STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COUNTRYSIDE HEALTH SERVICES, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 83-3083

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

and )

) GULF COAST HOME HEALTH SERVICES, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly assigned Hearing Officer, K.N. Ayers, held a public hearing in the above-styled case on July 18, 1984, at Clearwater, Florida.

APPEARANCES

For Petitioner: Robert A. Weiss, Esquire

Suite 101, The Perkins House

118 Gadsden Street Tallahassee, Florida 32301

For Respondent: Douglas L. Mannheimer, Esquire

Post Office Drawer 11300 Tallahassee, Florida 32302

For Intervenor: Leonard A. Carson, Esq. and

Robert P. Daniti, Esquire Cambridge Centre

253 East Virginia Street Tallahassee, Florida 32301

By Petition for Formal Administrative Hearings Countryside Health Services, Inc., (CHS), Petitioner, contests the denial of its application for a certificate of need t operate a Home Health Agency, by the Department of Health and Rehabilitative Services (DHRS), Respondent. Subsequent thereto Gulf Coast Home Health Services, Inc. (GCHHS), was granted leave to intervene in opposition to the granting of the requested certificate of need.

At the commencement of the hearing the parties stipulate that of those criteria included in Section 381.494(6)(c) only (1), (2), (4), and (8) were at issue in these proceedings.

Thereafter, Petitioner called two witnesses, Intervenor called three witnesses, Respondent called one witness, and eleven exhibits were admitted into evidence.

Proposed findings submitted by the parties, to the extent incorporated herein, are adopted; otherwise, they are rejected as not supported by the evidence, immaterial, or unnecessary to the results reached.

FINDINGS OF FACT

1. CHS is an existing provider of home health care services in Pasco and Pinellas Counties, HRS District V, and has provided such services since 1981. CHS offers a wide range of nursing services including nurses specializing in

   I.V. therapy, oncology, geriatrics, obstetrics, pediatrics, and orthopedics; licensed practical nursing services; nursing assistants; home health care aides; and respiratory therapy services n the home. These services are offered solely to private payors.

   
   

2. Only home health care providers who have been issued certificates of need are licensed and eligible to serve Medicare and Medicaid patients whose care is paid for under whose programs. CHS is applying for a certificate of need in order to be eligible to provide home health care which is paid for pursuant to Medicare and Medicaid procedures.

   
   

3. At the time CHS' application was first considered Respondent found the application not to meet the requirements of a need methodology rule which was subsequently declared invalid. The present denial is alleged to be bared solely on statutory criteria.

   
   

4. CHS presented one expert witness who calculated need for additional home health care services using a formula suggested by he U.S. Department of Human Services but which was never adopted as a rule by any agency. Pursuant to this formula, which takes into consideration the projected population of the service area, the age cohorts of the population, the population's historical and projected utilization of home health and related services, he service area's hospital discharge rate, and nursing home utilization data, an unmet need for services for 62,541 potential home bed health care patients in 1985, with 13,960 in Pasco and 49,581 in Pinellas Counties, was found.

   
   

5. Based on the historical utilization of home health area services by patients in District V, the existing licensed home health agencies, of which there are 12, are projected to serve 25,424 patients in 1985 Exhibit 3). This would leave a potential unmet need for some 28,000 patients in District V. However, serious questions were raised as to the efficacy of the assumption in the formula since this methodology was never adopted by the U.S. Department of Health and Human Services, has not been tested by empirical verification, and the definition of home health services used in this formula is not limited to part-time or intermittent services.

   
   

6. Home health care providers differ from other medical care providers principally in the fact that the capital outlay in establishing home health care is minimal. This is so because such care is personal service oriented with little tangible property required. As an example, CHS employs some four or five full-time employees and maintains a list of approximately 350 nurses and aides that can be called to provide the home health care services needed.

   Accordingly, there is no large fixed payroll to meet when work is slack and services can be increased by any home health care provider simply by employing

   nurses as the jobs arrive and stop their pay when the care is no longer needed. There is no large overhead to be concerned with in this type operation.

   
   

7. CHS is financially capable and has the personnel resources to provide the proposed service. CHS has a line of credit with a commercial bank of

   $100,000, has the organizational ability to operate as a home health care provider, and has personnel available to provide all services needed. CHS proposes to serve all Medicaid patients who apply for services and to provide services throughout District V as needed.

   
   

8. No evidence was presented that patients needing home health care are unable to get such care from existing providers. CHS presently serves private pay patients and holds itself out as able to provide all home health care required within District V. No evidence was presented that those 12 licensed home health care providers in District V are unable to provide all authorized Medicare and Medicaid home health care needed. Since any of them can increase the availability of services simply by employing additional personnel to provide such services as needed actual need for additional certificate of need holders will be difficult to prove. CHS presented evidence that when its private pay patients who are Medicare eligible are hospitalized and subsequently discharged from the hospital needing home health care, the hospital usually refers these patients to a licensed home health care provider who can be compensated by Medicare. This results in CHS losing these patients.

   
   

9. Home health care providers get approximately one-half of their patients referred to them by a doctor and one-half referred by a hospital. This ratio is accurate for Petitioner and for the licensed home health care providers The advent of diagnostic relate groupings (DRGs) could impact on home health care providers, but no evidence was presented (if available) of the actual impact DRGs will have on nursing homes or on home health care providers.

CONCLUSIONS OF LAW

10 The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, those proceedings.

1. Those criteria in Section 381.494 (f)(c), Florida Statutes, which the parties stipulated as being the only contested criteria are:

   
   

   1. The need for the health care facilities

      ...being proposed in relation to the appli- cable district plan and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circumstances which pose a threat to the public health.

   2. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of

      like and existing health care services

      and hospices in the service district of the applicant.

      4. The availability and adequacy for other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services, which

      may serve as alternatives for the health care facilities and services to be provided by the applicant.

      8. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; the effects the project will have on clinical needs of health professional training programs in the service district; the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in a limited number of facilities; the availability of alternative uses of such resources for the provision of other health services; and the extent to which the proposed ser- vices will be accessible to all residents of the service district.

      
      

2. Here, there is no district plan or state health plan providing for home health care facilities or a rule in existence which provides criteria for determining need of additional home health care facilities

   
   

3. There are 12 licensed health care providers in District V. No evidence was submitted as to the number of unlicensed home health care providers extant in District V other than there are numerous such providers. No evidence was submitted that the existing providers are unable to meet the needs in District V, either in availability, quality of care, efficiency, appropriateness, accessibility, or extent of utilization. Two such providers testified the were able to serve many more patients than they are presently serving.

   
   

4. Subparagraph 4 above-quoted deals with alternative care to that proposed by the applicant and alternative care is generally considered to be less expensive care or comparable care. In construing this criteria, the availability of hospital or nursing home beds is not considered; however, no evidence was submitted that there is a shortage of those facilities in District

   V. In fact, no evidence was submitted regarding the availability of alternative treatment to that offered by home health care providers.

   
   

5. With respect to subparagraph 8, Petitioner has the available resources, management and personnel to provide the proposed services.

   
   

6. Here, the burden is on the Petitioner to prove, by a preponderance of the evidence, that a need exists for the proposed home health care facility. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977) . This burden has not been met.

   
   

7. From the foregoing, it is concluded that Countryside Health Services, Inc., has failed to show a need exists in DHRS District V for another home health care provider. It is

RECOMMENDED the application of Countryside Health Services, Inc., for a certificate of need to operate as a home health care provider in Pinellas and Pasco Counties, Florida, be DENIED.

ENTERED this 24th day of September, 1984, at Tallahassee, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1984.

COPIES FURNISHED:

Douglas L. Mannheimer, Esquire CULPEPPER, TURNER & MANNHEIMER

Post Office Drawer 11300 Tallahassee, Florida 32302-3300

Leonard A. Carson, Esquire Robert P. Daniti, Esquire Cambridge Centre

253 East Virginia Street Tallahassee, Florida 32301

Robert A. Weiss, Esquire Suite 101, The Perkins House

118 North Gadsden Street Tallahassee, Florida 32301

David H. Pingree, Secretary Department of Health and

Rehabilitative Services 1321 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 83-003083

Orders for Case No: 83-003083