STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEALTH CARE AND RETIREMENT ) CORPORATION OF AMERICA d/b/a ) HEARTLAND OF DADE, )

)

Petitioner, )

)

vs. ) Case No. 84-3334

) STATE OF FLORIDA, DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings on March 15, 1986. The Division of Administrative Hearings received the transcript of proceedings on April 3, 1986.

The parties filed proposed recommended orders on April 25, 1986, including proposed findings of fact. These are addressed by number in the attached appendix.

By order entered July 11, 1986, HCR's motion for official recognition was granted in part, and time to examine and contest a document was allowed through July 21, 1986.

The parties are represented by counsel:

APPEARANCES

For Petitioner: Jean Laramore, Esquire

Kenneth A. Hoffman, Esquire

325 North Calhoun Street Tallahassee, Florida 32302

For Respondent: B. Elaine New, Esquire

R. Bruce McKibben, Esquire 1323 Winewood Boulevard Tallahassee, Florida 32301

By letter dated July 30, 1954, respondent Department of Health and Rehabilitative Services (HRS) notified petitioner Health Care and Retirement Corporation of America, d/b/a Heartland of Dade (Heartland) of its intention to deny the application Heartland had filed the preceding April for a certificate of need to construct a 120-bed nursing home in Dade County, No. 3289.

In response, Heartland filed the present petition for formal administrative proceeding which HRS forwarded to the Division of Administrative Hearings, pursuant to Section 120.57(1)(b)3, Florida Statutes (1985).

ISSUE

Whether HRS should grant Heartland's application for a certificate of need to build a 120-bed nursing home in Dade County?

FINDINGS OF FACT

1. HRS' Health Services and Facilities Consultant Supervisor in the Office of Community Medical Facilities, Ms. Elizabeth Dudek, testified that HRS proposes to deny Heartland's application for certificate of need based on "only those criteria that had to do with need." (T.160) The parties agree that no other criteria are at issue.

   
   

   No Bed Need

   
   

2. HRS's Rule 10-5.11(21), Florida Administrative Code, specifies a formula to "determine if there is a projected need for new or additional community nursing home beds three years into the future." Rule 10-5.11(21)(b), Florida Administrative Code. The rule formula begins with two population cohorts, 65 to 74 and 75 and older, "projected . . . three years into the future," Rule 10-5.11(21), Florida Administrative Code, and generates a "final subdistrict allocation." From this "final subdistrict allocation," all existing nursing home beds and 90 per cent of approved nursing home beds not yet in service are subtracted, in order to determine net bed need for the subdistrict.

   
   

3. For 1987, Dade County needs no new nursing home beds; there will be a surplus of 1,720 nursing home beds in Dade County in 1987. (T.136)

   
   

4. After stipulating to a need for an additional 240 beds in 1988, HRS granted two certificates of need authorizing a total of 240 additional nursing home beds. Petitioner's Exhibits 15- 18. The evidence does not establish a need for more than 240 nursing home beds in Dade County in 1988, see Petitioner's Exhibit No. 19.

   
   

5. HRS released a "semiannual nursing home census and bed need allocation report" on December 3, 1985, in which it used the rule formula to generate an "allocated beds" figure of 7767 for Dade County for January 1989 for use in the January 1986 review cycle. Petitioner's Exhibit No. 8. The report identified 5846 licensed beds and 1930 approved beds, and asserted a need for 184 "net beds." Petitioner's Exhibit No. 8. But, based on the most current projections available at the time of hearing, there will be a surplus of 1,536 nursing home beds in Dade County in 1989. (T.148)

   
   

   No Poverty Adjustment

   
   

6. The same numbers for existing and approved nursing home beds were used, in calculating the 1987, 1988, and 1989 projections. Before these numbers were used to reduce the nursing home bed allocation for Dade County, and so produce net bed need figures, they were used to rule out the need for a poverty adjustment.

   
   

7. If there are less than 27 existing or approved nursing home beds per 1,000 persons over 65 in the district and if the "district poverty rate" exceeds

   the "state poverty rate," according to the most recent census, the rule prescribes a different methodology, called a poverty adjustment, for determining a final subdistrict allocation. The "poverty adjustment" methodology depends on the size of present, not future, elderly populations.

   
   

8. Dade and Monroe Counties comprise the pertinent HRS district. The current population of the district over age 65 is 302,008 and there are 6,271 licensed nursing home beds in the district, all in service as far as the evidence shows. An additional 2,110 nursing home beds approved for the district are not yet in service.

   
   

9. The bed need projections for 1987, 1988 and 1989 do not reflect a poverty adjustment, since the number of nursing home beds already existing or approved in Dade and Monroe Counties, exceeds 27 per 1,000 persons over 65 living in the two counties. Even though the district poverty rate exceeds the average poverty rate statewide, the poverty adjustment does not come into play.

   
   

10. If the number of approved nursing home beds were reduced by 240, however, the district's ratio of beds to persons over 65 would fall below 27. Petitioner's Exhibit 29 (corrected). In fact, a reduction in approved beds of

    225 would bring the number of approved or existing beds below 27 per 1,000 persons 65 or over. (2,11O-225<(27x302.005)-6271). A diminution of less than

    225 beds would reduce the surplus, but would not render the poverty adjustment applicable or otherwise result in a need for any additional beds in 1987, 1985 or 1989. But, if the number of approved nursing home beds were reduced by at least 225, the poverty adjustment would apply.

    
    

11. Any reduction in approved beds means fewer approved beds to be multiplied by .9 and subtracted from the final subdistrict allocation. Because only 90 per cent of approved beds not yet in existence are subtracted, a diminution in approved beds of 225 would result in a net bed need greater than 225, a need well in excess of the 120 beds which Heartland seeks in this proceeding.

    
    

    Approved Beds Questioned

    
    

12. The number of approved nursing home beds (not yet in service) used for all of these calculations includes 150 beds authorized by certificate of need No. 3426 issued to St. Francis Health Services, Inc. (St. Francis), 90 beds authorized by certificate of need No. 3427 issued to Hialeah Convalescent Centers, Inc. (Hialeah), 150 beds authorized by certificate of need No. 2555 issued to Catholic Community Services, Inc. (Catholic), see Petitioner's Exhibit No. 20, and 50 beds authorized by certificate of need No 2553 issued to U.S. Care Corporation for the Anna E. Anderson Health Center (Anderson).

    Petitioner's Exhibit 12.

    
    

13. HRS issued the latter two certificates of need despite rule calculations showing no numerical need, because Anderson and Catholic proposed facilities for underserved segments of the Dade County population, including residents of Liberty City.

    
    

    Prior Policy Misapplied

    
    

14. In the next batch after the one in which Heartland applied for certificate of need No. 3289, St. Francis and Hialeah applied for nursing home certificates of need in Dade County.

15. When Heartland filed its original application for certificate of need, HRS adhered, although imperfectly, to a policy sometimes called "first in time, first in right." A witness described the policy:

    
    

    [T]he Department would give priority consideration to litigants who had filed the earliest application

    [i]f need was identified . . . [and the earliest applicant] met the applicable criteria. . . . [T]here was [no] consideration given to the planning horizon that the applicant applied

    for . . . (T.101)

    
    

    Under this policy, which was ostensibly in effect at HRS at all pertinent times through December 26, 1985, (T.l02), applicants who filed in earlier batches had priority over applicants who filed in later batches, and HRS looked to a receding three year horizon; if HRS identified sufficient need "three years into the future," Rule 10-5.11(21), Florida Administrative Code, at any time while an application remained pending, HRS granted the certificate of need, if no other applicant had priority.

    
    

16. Now, however, in order to "implement . . . what was seen as being the provisions of Gulf Court," Petitioner's Exhibit No. 3, p. 15, HRS staff considers bed need for each review cycle or "batch" at a single, constant, temporal point, viz., three years later than the deadline for filing nursing home certificate of need applications in that batch. A rule along these lines was proposed, but HRS has now withdrawn the proposed rule, in the face of multiple challenges to the rule. See, e.g., Forum Group, Inc., et al. v. State of Florida, Department of Health and Rehabilitative Services, No. 56-1677R. (DOAH, July 10, 1986)

    
    

17. Initially, HRS proposed to deny St. Francis and Hialeah's applications for certificates of need, just as it proposed to deny Heartland's earlier application. Like Heartland before them, St. Francis and Hialeah each filed petitions for formal administrative proceedings, which were transmitted to the Division of Administrative Hearings, Hialeah Convalescent Centers, Inc. vs. Florida Department of Health and Rehabilitative Services, No. 85-0556 and St. Francis Hospital, Inc., et al. vs. Department of Health and Rehabilitative Services, No. 85-0574, where the formal proceedings were consolidated.

    
    

18. After HRS, St. Francis and Hialeah stipulated that 240 additional nursing home beds were needed in Dade County, the Hearing Officer entered an order in the consolidated proceeding, Cases Nos. 85-0556 and 85-0574, on October 21, 1985, remanding the consolidated proceeding to HRS. Petitioner's Exhibits Nos. 15 through 18.

    
    

19. Even though St. Francis and Hialeah applied in a batching cycle subsequent to the one in which Heartland filed, and even though HRS did not issue a certificate of need to Heartland, HRS issued a 150-bed certificate of need to St. Francis on November 14, 1985, No. 3426, and a 90-bed certificate of need to Hialeah on December 9, 1985, No. 3427, apparently in the mistaken belief that St. Francis and Hialeah had applied for certificates of need before the cycle in which Heartland filed its application. HRS took no action on HCR's petition to intervene and motion to stay dated November 27, 1985.

    Subsequent Filings

    
    

20. In 1985 Heartland filed a second application for a certificate of need for nursing home beds in Dade County, No. 4215, Petitioner's Exhibit No. 25, in a batch subsequent to the one in which Hialeah and St. Francis filed.

    
    

21. Heartland filed separate petitions for formal administrative proceeding addressed to the certificates of need issued to Hialeah and St. Francis, petitions which are dated March 17, 1986. The petition in which Heartland challenged issuance of the certificate of need to Hialeah, Petitioner's Exhibit No. 27, occasioned an order styled Notice and Order entered by HRS on April 14, 1986.

    
    

22. In this "Notice and Order" HRS denied Heartland's request for comparative review of the present application with Hialeah's application for certificate of need, citing Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 453 So.2d 700 (Fla. 1st DCA 1985) (reh. den. 1986), for the proposition that the "first in line policy was repudiated." In the same "Notice and Order," however, HRS ruled that Heartland had a right too comparative review with Hialeah as regards Heartland's later application "if, as alleged by HCR (Heartland) the beds were awarded in Con 3427 from the fixed pool addressed by HCR in CON 4215." Healthcare and Retirement Corp. of America d/b/a Heartland of Dade, vs. Health and Rehabilitative Services and Hialeah Convalescent Centers, Inc., No. 86-1354.

    
    

23. An order to the same effect was entered on Heartland's petition challenging issuance of certificate of need No. 3426 to St. Francis. Health Care and Retirement Corp. of America d/b/a Heartland of Dade vs. Department of Health and Rehabilitative Services and St. Francis' Health Services, Inc., et al No. 86- 1702 (HRS, May 9, 1986).

    
    

    CONCLUSIONS OF LAW

    
    

24. At final hearing Heartland purported to amend its application to address the 1989 planning horizon, pertinent under HRS' current policy only to applications filed in 1986 batches. Heartland contends the Gulf Court decision authorizes such a procedure. But the Gulf Court opinion states:

    
    

    [S]trict adherence to HRS' procedural rules governing the . . . amendment of completed applications . . . will afford all applicants desiring to compete . . . a clear point of entry . . . without giving any applicant an undue advantage over a competing application. Gulf

    Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700, 708 (Fla. 1st DCA 1985) (reh.

    den. 1986)

    
    

    Nothing in HRS' procedural rules purports to allow an applicant for certificate of need to make a unilateral election on the day of final hearing to have a pending application considered in a batch other than that in which it was filed. Such a procedure would neither "afford all applicants . . . a clear point of entry," 483 So.2d at 705, nor prevent "undue advantage over a competing application." id.

    Bed Need

    
    

25. Heartland failed to prove need under the formula prescribed by Rule 10-5.11(21)(b), Florida Administrative Code, either for 1987 or for 1989. The poverty adjustment specified by Rule 10.5-11(21)(b), Florida Administrative

    Code, requires the same calculation regardless of the horizon year, however, and presents a closer question. HCR has to show that 225 or more of the nursing home beds HRS counted as approved should not have been included, in order for the poverty adjustment to apply. It tries to do this in two ways.

    
    

26. First, HCR contends that nursing home beds approved for Catholic and Anderson should be disregarded, citing University Community Hospital v. Department of Health and Rehabilitative Services, 472 So.2d 756 (Fla. 2d DCA 1985). Catholic and Anderson each received certificates of need despite a lack of numerical need according to applicable formulae, and each certificate was justified on the basis of underserved populations. But all resemblance between the certificates of need issued to Catholic and Anderson and the Tampa Heart Institute certificate ends there. The certificate of need HRS proposed to issue to Tampa Heart Institute would have authorized construction of cardiac catheterizations laboratories in Tampa, not to serve area residents, but exclusively for the benefit of Latin Americans with heart problems, people who were not taken into account by the rule methodology. "THI would serve patients from Latin America, not the general populace within the pertinent service area."

    472 So.2d at 757.

    
    

27. Since Catholic and Anderson propose to serve residents of Dade County, beds they open will become part of the inventory available to the elderly population of Dade County. Just such beds are taken into account by the rule methodology. Like all other approved nursing home beds not yet opened, they must be counted as "existing or approved" nursing home beds, for purposes of determining whether the poverty adjustment applies; and must be multiplied by .9 and subtracted from the final nursing home bed allocation for Dade County.

    
    

28. Second, Heartland contends that nursing home beds approved for St. Francis and Hialeah should be disregarded, because the finality of these certificates of need has been called into question. With respect to this contention, a recent appellate decision is instructive:

    
    

    In its initial review, HRS determined the inventory of existing beds by sending a letter to all health care providers shown by HRS records to have CON-approved short-term psychiatric and substance abuse beds asking them to confirm the

    existence of such beds. The letter contained notice that if the provider failed to respond within a given time HRS would assume that the number of beds reflected in its records was correct and the facility would be deemed to have that number of licensed short-term beds available or in operation. While this procedure for establishing inventory might have

    been sufficient to place the burden on the applicant to prove that the

    inventory reflected in HRS records was incorrect. It did not conclusively establish the correct inventory of such beds as a matter of fact.

    
    

    HRS makes a persuasive argument for including, as part of the bed inventory,

    CON-approved beds which have not been placed in operation but can be

    opened in the future. It is logically sound, for example, to include fifty approved beds in inventory, although only thirty beds are in operation,

    if the additional twenty beds previously approved can be made available by the health care provider for use as patient demand increases. Whether such approved, although nonexistent, beds should be

    included in inventory for the particular planning horizon in which the application is addressed

    depends upon a number of factual considerations, such as whether the physical plant can house the additional beds, and if not, the

    probability of new construction and, if use of the additional beds would necessitate a change in services, whether such change is probable.

    These factual issues must be determined upon the information made known to HRS or the hearing officer. Balsam v.

    Department of Health and Rehabilitative Services, 486 So.2d 1341, 1346-7 1341,

    1346-7 (Fla. 1st DCA 1986).

    (Emphasis supplied).

    
    

    The Balsam court held that all existing beds, if approved, and all approved beds, if likely to become available, were to be used to reduce bed allocations in arriving at net bed need.

    
    

29. The rule provisions construed in the Balsam case prescribe subtracting one hundred percent of all "existing and approved," Rule 10-5.11(25), and (27), Florida Administrative Code, psychiatric beds. Under the nursing home bed rule all existing, but only ninety percent of approved, nursing home beds are counted. By specifying that the number of approved beds be multiplied by .9, before being deducted from allocated beds, the bed need formula in the nursing home rule recognizes that all approved beds will not materialize. Evidence that approved beds are not likely to be built is nevertheless relevant in proceedings like these.

    
    

30. Just as the administrative finality of prior approvals was not dispositive in University Community Hospital v. Department of Health and Rehabilitative Services, 472 So.2d 756 (Fla. 2nd DCA 1985), (question of the "essentiality of final agency action as an antecedent to approval of a CON," 472

    So.2d at 757, expressly not decided), so the Balsam court did not attach determinative significance to the finality of certificates of need approving other psychiatric beds. That a certificate of need is being litigated is apparently only one of the "factual considerations" to be taken into account under the Balsam decision.

    
    

31. The present case does not, in any event, pose the "pure" question of the status of a certificate of need as to which de novo review proceedings have been regularly instituted. Although "the initial determination by HRS to grant or deny an application for a CON is preliminary agency action," Boca Raton Artificial Kidney Center, Inc. v Florida Department of Health and Rehabilitative Services, 475 So.2d 260, 263 (Fla. 1st DCA 1985), HRS is not necessarily "required to ignore the impending grant of a CON," Health Quest Realty v. Department of Health and Rehabilitative Services, 477 So.2d 576, 577 (Fla. 1st DCA 1985), even when an objector files a timely petition for formal administrative proceeding within 30 days of notice of HRS' intended action.

    
    

32. The record in the present case shows that HRS issued certificates of need to St. Francis and Hialeah late last year, and that months later, long after time for appeal had run, HRS entered other orders ignoring the apparent finality of the action HRS had earlier taken, in issuing certificates of need Nos. 3426 and 3427. See Manatee Memorial Hospital v. Department of Health and Rehabilitative Services and consolidated cases, Nos. 85-0985, et al., (DOAH; Oct. 3, 1985) adopted by HRS in Final Order dated December 23, 1985, app. pending sub. nom. Charter Medical v. Department of Health and Rehabilitative Services, No. BL-56 (Fla. 1st DCA, Jan. 24, 1986).

    
    

33. But Heartland proved no facts which make it unlikely that the nursing home beds allotted to St. Francis and Hialeah will not become available to the residents of Dade County. Whatever the outcome of HCR's challenge to certificates Nos. 3426 and 3427, there is no reason to believe that less than

    240 beds will ultimately be approved and opened. HRS, St. Francis and Hialeah have already stipulated that 240 beds should be approved. Heartland does not quarrel with this assertion of need; it only wants to be the provider that meets the need, at least to the extent of opening 120 beds. The "factual considerations" militate in favor of "the probability of new construction." Balsam v. Department of Health and Rehabilitative Services, 456 So.2d 1341, 1347 (Fla. 1st DCA 1986).

    
    

    Other Questions Open

    
    

34. The present case is but one facet of the procedural complexities in which Heartland's applications for nursing home certificates of need are ensnarled. Denial of Heartland's initial application in no way prejudices any of Heartland's rights with regard to its second application for a certificate of need for nursing home beds in Dade County. If anything, the second application is strengthened, if fewer beds are approved in prior batches.

    
    

35. Nor does denial of Heartland's initial application in this proceeding resolve the question whether the initial application is entitled to comparative consideration with the St. Francis and Hialeah applications, or either of them. Heartland has argued that it is entitled to comparative consideration of its initial application with St. Francis' and Hialeah's applications in Case Nos. 86-1354 and 86-1702, and in Case Nos. 85-0556 and 85-0574. But, possibly because the preliminary question of Heartland's right to comparative review remains to be litigated in another proceeding, Heartland has not sought comparative review here. It has instead tried to demonstrate entitlement to

nursing home beds by virtue of being the only applicant in the "right batch." In these circumstances, denial of the initial application should be without prejudice to reconsideration of the application comparatively with St. Francis' and Hialeah's, if comparative review is decided to be appropriate in a proceeding in which that question remains pending.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That HRS deny Heartland's application for certificate of need, No. 3289, without prejudice to comparative consideration of the same together with St. Francis' and Hialeah's applications, Nos. 3426 and 3427, in the event comparative review is ordered in other proceedings.

DONE AND ENTERED this 1st day of August 1986 at Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301 904/488-9675

FILED with the Clerk of the Division of Administrative Hearings this 1st day of August 1986.

APPENDIX

Petitioner's proposed findings of fact Nos. 1, 2, 3, 5, 11, 12, 13, 15, 20,

23, 24, 26, 32, 33, 34, 37, 38, 39, 43 and 44 have been adopted, in substance, insofar as material.

Petitioner's proposed finding of fact No. 4 has been adopted, in substance, except for "numeric."

Petitioner's proposed findings of fact Nos. 6 and 7 have not been adopted. The application came in evidence, but petitioner was never authorized to file an updated application for a new batch at hearing; for one thing, petitioner did not show it had filed a letter of intent beforehand.

Petitioner's proposed finding of fact No. 8 is immaterial. All parties have proceeded on the assumption that Rule 10-5.14, Florida Administrative Code remains in force.

Petitioner's proposed finding of fact No. 9 relates to 1989 and is treated in paragraph 5 of the findings of fact.

Petitioner's proposed finding of fact No. 10 merely recites a witness' testimony. See paragraph 5 of the findings of fact.

Petitioner's proposed finding of fact No. 14 is treated in paragraphs 10 and 12 of the findings of fact.

Petitioner's proposed findings of fact Nos. 16 through 19 pertain to DOAH Case Nos. 85-0556, et al. To the extent material, they have been adopted, in substance. See paragraphs 14, 17, 18 and 19 of the findings of fact.

Procedural wrongs, if any, done petitioner in DOAH Case Nos. 85-0556, et al.,

cannot be redressed in a collateral formal administrative proceeding like this one.

Petitioner's proposed finding of fact No. 21 has been adopted to this extent: consistent application of the "first in time, first in right" policy would have required approval of the application.

Petitioner's proposed finding of fact No. 22 is largely legal argument.

The transcript cite does not support the one factual assertion.

Petitioner's proposed finding of fact No. 25 has been adopted in substance except for the filing date. The petition is dated March 17, 1986, but the record does not show when it was filed.

Petitioner's proposed finding of fact No. 27 is incorrect because superseded. See Paragraph 23 of the findings of fact.

Petitioner's proposed findings of fact Nos. 25 through 31 and 35 accurately recite Heartland's witnesses' testimony but this view has been rejected as being against the greater weight of the evidence.

Petitioner's proposed finding of fact No. 36 recites a necessary, but not a sufficient, condition for application of the poverty adjustment. The district poverty rate must also exceed the statewide average rate.

Petitioner's proposed finding of fact No. 40 has not been adopted because it was not established by the weight of the evidenced.

Petitioner's proposed findings of fact Nos. 41 and 42 pertain to other formal administrative proceedings, Case Nos. 86-1354 and 86-1702. To the extent material, they have been adopted in substance. See paragraphs 20-23 of the findings of fact. Procedural wrongs done petitioner, if any, in Case Nos. 86- 1354 and 86-1702 cannot be redressed in collateral formal proceedings.

Respondent's proposed findings of fact Nos. 1 through 4, 6 through 9, 11,

12 the first sentence of No. 13, and No. 14 have been adopted, in substance, insofar as material.

Respondent's proposed findings of fact 5 and 10 recite HRS policy as articulated in the recently withdrawn rule proposed on batching. See paragraph

16 of the findings of fact. The semiannual nursing home report for January 1986 does address the 1959 horizon.

The second sentence of respondent's proposed finding of fact No. 13 relates to Case Nos. 85-0556, and 85-0574. The precise state of the record in those cases is immaterial to the present case.

COPIES FURNISHED:

Jean Laramore,Esq.

Kenneth A. Hoffman, Esquire

325 North Calhoun Street Tallahassee, Florida 32302

B. Elaine New, Esquire

R. Bruce McKibben, Esq. 1323 Winewood Boulevard Tallahassee, Florida 32301

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA, d/b/a HEARTLAND OF DADE,

Petitioner, CASE NO. 84-3334 CON NO. 3289

vs.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS) A copy of that Recommended Order is attached hereto.

FINDINGS OF FACT

The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except as follows:

Petitioner did not seek comparative review in this cause. CON 3289 should be denied and HRS sees no reason for a denial without prejudice to comparative review should that be ordered by a District Court of Appeal. In orders dated April 14, 1986 and May 9, 1986 in Health Care and Retirement Corporation vs.

DHRS and Hialeah Convalescent Centers, Inc. and Health Care and Retirement Corporation of America d/b/a Heartland of Dade vs. DHRS and St. Francis Health Services, Inc. HRS has concluded that petitioner is not entitled to comparative review of its CON application 3289 with CONs 3426 and 3427. Certainly, HRS will abide by a judicial mandate requiring comparative review.

HRS fully concurs with the hearing officer that the First District Court of Appeal in Gulf Court Nursing Center vs. DHRS et. al., 483 So 2d 700 (Fla. 1st DCA 1986) did not authorize petitioner to address the 1989 planning horizon (three (3) years from the date of the final 120.57 hearing). HRS takes this opportunity to further elaborate on this point. Before Gulf Court full de novo

review was allowed in a 120.57 hearing wherein an applicant challenged the denial of a CON. Applications were commonly updated and amended up to and including the time of the final 120.57 hearing; often times, changing greatly the character and scope of the original proposal. Gulf Court, at page 708, pointed out that this policy along with the "first in line, first in right" policy of awarding CONs encouraged the "buy a ticket and stand in line" behavior of health care providers, resulting in needless applications, administrative reviews, and litigation.

In contrast under Gulf Court, at page 706 and 707, the planning horizon is fixed by the filing date of the original application. If Gulf Court were interpreted as urged by petitioner, an applicant with a 120.57 proceeding pending could hop-skotch through the hatching cycles until it found a planning horizon with a favorable pool of beds. To the contrary, de novo review has been limited by Gulf Court and there is no longer any authority in statute, rule, or policy permitting amendment of CON applications in 120.57 proceedings. Rule 10- 5.14(3), Florida Administrative Code provides that an updated application may be resubmitted to HRS three (3) years after an initial denial by HRS. Subsections

(1) and (2) of this rule are obsolete,

During 120.57 proceedings, an application may be updated to address facts extrinsic to the application such as interest rates, inflation of construction costs, current occupancies, compliance with new state or local health plans, and changes in bed or service inventories. An applicant is not allowed to update by adding additional services, beds, construction, or other concepts not initially reviewed by HRS.

Petitioner has not established entitlement to a CON.

THEREFORE, it is adjudged that petitioner's application for CON 3289 to build a nursing home in Dade County, Florida is denied.

DONE and ORDERED this 6th day of October, 1986, in Tallahassee, Florida.

WILLIAM J. PAGE

Secretary

Copies furnished to:

Jean Laramore, Esquire B. Elaine New, Esquire Kenneth A. Hoffman, Esquire R. Bruce McKibben, Esquire

325 North Calhoun Street 1323 Winewood Boulevard Tallahassee, Florida 32302 Building 1, Room 407

Tallahassee, Florida 32399

Robert T. Benton Hearing Officer

DOAH, The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

Nell Mitchem Con Office

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 6th day of October, 1986.

R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700 904/488-2381

NOTICE OF RIGHT TO JUDICIAL REVIEW

Judicial review of agency final order may be pursued in accordance with Section 120.68, Florida Statutes, and Florida Rules of Appellate Procedure 9.030(b)(1)(c) and 9.110. To initiate an appeal, a Notice of Appeal must be filed with the Department's Clerk of Agency Proceedings, Haydon Burns Building, 605 Suwannee Street, MS 58, Tallahassee, Florida 32399-0458, and with the appropriate District Court of Appeal within 30 days of the filing of this Final Order with the Department's Clerk of Agency Proceedings. The Notice of Appeal filed with the District Court of Appeal should be accompanied by the filing fee specified in Section 35.22(3), Florida Statutes.

Docket for Case No: 84-003334

Orders for Case No: 84-003334