STATEMENT OF ESTIMATED REGULATORY COSTS JANUARY 2017 PROPOSED RULE 58M-2.009, FLORIDA ADMINISTRATIVE CODE

STATEMENT OF ESTIMATED REGULATORY COSTS JANUARY 2017 PROPOSED RULE 58M-2.009, FLORIDA ADMINISTRATIVE CODE Executive Summary During the 2016 Legislative Session, Governor Scott signed Senate Bill 232, concerning guardianship, into law. The bill expanded and renamed the Statewide Public Guardianship Office within the Department of Elder Affairs ( Department ) as the Office of Public and Professional Guardians ( OPPG ). The impetus behind the passage of Senate Bill 232 occurred in December of 2014 when the Sarasota Herald Tribune published a series of articles titled The Kindness of Strangers Inside Elder Guardianship in Florida, which detailed abuses occurring in guardianships. In response, Senate Bill 232 assigned the OPPG the additional responsibility of regulating professional guardians, who have not previously been closely regulated by the state. Senate Bill 232 directed the OPPG to adopt rules to establish standards of practice for public and professional guardians, receive and investigate complaints, establish procedures for disciplinary oversight, conduct hearings, specify penalties, and take administrative action pursuant to chapter 120, Florida Statutes. The Department initiated rulemaking in April 2016 to develop standards of practice for professional guardians with the goal of providing the level of accountability for Professional Guardians envisioned by Senate Bill 232 without creating unnecessary regulatory cost increases. This Statement of Estimated Regulatory Costs ( SERC ) reflects the costs associated with the Department s proposed rule containing standards of practice for public and professional guardians. I. Introduction Guardianship is a concept whereby a guardian acts for another, called a ward, whom the law regards as incapable of managing his or her own affairs due to age or incapacity. In Florida, a professional guardian means any guardian who has, at any time, rendered services to three or more wards as their guardian. Pursuant to section 744.2002(1), Florida Statutes, all individuals seeking to serve as a professional guardian must first register with the OPPG prior to providing guardianship services to three or more wards. Section 744.2001(2)(b), Florida Statutes, as amended by Senate Bill 232, tasks the Executive Director of the OPPG with establishing standards of practice for professional guardians by rule, in consultation with professional guardianship associations and other interested stakeholders. The OPPG s proposed standards of practice address the following subject matters: 1. THE PROFESSIONAL GUARDIAN S RELATIONSHIP TO THE COURT; 2. THE PROFESSIONAL GUARDIAN S PERSONAL RELATIONSHIP WITH THE WARD; 3. THE PROFESSIONAL GUARDIAN S RELATIONSHIP WITH FAMILY MEMBERS AND FRIENDS; Page 1 of 11

4. THE PROFESSIONAL GUARDIAN S RELATIONSHIP WITH OTHER PROFESSIONALS AND PROVIDERS OF SERVICES TO THE WARD; 5. INFORMED CONSENT; 6. STANDARDS FOR DECISION-MAKING; 7. LEAST RESTRICTIVE ALTERNATIVE; 8. SELF-DETERMINATION OF THE WARD; 9. THE PROFESSIONAL GUARDIAN S DUTIES REGARDING DIVERSITY AND PERSONAL PREFERENCES OF THE WARD; 10. CONFIDENTIALITY; 11. DUTIES OF THE PROFESSIONAL GUARDIAN OF THE PERSON; 12. INITIAL AND ONGOING RESPONSIBILITIES OF THE PROFESSIONAL GUARDIAN OF THE PERSON; 13. DECISION-MAKING CONCERNING MEDICAL TREATMENT BY GUARDIANS OF THE PERSON; 14. DECISION-MAKING CONCERNING WITHHOLDING AND WITHDRAWAL OF MEDICAL TREATMENT; 15. CONFLICT OF INTEREST: ANCILLARY AND SUPPORT SERVICES; 16. DUTIES OF THE PROFESSIONAL GUARDIAN OF THE PROPERTY; 17. PROFESSIONAL GUARDIAN OF THE PROPERTY: INITIAL AND ONGOING RESPONSIBILITES; 18. PROPERTY MANAGEMENT; 19. CONFLICT OF INTEREST: ESTATE, FINANCIAL, AND BUSINESS SERVICES; 20. TERMINATION AND LIMITATION OF PROFESSIONAL GUARDIANSHIP; 21. PROFESSIONAL GUARDIANSHIP SERVICE FEES; and 22. MANAGEMENT OF MULTIPLE PROFESSIONAL GUARDIANSHIP CASES. II. Summary and Effect of the Proposed Rule The standards of practice contained in the proposed rule are intended to provide a level of accountability for professional guardians, while at the same time avoiding the imposition of unnecessary regulations on an industry that serves the state s growing elder and vulnerable adult populations. The subject areas addressed in the proposed standards of practice include a variety of topics, including requirements pertaining to: decision making; the professional guardian s relationship with the courts, their wards, friends and family members of their wards, and other service providers; confidentiality, record keeping; and the professional guardian s duties and obligations to their wards. The Department has determined that the main economic impact of the proposed rule is likely generated through the rule s requirement that professional guardians receive court approval of their guardianship fees and through increased record keeping requirements contained in the rule. Page 2 of 11

It is important to note that, as discussed in section IV, (f), below, the true economic impact of the proposed rule will ultimately be borne by the wards being serviced by the professional guardians to whom the rule applies, as professional guardians are expected to bill the wards they serve for any additional work necessary to comply with the rule s requirements. The proposed rule would, therefore, not have a true adverse impact on small businesses. III. Ratification The Department has determined that the proposed rule will increase regulatory costs (which include transactional costs necessary to comply with the proposed rule) in excess of $1 million in the aggregate within five years after the implementation of the rule. Pursuant to Section 120.541(3), Florida Statutes, the Department shall submit the rule for ratification by the legislature during the next legislative session. IV. Required Components Section 120.541, Florida Statutes, sets forth the requirements that agencies must follow in preparing SERCs. Specifically, section 120.541(2)(a) through (f), Florida Statutes, provides that certain information must be addressed in any SERC. (a) An economic analysis showing whether the rule directly or indirectly: (1) Is likely to have an adverse impact on economic growth, private sector job creation or employment, or private sector investment in excess of $1 million in the aggregate within 5 years after the implementation of the rule; (2) Is likely to have an adverse impact on business competitiveness, including the ability of persons doing business in the state to compete with persons doing business in other states or domestic markets, productivity, or innovation in excess of $1 million in the aggregate within 5 years after the implementation of the rule; or (3) Is likely to increase regulatory costs, including any transactional costs, in excess of $1 million in the aggregate within 5 years after the implementation of the rule. After careful analysis of all available economic data, the Department has determined it is likely that the proposed rule will increase regulatory costs, including transactional costs directly and indirectly related to the proposed rule. A full discussion of the estimated direct and indirect regulatory impact of the proposed rule follows. (b) Provide a good faith estimate of the number of individuals and entities likely to be required to comply with this rule, together with a general description of the types of individuals likely to be affected by the rule. The proposed increases related to court approval of guardianship fees and record keeping is expected to impact professional guardians in the State of Florida. (c) Provide a good faith estimate of the cost to the agency, and to any other state and local government entities, of implementing and enforcing the proposed rule, and any anticipated effect on state or local revenues. Page 3 of 11

The proposed rule does not impose costs related to implementation or enforcement of the rule on either the Department or any other state agency, and it does not affect state or local revenues. The proposed rule requirements regarding court approval of guardianship fees will have a minimal impact on circuit courts around the state as well as clerk and comptrollers offices around the state which have to file, review and maintain all court filings. However, any impact on the circuit courts and clerk and comptrollers offices will be de minimis as 96.47% of professional guardians surveyed by the OPPG report that it is their current practice to seek court approval of their guardianship fees and circuit courts around the state routinely review and approve submitted guardianship fees. (d) Provide a good faith estimate of the transactional costs likely to be incurred by individuals and entities, including local government entities, required to comply with the requirements of the rule. As used in this section, transactional costs are direct costs that are readily ascertainable based upon standard business practices, and include filing fees, the cost of obtaining a license, the cost of equipment required to be installed or used or procedures required to be employed in complying with the rule, additional operating costs incurred, the cost of monitoring and reporting, and any other costs necessary to comply with the rule. The Department has determined that the main economic impact of the proposed rule is likely generated through the rule s requirement that professional guardians receive court approval of their guardianship fees and through the rule s record keeping requirements, as discussed in further detail below. Proposed Increase Related to Guardianship Service Fees The Department conducted a survey of all 506 registered professional guardians in the state to determine the economic impact of subsection (22) (titled Professional Guardianship Service Fees ) of the proposed rule which requires professional guardians to receive court approval of their guardianship fees. Of the 506 registered professional guardians in the state, 83 professional guardians (16%) responded to the survey. Of the respondents, 96.47% indicated that receiving court approval of their guardianship fees is currently part of their standard practices and procedures. This response rate can be explained in part by the statutory interpretation of section 744.108, Florida Statutes, which has led many judicial circuits around the state to decree judicial approval of guardianship fees is required by statute. While section 744.108, Florida Statutes, does not explicitly refer to the professional guardian s requirement to submit billings prior to receiving funds from the estate of the ward, section 744.108, Florida Statutes, provides that guardians are entitled to a reasonable fee (with no indication it is entirely up to the guardian as to what amount is reasonable under the circumstances) and then outlines the criteria considered by the courts when reviewing a guardian s reimbursement request for services rendered and costs incurred on behalf of the ward. Additionally, section 744.446, Florida Statutes, prohibits professional guardians from having any interest, financial or otherwise, in any activity in the guardianship unless prior approval is obtained by the court. Page 4 of 11

Of the 3.53% of respondents who answered that they do not currently seek court approval of their guardianship fees, an increase of approximately three hours per ward, annually, would be necessary to meet the requirement. Pursuant to section 744.108, Florida Statutes, there is no statutory limitation for professional guardian fees; however, some judicial circuit probate courts have implemented a maximum hourly fee for professional guardians as determined by probate court judges. The Department has determined the average professional guardian hourly fee to be $65. 1 The Department has also determined that, for the 506 registered professional guardians in the state, it is not feasible to provide a precise tally for the number of wards affected by the rule, as there are no statutory or rule prohibitions that limit the amount of wards served by a private professional guardian. 2 Additionally, the range of wards served by professional guardians varies if the registration is on behalf of a professional guardian agency with case management staff, or a sole practitioner. According to the Department s survey of all 506 registered professional guardians in the state, the average number of wards served by professional guardians is 13. 3 As stated above, assuming (1) that 96.47% of the 506 registered professional guardians in this state (488 professional guardians) are presently submitting their guardianship fees for approval with the courts and 3.53% of professional guardians in the state are not currently meeting this requirement (18 professional guardians); (2) it will take the estimated 18 professional guardians who are not currently meeting this requirement approximately 3.08 hours per ward annually to comply; (3) the average hourly rate charged by a professional guardians is $65 an hour; and (4) the average ward caseload amongst professional guardians is 13, the Department believes that the proposed rule s requirement that professional guardians receive court approval of their guardianship fees will increase private sector costs by approximately $46,482.44 in the first year of implementation. Based upon a projected annual increase in registered professional guardians of 5% (average increase from 2012-2016) and carrying forward the estimated first year costs in each of the years to follow -- the Department believes that this requirement will increase private sector costs by approximately $516,215.74 over the first five years of implementation of the proposed rule. See attached Appendix. 1 Survey data was collected from 106 registered professional guardians statewide to determine the average hourly fee for professional guardianship services. Additional information used to determine the average hourly fee for professional guardians included a report prepared by Judge Belvin Perry, Jr., Chief Judge for the Ninth Judicial Circuit Court of Florida and Dr. Mark Dickie of the University of Central Florida entitled Economic Analysis of Hourly Earnings in Relation to Statutory Criteria for determining Fees of Professional Guardians. 2 Public guardians appointed by the Department to serve indigent wards with no friends or family willing or able to serve may not exceed the ratio of forty (40) wards per one (1) public guardian staff person without prior department approval, pursuant to s. 744.2103 (7), F.S. 3 Survey data was collected from 83 registered professional guardians statewide to determine the average amount of wards served by respondents. Page 5 of 11

Proposed Increase Related to Informed Consent The Department conducted a survey of all 506 registered professional guardians in the state to determine the economic impact of subsection (6) of the proposed rule concerning Informed Consent. Specifically, the Department evaluated the provision of subsection (6) (titled Informed Consent ) which requires professional guardians to obtain written documentation, if possible, of reports from a ward s family, friends, medical service providers or other professionals relevant to a decision made on behalf of a ward. The preservation of reports submitted to guardians by third parties is necessary to document the basis upon which professional guardians make decisions on behalf of their wards. Of the 506 registered professional guardians in the state, 83 professional guardians (16%) responded to the survey. Of the respondents, 85.71% indicated that this requirement is consistent with their current practices. Of the 14.29% of respondents that stated that they were not maintaining this documentation, an increase of approximately 3.95 hours per ward, annually, would be necessary to meet the requirement. The Department has determined the average professional guardian hourly fee to be $65 and the average number of wards served by professional guardians to be 13. While 85.71% of professional guardians responding to the Department s survey indicated the record keeping requirements contained in the proposed rule related to Informed Consent is currently part of their practice, it is also important to note that the maintenance of any advanced directives containing the preferences of wards concerning healthcare decisions is already required by statute. Specifically, section 744.3115, Florida Statutes, requires the court to determine whether wards, prior to incapacity, have executed any advance directives. For the purposes of informed consent, advance directives include, but are not limited to, a living will, power of attorney or durable power of attorney, trust, and healthcare surrogate. While the proposed rule would require an expansion of reporting requirements for professional guardians, it is the responsibility of the professional guardian by statute to ensure that the ward is involved to the greatest extent possible with decision-making, including any previously executed advance directives. As stated above, assuming (1) that 85.71% of the 506 registered professional guardians in this state (approximately 437 professional guardians) are currently meeting the documentation requirements contained in section (6) of the proposed rule concerning Informed Consent while 14.29% of professional guardians (approximately 69 professional guardians) are not meeting this requirement; (2) it will take the estimated 69 professional guardians that are not currently meeting this requirement approximately 3.95 hours per ward annually to comply; (3) the average hourly rate charged by professional guardians is $65 an hour; and (4) the average ward caseload amongst professional guardians is 13, the Department believes that the documentation requirements contained in section (6) of the proposed rule concerning Informed Consent will increase private sector costs by approximately $241,352.70 in the first year of implementation. Based upon a projected annual increase in registered professional guardians of 5% (average increase from 2012-2016) and carrying forward the estimated first year costs in each of the years to follow -- the Department believes that this requirement will Page 6 of 11

increase private sector costs by approximately $1,570,732.33 over the first five years of implementation of the proposed rule. See attached Appendix. Proposed Increase Related to Initial and Ongoing Responsibilities The Department conducted a survey of all 506 registered professional guardians in the state to determine the economic impact of subsection (13) of the proposed rule concerning Initial and Ongoing Responsibilities. Specifically, the Department evaluated the provisions of subsection (13) which requires professional guardians to maintain a separate file for each ward including the following documentation: (1) the ward s name, date of birth, address, telephone number, Social Security number, medical coverage information, physician diagnoses, medications, and allergies to medications; (2) all legal documents involving the ward; (3) advance directives; (4) a list of key contacts; (5) a list of service providers, with contact information, descriptions of the services provided, and any related progress/status reports; (6) a list of all medication the ward is taking, along with dosage information, name of prescribing physician, and a description of the reason(s) the medication is being taken; (7) the ward s initial guardianship plan, and all annual plans; (8) any initial inventories and accountings, when applicable; (9) documentation of the ward s known values, lifestyle preferences, and known wishes regarding medical and other care and service; and (10) documentation of any goals or preferences expressed by the ward that have been made known to the professional guardian and would require the expenditure of the ward s assets in excess of $1,000.00, and the time, date, location and individuals present when said goal or preference was expressed by the ward. Of the 506 registered professional guardians in the state, 83 professional guardians (16%) responded to the survey. Of the respondents, 84.34% indicated that these requirements are consistent with their current practices. Of the 15.66% of respondents that stated that they were not maintaining this documentation, an increase of approximately 4.96 hours per ward annually would be necessary to meet the requirement. The Department has determined the average professional guardian hourly fee to be $65 and the average number of wards served by professional guardians to be 13. As stated above, assuming (1) that 84.34% of the 506 registered professional guardians in this state (approximately 427 professional guardians) are currently meeting the documentation requirements contained in section (13) of the proposed rule concerning Initial and Ongoing Responsibilities, while 15.66% of professional guardians (approximately 79 professional guardians) are not meeting this requirement; (2) it will take the estimated 79 professional guardians that are not currently meeting this requirement approximately 4.96 hours per ward annually to comply; (3) the average hourly rate charged by professional guardians is $65 an hour; and (4) the average ward caseload amongst professional guardians is 13, the Department believes that the documentation requirements contained in section (13) of the proposed rule concerning Initial and Ongoing Responsibilities will increase private sector costs by approximately $332,110.69 in the first year of implementation. Based upon a projected annual increase in registered professional guardians of 5% (average increase from 2012-2016) and carrying forward the estimated first year costs in each of the years to follow -- the Department believes that this Page 7 of 11

requirement will increase private sector costs by approximately $2,117,587.73 over the first five years of implementation of the proposed rule. See attached Appendix. In accordance with section 744.367(3), Florida Statutes, the annual guardianship report of a guardian of the property must consist of an annual accounting, and the annual report of a guardian of the person must consist of an annual guardianship plan. While there is no current standardization for annual plan and annual accounting requirements within the judicial circuits, section 744.367(3), Florida Statutes, requires guardians of the property to account for, at a minimum, the following: income and disbursements; assets and liabilities; real property; encumbrances; sales; trusts; annuities; life insurance policies; disability policies; long term care policies; and information regarding estate agents, address of property, information on the sale or purchase of any property, and any secured or unsecured liabilities. Section 744.367(3), Florida Statutes, also requires guardians of the person to account for, at a minimum, the following: information and location of the ward, including all places of residence during the past 12 months; the professional guardian s assessment for the best residential setting for the ward; attendance at care plan meetings; the number of visits to the ward by the professional guardian (by quarter); a description of the medical and/or mental health treatment provided to the ward during the preceding 12 months; medications, personal care, social recreation, doctors visits, and Baker Acts of the ward; a rating for the functioning of the ward in activities of daily living (ADL); any insurance, governmental benefits, private benefits, etc. that the guardian utilized to meet the costs for treatment of the ward; recommendations for rights restoration; and an annual report from a treating physician. While the proposed rule will have an economic impact on professional guardians, documentation of the aforementioned areas is, at a minimum, necessary for guardians to meet the statutory requirements for reporting. (e) Provide an analysis of the impact on small businesses as defined by section 288.703, Florida Statutes, and an analysis of the impact on small counties and small cities as defined in section 120.52, Florida Statutes. The impact analysis for small businesses must include the basis for the agency s decision not to implement alternatives that would reduce adverse impacts on small businesses. Section 288.703(6), Florida Statutes, defines small business as an independently owned and operated business concern that employs 200 or fewer permanent full-time employees and that, together with its affiliates, has a net worth of not more than $5 million or any firm based in this state which has a Small Business Administration 8(a) certification. As applicable to sole proprietorships, the $5 million net worth requirement shall include both personal and business investments. Data made available to the Department indicates that the vast majority of professional guardians qualify as small businesses pursuant to Part IV, Chapter 288, Florida Statutes, which means that the cost associated with the proposed increases related to the requirement that professional guardians receive court approval of their guardianship fees and the rule s record keeping requirements would primarily be borne by small businesses. After holding two rule workshops and a rule hearing, the Department has concluded that Page 8 of 11

there are no alternative approaches to the proposed rulemaking that would reduce the adverse impact on small businesses. There will be no impact on small counties or small cities as defined in section 120.52, Florida Statutes. (f) Provide any additional information that the agency determines may be useful. While the Department has determined that the proposed rule will have an economic impact on small business; it is important to note that professional guardians are expected to bill wards served for the additional work necessary to meet the proposed rule s requirements. As such, the proposed rule would not have an adverse impact on small business, rather a direct cost to wards served. Additionally, while the cost to individual wards will increase as a direct result of the proposed rule, the legislative intent of the creation of the Office of Public and Professional Guardians is to ensure the health, safety, and wellbeing of wards under guardianship. As such, it is necessary for the Department to impose rule requirements for standardization of record keeping and reporting by professional guardians. The Department anticipates that the professional guardians that stated that the proposed rule requirements are not currently part of their practice will have a higher cost of meeting the requirements during the first year, but the cost will decrease with the implementation of guardianship filing and documentation practices. It is also important to note that while the Department has projected a 5% increase in registered professional guardians over the next 5 years, the yearly registration of professional guardians has not been growing consistently at a constant rate. From 2012-2013, the Statewide Public Guardianship Office noted a decrease in registrations by 1.5% from the previous year. Furthermore, the Department also anticipates a decrease in registered professional guardians from the statutory authority to implement disciplinary action for professional guardians not meeting statutory or rule requirements. (g) Provide a description of any regulatory alternatives submitted under paragraph 120.541(1)(a), Florida Statutes, and a statement adopting the alternative or a statement of the reasons for rejecting the alternative in favor of the proposed rule. No lower cost regulatory alternative to the proposed rule has been submitted to the Department. Page 9 of 11

Appendix Rule Citation 2017 Estimated Implementation Costs Is this currently part of your Practice Yes%/No% Average Hours to Complete # of Guardians Affected * Total Cost to Implement Per Guardian ** (6)(d) Informed Consent - See section IV(d), above (13)(3)(b) Initial & Ongoing Responsibilities - See section IV(d), above (22)(a) Professional Guardianship Service Fees -- See section IV(d) above 85.71% 14.29% 3.95 72.31 $241,352.70 84.34% 15.66% 4.96 79.24 $332,110.69 96.47% 3.53% 3.08 17.86 $46,482.44 Total $619,945.83 * # of Guardians Affected = [Total Florida Guardian Population]*[% of Population Not Currently Implementing Rule] ** Total Cost to Implement = [Average Case Load]*[Average Guardian Hourly Rate]*[Hours to Complete Rule Per Ward]*[# Of Guardians Affected] Calculation Factors Total Florida Guardian Population 506 Average case load 13 Avg. Hourly Rate. $65.00 Page 10 of 11

Five-Year Projection Projected Estimated Cost Per Guardian Per Year * 2017 2018 2019 2020 2021 Total for 2017-2021 (6)(d) Informed Consent - See section IV(d), above $241,352.70 $325,797.78 $330,020.03 $334,453.40 $339,108.43 $1,570,732.33 (13)(3)(b) Initial & Ongoing Responsibilities - See section IV(d), above (22)(a) Professional Guardianship Service Fees - - See section IV(d), above 332,110.69 438,148.05 443,449.92 449,016.88 454,862.19 2,117,587.73 46,482.44 112,328.22 115,620.51 119,077.41 122,707.16 516,215.74 Total Cost Per Year $619,945.83 $876,274.05 $889,090.46 $902,547.69 $916,677.78 $4,204,535.80 * Projected costs of implementation by new registered guardians = [Average Case Load]*[Average Guardian Hourly Rate]*[Hours to Complete Rule Per Ward]*[# Of New Guardians] 2018 2019 2020 2021 Projected Registered Guardian Population 531.30 557.87 585.76 615.05 # of New Registered Guardians per year ** 25.30 26.57 27.89 29.29 ** Assumes a 5% increase in guardians per year. Rule Citation (6)(d) Informed Consent - PG's shall have a clear understanding of the issue, the options, expected outcomes, risks & benefits of each alternative. (13)(3)(b) Initial & Ongoing Responsibilities - File for each Ward with their personal, medical, legal & collateral info.; progress notes, lifestyle preferences, etc. Avg Hrs to Complete 3.95 Calculation Factors Total Florida Guardian Population 4.96 Average case load 13 506 (22)(a) Professional Guardianship Service Fees 3.08 Avg. Hourly Rate. $65.00 Page 11 of 11