STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMERICANA HEALTHCARE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 77-2243

)

DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, OFFICE ) OF COMMUNITY MEDICAL FACILITIES, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Jacksonville, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on January 23, 1978. The parties were represented by counsel:

APPEARANCES

For Petitioner: Kenneth F. Hoffman, Esquire

Rogers, Towers, Bailey, Jones & Gay Post Office Box 1872

Tallahassee, Florida 32302

For Respondent: Robert M. Eisenberg, Esquire

5920 Arlington Expressway Post Office Box 2417 Jacksonville, Florida 32231

When respondent acted unfavorably on petitioner's application for a certificate of need for a "90 bed long-term skilled care facility", petitioner's exhibit No. 1, petitioner made demand for a fair hearing, in accordance with Rule 10-5.10(8), F.A.C. At the hearing, the parties stipulated that petitioner's application complied with all pertinent requirements except for the criteria set forth in Rule 10-5.11(1), (3), (4) and (6), F.A.C. The parties were in disagreement as to whether petitioner's application complied with these criteria:

(1) The relationship of health services being proposed to the applicable Health Systems plan, Annual Implementation plan, and 1977 State Medical Facilities Plan adopted pursuant to section 1513(b) 1513(b)(3), and 1603, respectively, 0L the [Social Security) Act. [42 U.S.C. Chapter 7]

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1. The need that the population served or to be served has for such proposed health services.

2. The availability of alternative, less costly, or more effective methods of providing such proposed health services.

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(6) The relationship of the proposed health services to the existing health care system within the proposed service area.

Rule 10-5.11(1), (3), (4) and (6), F.A.C.

By stipulation of the parties, the issues at the hearing were limited accordingly.

FINDINGS OF FACT

1. Petitioner proposes to construct a 90 bed long term skilled facility near a hospital complex on University Boulevard in Jacksonville, and to offer beds to medicare patients immediately upon opening the facility Only one of the four existing nursing homes on the east side of the St. Johns River in Jacksonville has medicare certification. The existing nursing home in Jacksonville with the greatest number of vacant beds does not yet have medicare certification.

   
   

2. Petitioner submitted its application for certificate of need on July 1, 1977. Between July 1, 1970, and July 1, 1977, overall occupancy of available nursing home beds in Jacksonville was between 95 and 97 percent. In April of 1977, Riverside Nursing Home had made 58 new beds available, 95 percent of which were occupied within two and a half months, in August of 1977, Riverside Nursing Home made an additional 58 now beds available. The following month 94.4 percent of the beds at Riverside Nursing Home were occupied. On September 19, 1977, a new 180-bed nursing home, Turtle Creek, opened its doors. At the time of the hearing, 82 of Turtle Creek's beds were occupied, although Turtle Creek, which is located on the northern periphery of Jacksonville, had not received medicare certification. Notwithstanding the filling of these new beds, the number of patients in other Jacksonville nursing homes did not decline appreciably. At the time of the hearing, 90.3 percent of all nursing home beds in Jacksonville were occupied, and all authorized beds were available for occupancy. It takes approximately 22 months after the start of construction to make a nursing home like petitioner proposes to build ready for occupancy.

   
   

3. Stays in hospital beds are three or four times more expensive than stays in nursing home beds. At the time of the hearing, some medicare patients were staying in hospitals up to a week and a half after their physicians had authorized their discharge to a nursing home, because beds in medicare certified nursing homes were unavailable. This situation should be ameliorated, at least temporarily, if Turtle Creek obtains medicare certification before its beds are filled by non-medicare patients. On the other hand, social workers employed by Memorial Hospital and Riverside Hospital testified to recently increased numbers of persons requiring placement in nursing homes, upon discharge from their respective hospitals. In the four to six months next preceding the hearing, the number of persons requiring nursing home care when discharged by Memorial Hospital doubled. At the time of the hearing, persons otherwise ready to be discharged from hospitals remained hospitalized for lack of available beds in medicare certified nursing homes.

4. Proximity of nursing homes to their residents' families and friends facilitates visiting, which has a beneficial effect on the health of persons confined to nursing homes. The southeast section of Jacksonville, in which petitioner proposes to construct a nursing home, has a large and growing population. Turtle Creek, which has the biggest block of vacant nursing home beds in Jacksonville, is 15 miles north of petitioner's proposed site.

   
   

5. Relevant portions of the 1977 State Medical Facilities Plan (the Plan) were received in evidence as petitioner's exhibit No. 6. The Plan utilizes projected population increases in Duval County in projecting how many nursing home beds will be necessary in order to accommodate everybody who will need one, at a 90 percent occupancy rate. On this basis, a projected need by 1982, of 1,845 nursing home beds for Duval County was incorporated into the Plan. After adoption of the Plan, but before August 10, 1977, the 1,845 figure was changed to 1,921 at the instance of Lloyd Bulme end Ronald Fehr Floyd, employees 01 the Health Systems Agency of Northeast Florida Area 3, Inc. (HSA). At the time of the hearing, 1,912 or 1,914 nursing home beds, all that had been authorized, were available for occupancy in Duval County.

   
   

6. While embodying projections as to how many nursing home beds would be needed in the future so as to assure a 90 percent occupancy rate, the Plan provides for the possibility of error in these projections. Specifically, the Plan allows for the consideration of "extenuating and mitigating circumstances," including "availability":

   
   

   Availability

   
   

   In those instances whereby a capital expenditure/certificate of need proposal is made for a new or expanded facility and whereby it can be demonstrated and documented by the applicant and verified by the HSA and/or OCMF that:

   
   

   similar facilities in the documented service area have been utilized at an optimum rate (85 percent occupancy for acute general hospitals and 90 percent occupancy for nursing homes) for the previous 12 month period; and,

   
   

   there exists a current, unduplicated waiting list within the documented service area for the services to be offered by the new or expanded facility;

   
   

   these factors will be considered in making a determination on the capital expenditure/ certificate of need proposal.

   Petitioner's exhibit No. 6.

   
   

   In applying the Plan's 90 percent optimum rate formula, the Office of Community Medical Facilities "would certainly consider the open beds, the occupancy during the preceding twelve months of the open, available for use beds, tempered certainly by beds which have been approved but are not yet available." (T1231)

   Fifty-nine of the nursing home beds in Jacksonville require "[m]odernization," according to the Plan.

   
   

7. Petitioner's application for a certificate of need was initially reviewed by a committee" of the HSA. On August 25, 1977, the Health Needs and Priorities Committee voted to recommend approval of petitioner's application, on condition that Jacksonville's nursing homes' occupancy rate not fall below 90 percent for four months once all the authorized nursing home beds became available for occupancy. This consideration was consistent with the local Health Systems Plan's requirement of 90 percent or better occupancy, calculated the basis of all authorized beds, for four months preceding the grant of a certificate of need for additional nursing home beds.

   
   

8. Before the Executive Committee of the HSA acted on the Recommendation of the HSA's Health Needs and Priorities Committee, HSA staff were advised by the Office of Community Medical Facilities in Tallahassee that "December 19, 1977 . . . . [was] the latest possible time for a decision Petitioner's exhibit No. 17. Inasmuch as Turtle Creek began operation on September 19, 1977, only three months before "the latest possible time for a decision," there was not to be a four months' trial with all authorized beds available, before HSA's Executive Committee passed on petitioner's application. Instead, HSA staff calculated the occupancy rate by adding all existing nursing home beds in Jacksonville, and all other authorized nursing home beds expected to become available in Jacksonville, and dividing the sum into the number of occupied nursing home beds in Jacksonville less the number of occupied beds in Regency House Center (because the HSA staff did not have Regency House Center "patient data." Petitioner's exhibit No. 6.) This calculation yielded an occupancy rate of 84.4 percent for the four months preceding the date on which petitioner filed its application. Because 84.4 percent was less than 90 percent called for by the Health Systems Plan, the HSA's Executive Committee disapproved petitioner's application. Subsequently, the Office of Community Medical Facilities also acted unfavorably on petitioner's application, for reasons which the evidence adduced at the hearing did not make entirely clear.

   
   

9. The foregoing findings of fact should be road in conjunction with the statement required by Stuckey's of Eastmam, Georgia v. Department of Transportation, 340 So.2d 119 (Fla 1st DCA 1976) , which is attached as an appendix to the recommended order.

   
   

   CONCLUSIONS OF LAW

   
   

10. Petitioner's application is compatible with respondent's State Medical Facilities Plan in that the occupancy rate for Duval County nursing home beds available for use, during the twelve months preceding petitioner's application, exceeded 90 percent. This is a compelling "extenuating circumstance" because the occupancy rate again reached 90 percent less than six months later, notwithstanding the addition of 238 nursing home beds. The evidence also established persistent difficulty in finding beds in nursing homes with medicare certification, resulting in delays of up to a week and a half for persons seeking such beds. Petitioner met its burden to establish an "unduplicated waiting list," even though no physical list was introduced in evidence. To the extent that State Medical Facilities Plan conflicts with the local Health Systems Plan, the State Medical Facilities Plan takes precedence. Petitioner has demonstrated that its application comports with Rule 10-5.11(1), F.A.C.

    
    

11. The evidence established a "need that the population . . . to be served has for . . . [the] proposed health services." Rule 10-5.11(3), F.A.C.

At the time of the hearing, people were backed up in Jacksonville's hospitals awaiting beds in nursing homes with medicare certification. Because hospitalization is much more expensive than care in nursing homes, the nursing home care petitioner proposes to provide is a "less costly . . . method . . . of providing . . . health services." Rule 10-5.11(4), F.A.C. Petitioner demonstrated that the site proposed in its application is convenient to other medical facilities and is 15 miles distant from the biggest group of unoccupied nursing home beds in Jacksonville. The evidence established that petitioner's application meets the criterion set forth in Rule 10-5.11(6), F.A.C.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That respondent grant petitioner's application for certificate of need. DONE AND ENTERED this 23rd day of March, 1978, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 77-2243

Paragraphs one, two, five, six, seven, nine, ten, eleven, thirteen, fourteen, sixteen, seventeen and eighteen of petitioner's proposed findings of fact accurately report the evidence adduced at the hearing and have been adopted, in substance, insofar as relevant.

Paragraphs three and four and most of paragraph nineteen of petitioner's proposed findings of fact are actually proposed conclusions of law.

Paragraph eight of petitioner's proposed findings of fact overstates slightly the number of existing nursing home beds in Jacksonville. The discrepancy between the Health Systems Plan and the State Medical Facilities Plan was 146 beds for the entire area.

Paragraph twelve of petitioner's proposed findings or fact has been largely rejected. The evidence did not establish that all 35 beds at Regency House Center were probably full. The charges to the state plan were apparently called to the attention of federal bureaucrats in Atlanta. (T254)

Paragraph fifteen of petitioner's proposed findings of fact overstates slightly the number of existing nursing home beds in Jacksonville; end is otherwise supported only by the speculative testimony of one witness.

COPIES FURNISHED:

Kenneth F. Hoffman, Esq. Rogers, Towers, Dailey, Jones & Gay

Post Office Box 1872 Tallahassee, Florida 32302

Robert M. Eisenberg, Esquire 5920 Arlington Expressway Post Office Box 2417 F Jacksonville, Florida 32231

Docket for Case No: 77-002243

Orders for Case No: 77-002243