STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA HOME HEALTH SERVICES, ) INC., and FLORIDA HOME HEALTH ) SERVICES-WEST, )

)

Petitioner, )

)

vs. ) CASE NO. 80-206

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for hearing before Linda A. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on May 16, 1980, in Tallahassee, Florida. The Petitioners, Florida Home Health Services, Inc. , and Florida Home Health Services-West (hereinafter "Petitioner"), were represented by Richard I. Manas, Esquire, Miami, Florida; and the Respondent, Department of Health and Rehabilitative Services (hereinafter "Department") was represented by Charles T. Collette, Esquire, Tallahassee, Florida.

The issue for determination is whether Petitioner, who is licensed to provide and does provide home health services in Charlotte County out of an office in Sarasota County, is required to obtain a Certificate of Need to create a physical location in Charlotte County out of which it will serve the same area it presently serves. Petitioner presented the testimony of Paul M. Mass and Frank Michael Roberts, and Respondent presented the testimony of Ray Chamlis.

Posthearing memoranda were submitted by both Petitioner and Respondent, and Petitioner submitted a proposed recommended order. To the extent that Petitioner's proposed findings of fact have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence or as having been irrelevant to the issue under consideration herein.

FINDINGS OF FACT

1. Petitioner, a nonprofit corporation, was established in January of 1971 for the express purpose of rendering home health services within the State of Florida. It was approved by the Florida Department of Health and Rehabilitative Services and the then U.S. Department of Health, Education and Welfare (hereinafter "HEW") as a Medicare provider in the spring of 1971. In 1974, Petitioner created a subunit located in Bradenton to provide services in Manatee and Sarasota Counties. In 1975, a subunit was created in Warm Mineral Springs to serve lower Sarasota and Charlotte Counties. Both subunits were duly certified as home health providers by the Department and HEW. Petitioner's Medicare application was accepted as retroactive to October 1, 1975, reflecting the service area of the Warm Mineral Springs subunit to be lower Sarasota and Charlotte Counties. Petitioner has continuously provided home health services

   to Charlotte County on an ever-increasing basis since 1975, which predates both state licensing authority over home health services and the applicability of the Certificate of Need law to home health agencies.

   
   

2. Since the Department has obtained licensure authority over home health services, Petitioner's Warm Mineral Springs subunit is and has been licensed to serve both Sarasota and Charlotte Counties. On September 26, 1979, Petitioner advised the Department that it intended to open an office in Charlotte County out of which it would serve its Charlotte County patients, setting forth the reasons therefor, and requesting the Department's approval far the opening of an office in Punta Gorda, which would be coordinated with Petitioner's subunit in Fort Myers. Subsequent correspondence between the petitioner and the Department revealed that Petitioner's operational costs would most likely be reduced by the opening of the office in Charlotte County and that no change in services provided would occur. Petitioner further indicated that the only change being sought was an organizational change within the geographic areas being served and also indicated that the proposed office in Charlotte County would not be a branch office of any of Petitioner's subunits, but rather would be a full, separate subunit.

   
   

3. On December 26, 1979, the Department advised Petitioner that although Petitioner would remain licensed to provide services to both Sarasota and Charlotte Counties from its Warm Mineral Springs subunit, the establishment of a subunit in Charlotte County would not only require a separate license in Charlotte County, but would also require Certificate of Need review. In that same letter, the Department further advised Petitioner that its determination constituted final agency action. To preserve its rights, Petitioner requested a hearing pursuant to Section 120.57, Florida Statutes. Thereafter, Petitioner submitted a letter of intent to the South Central Florida Health Systems Council, the health systems agency geographically responsible for processing Certificate of Need applications. Petitioner requested that agency's assistance in completing a Certificate of Need application, but was advised that that agency would be unable to assist in processing Petitioner's Certificate of Need application, since Petitioner was already providing services in the area for which the need would necessarily be determined. Petitioner accordingly contacted the Department to advise it that the health systems agency was unable to review the need for services when the services were being provided, and the Department advised Petitioner to go back to the health systems agency for a determination of need.

   
   

4. Between the time that the Certificate of Need law first became applicable to home health agencies and the time that Petitioner communicated to the Department its intent to open an office in Charlotte County, the Department has approved the applications of several home health agencies to establish a subunit without obtaining a Certificate of Need, since the Department considered those agencies to be "grandfathered." The Department authorized Sun Coast Home Health Care to open a subunit in Venice in 1978 without requiring a Certificate of Need, as it permitted Central Florida Home Health Services to open subunits in Putnam County and in Lake County in 1978 without the necessity for obtaining a Certificate of Need prior to licensure. Further, the Department authorized Gulf Coast Home Health Services to open a subunit in Hernando County in 1978 without the necessity of obtaining a Certificate of Need for the reason that services were being provided by that agency to patients in Hernando County prior to May 1, 1976, although that subunit was not opened until 1979. The "grandfather" concept was again applied in a similar situation in the Department's Final Order in Global Home Health Services, Inc. v. Department of Health and Rehabilitative Services, DOAH Case No. 78-1013. No evidence was

   presented by the Department herein in support of its argument that these agencies had all expressed an intent to open a subunit prior to the effective date of the Certificate of Need law applicable to home health agencies.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto pursuant to Sections 120.57(1) and 120.60, Florida Statutes.

   
   

6. The Department received its grant of regulatory authority over home health agencies pursuant to the Home Health Services Act, which became effective on July 1, 1975. Sections 400.461-400.504, Florida Statutes. In view of the fact that many such agencies were already operational within this state, the Legislature included in its new law a "grandfather" clause which provides as follows:

   
   

   Any agency as defined in this act which is in operation as of July 1, 1975, or

   at the time of promulgation of any applicable rules or standards adopted pursuant

   to this act may given a reasonable time, not to exceed 1 year from the date of publication, within which to comply with such rules and standards and obtain a license. Section 400.504, Florida Statutes.

   
   

   By virtue of Chapter 76-201 Laws of Florida, the Legislature added an exception to the "grandfather" clause by adding the following language to Section 400.504:

   
   

   Further, any home health agency operating and providing services in the state and having a provider number issued by the

   U.S. Department of Health, Education and Welfare on or before April 30, 1976, shall not be denied a license on the basis of not having received a certificate of need.

   
   

   No support has been found for the Department's argument that the Certificate of Need referred to in the exception is different than the kind under review in this cause. Although at the time this exception was added, the Certificate of Need law had not yet been applied by the Legislature to home health agencies, the law itself was in existence regarding other kinds of health facilities and health services. This conclusion is buttressed by the fact that the "Certificate of Need" language was not changed in the exception when the Legislature amended the Home Health Services Act, effective July 1, 1977, by requiring that a Certificate of Need be obtained by a home health agency prior to its being licensed by the Department. Section 400.471(3), Florida Statutes.

   
   

7. Also effective July 1, 1977, the Health Facilities and Health Services Planning Act was amended to include home health agencies. Sections 381.493- 381.498, Florida Statutes. By virtue of that amendment, home health agencies are included within the definition of health service providers. That Act defines a Certificate of Need as "a written statement issued by the department evidencing community need for a new, converted, expanded, or otherwise significantly modified . . . health service . . ." Section 381.493(3)(d),

   Florida Statutes. The Act, as amended, requires that a Certificate of Need be applied far and obtained for the establishment of a new home health agency.

   Section 381.494(1)(b), Florida Statutes. Clearly, the Petitioner herein falls without the ambit of the Act since it is neither a new home health agency, nor is its proposed opening of an office within a service area a converted, expanded, or otherwise significantly modified health service. Additionally, the language found in the licensing act establishing a Certificate of Need as a prerequisite to a license is again found within the Certificate of Need law.

   Section 381.495, Florida Statutes. In further relation of the two Acts to each other, it is important to note that the "grandfather" clause, so extensively argued by the parties hereto, is part of the licensure statutes, and not part of the Certificate of Need statutes.

   
   

8. In implementation of the above-cited statutes, the Department has promulgated rules. Although the Legislature only required a Certificate of Need for new home health agencies, the Department's Rule 10-5.04(7), Florida Administrative Code, requires Certificate of Need review for the establishment of a new home health agency or new subunit of an agency. Since this proceeding is not a rule challenge, the validity of that rule must be presumed. However, neither the statute nor the rule requires the Petitioner to obtain a Certificate of Need under the facts presented in this cause.

   
   

9. As set forth above, a Certificate of Need is a prerequisite to licensure, and one can assume that the issuance by the Department of a license for services in a particular county obviates the necessity for obtaining a Certificate of Need, particularly when the services had been rendered in that county both before end after both state licensing requirements and Certificate of Need requirements. The physical office proposed by Petitioners to be opened in Charlotte County constitutes the opening of an office only, and does not constitute a new area of service. The continued rendering of services prior to any statutory regulation and prior to the effective date of Rule 10-5.04(7) establishes a prima facie need for those services. The Home Health Services Act did not contemplate requiring Certificate of Need for existing home Health agencies, nor did it contemplate the distinctions under the regulation as to subunits or field offices where an existing operation covered two or more counties. The procedures suggested by the Department are inapplicable to this situation; and, further, the Certificate of Need concept does not relate to the opening of an additional office within a corporate entity which is already licensed and which is already providing services. It is the provision of home health services and the need for those services within a particular geographic location which the Legislature intended to regulate. Petitioner is not attempting to avoid Certificate of Need review for the establishment of a new home health agency or for the establishment of a new subunit, if any meaning is to be attributed to the term "subunit." A reading of the statutes and regulations involved clearly indicates that the term "subunit" does not mean simply a physical office, but rather includes the services provided in addition to the physical office. In the cause sub judice, any question of need for services is moot, since the service is and has been provided; the need is for a physical office only, and neither the statutes nor the regulations require a Certificate of Need for the simple opening of an office to fit the needs of a specific service area. As amply reflected by the testimony and joint exhibits entered in this cause, petitioner simply seeks to conform its operational structure to its already established service areas in order to better provide those services without the capital expenditures or increase in operational costs contemplated by the statutes.

10. In other words, although petitioner wishes to operate a subunit in Charlotte County, the situation under consideration does not involve the opening of an office followed by the establishment of a clientele and the provision of services from that office; rather, a clientele has been established, the services are and have been provided, and the increased need for those services dictates the opening of an office in the area being served. Neither the statutes nor the applicable rules establish any relevant standards by which need for existing services can he determined. Absent such standards, there exists no legal basis for refusing Petitioner's request. The question of determination of need is moot, since the services are being provided. The only question remaining is the need for an office, and that alone cannot fit the definition of a new subunit.

    
    

11. The Department presented no evidence to distinguish between Petitioner's proposal and the other similar situations wherein the Department waived any Certificate of Need requirements and allowed existing agencies to establish subunits, at least some of which were to be located in counties where services already existed. Moreover, the Department's argument that in those situations the issue involved licensure, and not Certificate of Need requirements and that those agencies expressed their intent prior to the 1977 changes in the Certificate of Need law is simply not supported by any evidence. The issue is not, as argued by the Department, estoppel against the State; rather, the issue is application of the Department's regulations in an evenhanded manner.

    
    

12. It is important to note that this proceeding is not one to determine whether a Certificate of Need should be issued. The issue is whether a Certificate of Need is required, and one is not required under the limited facts of this case. However, it would appear from Rule 10D-68.04(2), Florida Administrative Code, that a separate license would be required for Petitioner's Charlotte County office. Since the provision of services in Charlotte County is licensed through the Warm Mineral Springs subunit in Sarasota County at this time, then the issuance of a separate license for the office in Charlotte County would be merely a ministerial act.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED THAT:

A Final Order be entered authorizing petitioner to open a subunit office for home health services in Charlotte County, Florida, and issuing to Petitioner a separate license for that office if one be required.

RECOMMENDED this day of October, 1980, in Tallahassee, Florida.

LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Charles T. Collette, Esquire Assistant General Counsel Department of Health and

Rehabilitative Services

1323 Winewood Boulevard, Suite 486

Tallahassee, Florida 32301

Richard I. Manas, Esquire Manas and Marcus

804 Greater Miami Federal Building

200 Southeast First Street Miami, Florida 33131

Herbert E. Straughn, Esquire

Office of Community Medical Facilities Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building Two, Room 220 Tallahassee, Florida 32301

Ed Houck, Ph.D.

Executive Director

South Central Florida Health Systems Agency, Inc.

3801 Bee Ridge Road Sarasota, Florida 33582

Mr. Alvin J. Taylor, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32381

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

FLORIDA HOME HEALTH SERVICES, INC., and FLORIDA HOME HEALTH SERVICES-WEST,

Petitioners,

1. DOAH CASE NO. 80-206

   
   

   DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

   /

   
   

   FINAL ORDER

   
   

   The Department of Health and Rehabilitative Services being well advised in the premises hereby adopts the findings of fact of the attached Recommended Order entered in this cause by Hearing Officer Linda M. Rigot, dated October 2, 1980, but rejects the conclusions of law and substitutes the following conclusions:

   
   

   1. The provision of home health services in a county without having a physical office in that county does not constitute a new subunit (physical office) of a home health agency. A hone health agency that serves adjacent counties from a physical office located in the parent county receives only one home health agency license which authorizes the provision of hone health services in the parent county where the physical office is located and the adjacent counties which have been listed on the single license.

      
      

   2. However, a certificate of need and a separate distinct license is required for a home health agency to establish a new subunit (physical office) in a particular county even if the home health agency is already providing home health services in that particular county through a physical office located in the parent county.

      
      

   3. In the instant case, Petitioner had an HEW provider number and was providing hone health services in Charlotte County prior to the time that the licensure and certificate of need laws covered hone health agencies. Sections 361.493-381.499 and 400.501-400.504, Florida Statutes. Therefore, under the limited facts of this case, Petitioner may open a subunit (physical office) in Charlotte County without having to obtain a certificate of need. Section 400.504, Florida Statutes. Therefore, it is

ORDERED that Petitioner is authorized to open a subunit office for home health services in Charlotte County without having to obtain a certificate of need and that a separate license be required for that office.

DONE and ORDERED this 1st day of November, 1980, in Tallahassee, Florida.

ALVIN J. TAYLOR

Secretary

COPIES FURNISHED:

Charles T. Collette, Esquire Robert P. Daniti, Esquire Assistant General Counsel Operations-Management Support Department of HRS Department of HRS

1323 Winewood Boulevard 1323 Winewood Boulevard

Tallahassee, Florida 32301 Tallahassee, Florida 32301

Richard I. Manas. Esquire Manas and Marcus

804 Greater Miami Federal Building

200 Southeast First Street Miami, Florida 33131

Mr. Herbert E. Straughn Office of Community Medical

Facilities Department of HRS

1321 Winewood Boulevard

Tallahassee, Florida 32301

Ms. Linda M. Rigot, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

Mr. Gary J. Clarke

Deputy Assistant Secretary for Health Planning and Development

Department of HRS

1321 Winewood Boulevard

Tallahassee, Florida 32301

Mr. Art Forehand, Administrator

Office of Community Medical Facilities Department of HRS

1321 Winewood Boulevard

Tallahassee, Florida 32301

Ms. Eleanor Beamer, Director

Office of Licensure and Certification Department of HRS

Daniel Building

111 Coastline Drive, East Jacksonville, Florida 32231

Docket for Case No: 80-000206

Orders for Case No: 80-000206