisfactorily accomplished; and,
    (c) The amount of the penalty sought to be imposed.
    (7) Contesting a Penalty. Within twenty-one (21) calendar days of receipt of written notice described in subsection (6), the provider may file written exceptions to the Preliminary Findings of Fact. If no exceptions are timely filed, the department shall adopt such Preliminary Findings of Fact in its Final Order Imposing a Financial Penalty.
    (8) The District Administrator or Regional Director will, in consultation with the Office of the General Counsel, resolve any issues raised by exceptions, if filed, after which the Department may issue a Final Order. The Final Order, if issued, shall require that the penalty be imposed prospectively and be applied to the next invoice submitted. The final order shall require the application of the penalty on all subsequent invoices until the required corrective actions have been implemented. Said Final Order shall be reviewable pursuant to chapter 120, F.S.
    (9) Failure to Pay a Financial Penalty. The department shall deduct the amount of financial penalty from funds that would otherwise be due a provider. This deduction shall not exceed ten percent (10%) of the invoice amount that would otherwise be due such provider for the period in which the corrective action plan has not been implemented or in which acceptable progress toward implementation has not been made. A provider’s failure to include such deductions in a request for payment shall constitute grounds for the department to reject the provider’s request for payment.
    (10) The remedies identified in this rule do not limit or restrict the department’s application of any other remedy available to it in the contract or under law. Furthermore, the remedies described in this rule may be cumulative and may be assessed upon each separate failure in order to enforce provider compliance.
Rulemaking Authority Florida Statutes § 402.73(1). Law Implemented 402.73(1) FS. History-New 4-14-02, Amended 10-3-17, 2-5-18.