STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONVALESCENT CENTERS, ) INC., (WEST PASCO), )

)

Petitioner, )

)

vs. ) CASE NO. 84-1454

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on August 29, 1984, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Donna H. Stinson, Esquire

The Perkins House, Suite 100

118 North Gadsden Street Tallahassee, Florida 32301

For Respondent: John F. Gilroy, Legal Intern

Post Office Drawer 11300 Tallahassee, Florida 32302-3300

BACKGROUND

This proceeding was initiated when respondent, Department of Health and Rehabilitative Services, issued its proposed agency action on February 28, 1984, advising that it intended to deny an application for a certificate of need filed by petitioner, Florida Convalescent Centers, Inc., wherein petitioner sought authorization to construct a 120-bed nursing home facility in Pasco County, Florida.

Petitioner thereafter filed a petition for formal administrative proceeding pursuant to Subsection 120.57(1), Florida Statutes, to contest the denial of its application. The matter was forwarded by respondent to the Division of Administrative Hearings on April 23, 1984, with a request that a Hearing Officer be assigned to conduct a hearing.

By notice of hearing dated July 10, 1984, a final hearing was scheduled on August 29, 1984, in Tallahassee, Florida. A motion to continue the final hearing and to consolidate this case with Case No. 84-1455 filed on behalf of petitioner was denied on August 23, 1984.

At the final hearing petitioner presented the testimony of Mark Druash, who was accepted as an expert in the field of health planning. Petitioner also offered petitioner's exhibits 1, 1-A, 1-B, and 1-C; all were received in evidence. Respondent presented the testimony of C. Edwin Carter, Jr., who was accepted as an expert in the field of health care planning. Respondent also offered respondent's exhibit 1 which was received in evidence.

The parties have stipulated that all statutory and rule criteria have been satisfied by petitioner except as to need and the resulting impact on financial feasibility. Accordingly, the issue is whether petitioner has demonstrated a need to construct a 120-bed nursing home facility in Pasco County, Florida.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Petitioner, Florida Convalescent Centers, Inc. (FCC), filed an application with respondent, Department of Health and Rehabilitative Services (HRS), on October 14, 1983, seeking a certificate of need authorizing the construction of a 120-bed nursing home facility in Pasco County, Florida. An amendment of an undisclosed nature was filed by FCC on August 22, 1984, but did not change the number of beds applied for.

   
   

2. After reviewing the original application, HRS issued its proposed agency action on February 28, 1984, in the form of a state agency action report in which it advised petitioner that it intended to deny the application. The transmittal letter denying the application offered the following reasons:

   
   

   The nursing homes in Pasco County are being used in an appropriate and efficient manner

   as demonstrated by an annual occupancy rate of

   90.7 percent from March through September, 1983. However, there are 240 nursing home beds that have been approved but have not been constructed at the present time. These beds, when added to the existing nursing home bed supply in Pasco County, will serve to maintain a reasonable subdistrict occupancy level through 1986.

   
   

   The basis for the above decision is contained in the State Agency Action Report.

   
   

3. The service area in which FCC proposes to construct its new facility is the Pasco County subdistrict of HRS District 5. In order to determine need, HRS has adopted Rule 10-5.11(21), Florida Administrative Code, which contains a formula (or methodology) for determining need at both the district and subdistrict level. Under that formula, HRS is required to utilize the "most recent 6 month nursing home utilization in the subdistrict." In this regard, HRS prepares on an on-going basis an internal document entitled "Quarterly Report" which contains the latest available data over a six-month period. In this proceeding, HRS used a report containing data for the period October, 1983 through March, 1984. This was the most current and complete available data at the time of hearing.

4. According to the methodology in Rule 10-5.11(21), there is a gross need in District 5 for 5,331 nursing home beds. However, there are presently 7,322 licensed and 791 approved beds in the District. Therefore, this results in an excess of 2,782 nursing home beds through the year 1987.

   
   

5. In the event there are excessive beds on a district-wide basis, the rule provides a means for establishing a need on a subdistrict level under certain conditions. Additional beds can be added within the subdistrict if the licensed beds in the subdistrict have an average current utilization of 90 percent or higher. If they do not, additional beds cannot be authorized even if a mathematical need is shown under the rule methodology.

   
   

6. FCC has computed need requirements for the subdistrict by eliminating the beds of two nursing homes just opened within the last six months, and by using census figures for the month of June, 1984. Based upon these calculations, it results in a need for 99 additional beds and a current utilization rate of 95.7 percent, which exceeds the 90 percent threshold requirement. However, the rule makes no provision for the use of more current data on a selective basis, or the exclusion of such beds from the calculation.

   
   

7. FCC also contends Pasco County has an "abnormal" situation caused by an excessive availability of beds in neighboring counties (Pinellas and Hillsborough). It also points out that Pasco is far below the state average for beds per 1000 elderly population. But, again, these factors are taken into account in the agency's rule, and do not constitute special circumstances that would require an exception to the rule.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdicton of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

9. The parties have stipulated that all statutory criteria have been met by the applicant except those criteria relating to need and the resulting impact on financial feasibility. These are codified in Subsection 381.494(6)(c) 1., 2., 9. and 12., Florida Statutes, and require HRS to consider the following when evaluating applications for certificates of need:

   
   

   1. The need for the health care facilities and services and hospices being proposed in relation to the applicable 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.

1. The immediate and long-term financial feasibility of the proposal.

   12. The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not

   limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to

   promote quality assurance and cost-effectiveness.

   
   

   In addition, the applicant must also meet the criteria imposed by Rule 10- 5.11(21), Florida Administrative Code. That rule contains the formula by which bed need for nursing homes is determined. The rule is binding as to need, and HRS is bound to observe it in administering its certificate of need program.

   Page v. Capitol Medical Center, Inc., 371 So.2d 1087, 1901 (Fla. 1st DCA 1979).

   
   

2. Under the formula prescribed by Rule 10-5.11(21), there is no need for additional beds in Pasco County, Florida through 1987. Although petitioner contends that need is shown due to "special" conditions in Pasco County, or by the injection of selected data in the computation process, these reasons neither constitute special circumstances that would justify deviating from the rule, nor are they permissible calculations in determining need.

   
   

3. It is concluded that no need for additional nursing home beds in Pasco County, Florida has been shown, and that the application should be denied.

RECOMMENDATION

Based on the foregoing findings of fact and conclusion of law, it is RECOMMENDED that the application of Florida Convalescent Centers, Inc., for

a certificate of need to construct a 120-bed nursing home facility in Pasco

County, Florida be DENIED.

DONE and ORDERED this 15th day of October, 1984, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1984.

COPIES FURNISHED:

Donna H. Stinson, Esquire The Perkins House, Suite 100

118 North Gadsden Street Tallahassee, FL 32301

John F. Gilroy, Legal Intern

P.O. Drawer 11300 Tallahassee, FL 32302-3300

David Pingree, Secretary

Dept. of Health and Rehabilitative Services

1323 Winewood Blvd.

Tallahassee, FL 32301

Docket for Case No: 84-001454

Orders for Case No: 84-001454