v. ) CASE NO. 84-0260
Respondent. )
Upon due notice this cause came on for final formal hearing before Ella Jane P. Davis, the duly assigned Hearing Officer of the Division of Administrative Hearings on September 18, 1985, in Tallahassee, Florida.
For Petitioner: Mark W. Hoffman, Esquire
For Respondent: R. Bruce McKibben, Jr., Esquire
Petitioner presented oral testimony of John Kane, operational director for Eden Park Management, Inc. Petitioner's Exhibits 1, 2, 3, 5, 6, 10 and 11 were admitted in evidence. Respondent presented the oral testimony of Reid Jaffe, its internal expert in health planning. Respondent's Exhibits 1 and 2 were admitted in evidence.
Petitioner Eden Park filed an application for certificate of need (CON) with Respondent, Department of Health and Rehabilitative Services (DHRS) to construct a 120 bed nursing home in Martin County, Florida. This application was denied and the appropriate proceedings pursuant to Section 120.57(1) Florida Statutes commenced. This case has been continued a number of times at Petitioner's request and with the acquiescence of Respondent. At the final formal hearing Petitioner submitted revisions and amendments to its application by way of Petitioner's Exhibits 1 and 2, admitted without objection. This application seeks a CON to construct a 60 bed addition to its existing Stuart Convalescent Center facility in Stuart, Martin County, Florida, and it has been considered in the course of these de novo proceedings.
Whether or not Petitioner qualifies for grant of a certificate of need (CON) for construction of a 60 bed addition to its existing Stuart Convalescent Center nursing home facility in Stuart, Martin County by establishing a bed need of 60 beds. By stipulation, bed need is the only issue to be determined in these proceedings.
The parties joined in filing transcript of the proceedings on October 10, 1985, and by stipulation, proposed findings of facts and conclusions of law as well as supporting memoranda were timely filed by each party within 20 days thereof. Due to the extended period agreed upon, the 30 days for entry of this Recommended Order has been waived. All proposed findings of fact have been considered in preparation of this Recommended Order and each proposed finding of fact is ruled upon in the appendix hereto.
Petitioner Eden Park is a for-profit corporation which constructs and operates nursing homes in Florida and elsewhere. Its principal offices are located in the state of New York and its local office is located in Port St. Lucie, St. Lucie County, Florida.
Eden Park demonstrated that all of its facilities in Florida are currently rated "superior" by the DHRS Office of Licensure and Certification. This indicates at least peripherally that current nursing home residents at existing Eden Park facilities, including Stuart Convalescent Center in Martin County, receive a high quality of care.
Eden Park's amended application contemplates adding 60 nursing home beds to its Stuart Convalescent Center, in Stuart, Martin County. Stuart Convalescent Center is the only licensed nursing home within the City of Stuart.
Martin County constitutes a sub-district within DHRS District IX. St. Lucie County, is in the same DHRS District as Martin County, but is a separate and distinct sub-district as mandated by Rule 10-17.021(1)(b) and (e) Florida Administrative Code.
Eden Park currently operates a nursing home in the City of Port St. Lucie, St. Lucie County, which it maintains has an overflow of patients and a waiting list which needs to be absorbed by the proposed addition to its Stuart Convalescent Center in Martin County. The two counties are contiguous and it is possible for persons residing in St. Lucie County near the county line to be closer, physically, to Petitioner's existing Martin County facility than to Petitioner's existing St. Lucie County facility. The Cities of Stuart, Martin County and Port St. Lucie, St. Lucie County are also characterized as physically contiguous cities.
Petitioner presented no evidence to show that any existing nursing homes in St. Lucie County other than its own St. Lucie County facility had waiting lists. Petitioner presented no evidence to clearly establish that the patients on the Petitioner's St. Lucie County facility's waiting list could not be placed at other nursing homes in St. Lucie County. (See discussion of waiting lists infra.) Respondent presented testimony that two recent certificates of need have been granted in St. Lucie County to two other nursing
home applicants, Beverly Enterprises and Florida Convalescent Centers. These facilities are not yet licensed and in operation nor are they required by their certificates of need to locate in any designated physical location within St.
Lucie County. However, it is anticipated by DHRS personnel that completion of these facilities will adequately accommodate any nursing home bed need currently existing in St. Lucie County.
Exhibit P-6, the Stuart Convalescent Center Martin County May 29, 1985 Census, shows 131 beds occupied by Martin County residents, 12 by St. Lucie County residents, 31 by residents of other Florida counties and 6 by patients originating out of state.
Out of state patients are not calculated, and Florida patients from outside Martin County are not considered in the present calculation of bed need employed by DHRS for Martin County but Florida patients from outside Martin County are considered in bed need determinations for the counties in which they reside. For instance, the bed need of St. Lucie County residents has been calculated and provided for by the two nursing home CONs as recently issued for that sub-district and discussed above in paragraph 6.
A CON was issued to Beverly Enterprises in 1982 for 120 new nursing home beds in Martin County. As of the date of formal hearing, these beds had been licensed and the nursing home was in operation. Although Mr. Kane, operational director for Eden Park Management, testified that the Beverly facility was only about one-fourth full at the time of formal hearing, he conceded that the Beverly facility would have an impact on Petitioner's Stuart Convalescent Center facility's waiting list although it has not impacted yet. Mr. Kane represents that the Beverly home is not presently taking Medicaid or Medicare patients. The predicate for Mr. Kane's knowledge on this point is weak, but even if it could be accepted, it does not, in isolation, provide any gauge of unfulfilled bed need in Martin County. Mr. Jaffe testified that Beverly's CON carries the proviso that Beverly must maintain one-third Medicaid occupancy when filled. Mr. Kane's testimony is accepted that historically Petitioner's Martin County facility has maintained a 50 percent Medicaid and Medicare population.
Testimony of Respondent's expert, Reid Jaffe, is accepted that poverty level in a sub-district such as Martin County in relationship to its district, District IX, does not impact on the current bed need methodology established by rule and that the relevant factor is poverty level in the district in relationship to the state poverty level.
Petitioner's existing St. Lucie County and Martin County nursing homes currently have a combined waiting list of 80 persons. For the Martin County facility, it is more like 32 on the waiting list (P-5). However, this waiting list's accuracy is suspect in that it includes persons hospitalized since December, 1984 and Mr. Kane could not state that the lists were correct, or whether the people on them were still hospitalized, at home, or exactly where they were. More recent data appears on P-3 (Eden Park's St. Lucie County facility's waiting list) but it shares the same paucity of in formation on the status of the listees and what other nursing home options are or are not available to them.
Petitioner was previously granted three separate 60 bed projects, an original and two additions to its St. Lucie County facility. It took three months to fill the first 60 beds, two months to fill the second 60 beds and three and one half months to fill the next 60 beds. Past fill rate in St. Lucie
County appears largely irrelevant, even given Petitioner's argument on the contiguous nature of the sub-districts. Petitioner appears to argue in its proposals that these additions were to its Martin County facility (Stuart Convalescent Center) but that is not what the undersigned understands from the testimony in the record (TR 48-51). Moreover, this rate of fill occupancy in 1978 has no probative value for currently projected future bed need whether it applied in St. Lucie or Martin Counties. Contrariwise, Petitioner's amended application (P-1) indicates the Stuart Convalescent Center was built for 120 beds in 1973 with a 60 bed addition in 1976 and that the St. Lucie County facility was built for 180 beds in 1980. In conjunction with Mr. Kane's testimony, this latter date also has no probative value for currently projected future bed need in Martin County.
Martin Memorial Hospital is located in Martin County in near proximity to Petitioner's existing nursing facility, Stuart Convalescent Center. DHRS has recently granted a certificate of need to Martin Memorial Hospital for 150 hospital beds. Petitioner desires that the inference be drawn from the foregoing fact regarding new hospital beds that a need for 60 additional nursing home beds is established, but the two cannot be related as a quid pro quo.
Petitioner is in the process of constructing a 150 unit adult congregate living facility (ACLF) in Martin County, which it proposes will provide an alternative to existing services in Martin County. Mr. Jack Kane testified that the Eden Park ACLF will foster the most efficient use of services allowing people to be cared for in the most appropriate setting based upon their individual needs especially as these needs change in the continuum of care.
This testimony is accepted but it does not, without some statistical evaluation or projection of potential nursing home candidates arising out of that ACLF environment, provide any useful information for determining current nursing home bed need or even for projecting, per the formula established by rule, the future nursing home bed need in Martin County.
Jack Kane served seven years as the director of the Palm Beach Health Planning Council, was president of the Florida Health Care Association for a period of two years, served as senior vice-president for the Florida Health Care Association for two years and as regional vice-president for five years. Mr. Kane testified to a number of factors which, during his tenure on the Palm Beach Health Planning Council, would have been applicable to the bed need formula used then. A process or formula applicable on a local basis prior to adoption of the present statewide system and prior to the present rule's adoption is not applicable in this instant proceeding. Here, there is no evidence of current revised sub-district designations by a local health council within either sub- district or even within District IX which have not already been accounted for by the rules. (See discussion in Conclusion of Law Paragraphs 8a-d).
Determination of nursing home bed need used to be on a beds-per- thousand basis but the new methodology now precludes that formula. The present formula application, as clarified by expert testimony from Mr. Reid Jaffe, medical facilities coordinator for DHRS's Office of Community Medical Facilities, only permits application of a 27 beds-per-thousand formula if two events exist: the district percentage of elderly in poverty is greater than that which the state has and there are fewer beds than 27 per thousand. A poverty ratio was not established sufficient to bring Martin County within this rule. Any further discussion of the bed need rule is more properly discussed under the following conclusions of law.
Although a specific location of facility is requested on the CON application there is no statutory requirement that the facility, as constructed, be located there.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause.
Petitioner contends that all of Sections 381.493 and 381.494 Florida Statutes, more specifically Sections 381.493(20), 381.494(6)(c)5, 381.494(6)(c)8 and 381.499, must be applied in determining bed need in Martin County. These statutes have been considered but Rules 10-5.11(21) and 10-17.021 Florida Administrative Code have been adopted to implement those statutes statewide.
The specific sub-paragraph provisions which are at issue are Rules 10- 5.11(21)(c) and Rule 10-5.11(21)(b)10.
Rule 10-5.11(21)(c) provides for sub-districts:
(c) Subdistrict Need Determination.
The Department shall use the subdistrict designation shown in Rules 10-17.013 through 10-17.023 for Districts
1 through 11 respectively in making certificate of need determinations.
Rule 10-5.11(21)(b) 10 sets out exceptional circumstances which may be considered:
10. In the event that the net bed allocation is zero, the applicant may demonstrate that circumstances exist to justify the approval of additional beds under the other relevant criteria
specifically contained in the Department's Rule 10-5.11. Specifically, the applicant may show that persons using existing and like services are in need of nursing home care but will be unable to access nursing home services currently licensed or approved within the subdistrict. Under this provision, the applicant must demonstrate that those persons with a documented need for nursing home services have been denied access to currently licensed but unoccupied beds or that the number of persons with a documented need exceeds the number of licensed unoccupied and currently approved nursing home beds. Existing and like services shall include the following as defined in statute or rule, adult congregate living facilities, adult foster homes, homes for special services, home health services, adult
day health care, adult day care, community care for the elderly, and home care for the
elderly. Patients' need for nursing home care must be documented by the attending physicians' plans of care or orders, assessments performed by staff of the Department of Health and Rehabilitative Services, or equivalent assessments performed by attending physicians indicating need for nursing home care. (Emphasis supplied)
Martin County constitutes sub-district 2 within DHRS District IX. St. Lucie County is in the same DHRS District as Martin County, but is a separate and distinct subdistrict 5, as mandated by Rule 10-17.021(1)(b) and (e) Florida Administrative Code, respectively.
Respondent's theory of the case is that no indicators of bed need in St. Lucie County are relevant to bed need in Martin County due to this sub- districting rule. Petitioner argues that population mobility should be considered.
Nursing home bed need, as determined by application of the formula/methodology set out in the remaining subparagraphs of Rule 10-5.11(21), is crucial to Petitioner's qualifying for its proposed CON. The only expert testimony (Reid Jaffe's) concerning implementation of this bed need formula/methodology corroborates that no nursing home beds are currently needed in Martin County and that need in each county (St. Lucie and Martin) is already assessed by the rule and provided for by previously issued CONs and existing nursing homes. This expert testimony has been accepted as there is no competent substantial evidence to refute it.
Petitioner insists that strict adherence to the need methodology established by rule creates an unequal and unjust application of the rule when applied in each and every situation, but Petitioner specifically does not argue that the rule is invalid. Even if such an argument had been made, this is not a rule challenge proceeding pursuant to Section 120.54(4) or 120.56(1) Florida Statutes.
Petitioner asserts that application of the rule to Petitioner and to Martin County is a denial of the constitutional rights of due process and equal protection. Without fully addressing the absence of application of those rights to other than natural persons or the waiver of Petitioner to assert a rule challenge, it is sufficient to merely note that the Division of Administrative Hearings is not the appropriate forum to resolve constitutional issues.
The close proximity of St. Lucie County to Petitioner's Stuart Convalescent Center facility in Martin County, the mobility of nursing home populations across county lines, and even the indication that the "draw" of a significant minority of Stuart Convalescent Center's population from St. Lucie County are viable issues which might, absent some statute or rule mandating to the contrary, be considered as "exceptional circumstances." However, under Rules 10-5.11(21)(c) and 10-17.021(1) Florida Administrative Code, there is a contrary mandate.
Moreover, most of Petitioner's support for its propositions arise from documents Mr. Kane "picked up" at various county offices. These documents, being nothing more than uncorroborated hearsay and the figures contained therein being created outside the rule to be applied, have not been entered in evidence.
Other support for Petitioner's propositions arising from the documents actually admitted in evidence is very shallow, particularly as they seem to compare only two of Petitioner's nursing homes with each other and do not consider all existing nursing home beds and all CON grants. See Health Quest Realty XII v.
HRS, 10 FLW 1729 (Fla. 1st DCA July 16, 1985) on Petition for Reh. 10 FLW 2341.
Although Martin and St. Lucie counties are within the same DHRS District IX, each is a separate and distinct subdistrict as mandated by Chapter 10-17.021(1) Florida Administrative Code and the St. Lucie population bed need is separately calculated from that of Martin County. Local priorities recognized by 1984 amendments to sub-paragraph (2) of that rule work against Petitioner's position by recognizing inter-subdistrict population mobility between Glades and Hendry Counties and by mandating first allocations of beds there when bed need arises in sub-district 4. A similar amendment could have been made to the rule in relation to Martin (subdistrict 2) and St. Lucie (subdistrict 5) counties within District IX and was not. There is no such rule recognition for Martin and St. Lucie counties based upon local health plan priorities for those counties.
Mr. Kane's considerable testimony concerning bed need in St. Lucie County and those documents admitted for establishing that premise are therefore largely irrelevant. Under the circumstances of this case, an attack on the bed need methodology found in Rule 10-5.11(21) is impermissible. Health Quest Realty XII v. HRS, supra.; Gulf Court Nursing Center v. HRS 10 FLW 1983 (Fla. 1st DCA, August 20, 1985); Petition for Reh. en banc pending 12-12-85; Turro v. HRS, 458 So.2d 345 (Fla. 1st DCA 1984).
Ours is a mobile society and properly presented, that factor could influence the circumstances which may be taken into consideration to allow a grant of a CON despite a "no need" determination in Martin County but it has not been proved-up in the instant case. None of the exceptional circumstances which may alter the applicable bed need methodology have been demonstrated.
In considering the testimony and documents actually admitted in evidence, the foregoing findings of fact have been established but Petitioner has not borne its burden of proof to establish the inferences it wishes to be drawn.
That the Department of Health and Rehabilitative Services enter a final order affirming the denial of Petitioner's certificate of need application for
120 nursing home beds and further denying the amended application for 60 nursing home beds.
DONE and ORDERED this 31st day of December, 1985, in Tallahassee, Florida.
ELLA JANE P. DAVIS
Filed with the Clerk of the Division of Administrative Hearings this 31st day of December, 1985.
Respondent's Proposed Findings of Fact.
Mark W. Hoffman, Esquire
R. Bruce McKibben, Jr., Esquire Assistant General Counsel Department of Health and
