STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NURSE WORLD, INC., )

)

Petitioner, )

)

vs. ) Case No. 85-2628

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, a formal hearing was held in this case before Ella Jane P. Davis, a duly assigned Hearing Officer of the-Division of Administrative Hearings, on February 11, 1987, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Eric J. Haugdahl, Esquire

1363 East Lafayette Street, Suite C Tallahassee, Florida 32302

For Respondent: Darrell White, Esquire

Department of Health and Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700 BACKGROUND AND PROCEDURE

On December 12, 1984, Nurse World, Inc. filed an application under Chapter 381, Florida Statutes, for a certificate of need (CON) to establish a home health agency in District VII (Seminole, Orange, Osceola, and Brevard counties). Nurse World's application was comparatively reviewed with five other applicants in the same batching cycle. Department of Health and Rehabilitative Services (HRS) denied Nurse World and the other applicants, except for Profile Medical Services (Profile), which was granted a CON. All denied applicants

timely filed petitions for formal administrative hearing to challenge the denials, and case files were accordingly established/numbered at the Division of Administrative Hearings. Some petitions challenged the CON grant to Profile. The petitions were consolidated for a final hearing. Prior to the final hearing,

all applicants except Nurse World voluntarily withdrew their petitions for hearing, including any challenges to Profile's CON. Nurse World had never challenged the award of a CON to Profile.

Consequently, Nurse World is the only Petitioner to remain in this case and HRS is the only Respondent. There are no intervenors.

Nurse World contends that its application for a CON in District VII should be approved because it satisfies applicable criteria as set forth in Section 381.494(o)(c), Florida Statutes (1985). HRS' position is that there is a need for one additional home health agency in District VII to be specifically located in Brevard County and because all challenges to the grant of CON 3683 to Profile to establish an agency in Brevard County have been withdrawn, there is no need for an additional home health agency in District VII.

At the final hearing, the parties' prehearing stipulation (interlineated) was received into evidence as HO-A and official recognition was taken of Chapter 10-5, Florida Administrative Code. Nurse World presented the testimony of Timothy Kowalski; Gwen Kowalski; Valerie Denner, R.N.; Allen M. Denner, M.D.; Frances Wildermuth; Jill Miller, R.N.; Sally DiMeo, R.N.; Cleveland D. West; Sharon Gordon-Girvin, expert in health planning; Richard Gramming, expert in health planning; Don Buswell Charkow, M.D. (through deposition P-3); and William J. Robins (through deposition P-4); and had admitted in evidence Petitioner's Exhibits 1, 3, 4, 6, 7A and 78. Exhibits P-2 and P-5 were withdrawn. Respondent HRS presented the testimony of Dennis Halfhill and had admitted in evidence Respondent's Exhibit 1.

A transcript of the proceedings was filed with the Division of Administrative Hearings. The parties filed their respective post-hearing proposals within the extended time

limits to which they mutually stipulated. All proposed findings of fact have been addressed and ruled on pursuant to Section 120.59(2), Florida Statutes, within the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The parties have stipulated that the only statutory criteria at issue are those related to need and long term financial feasibility as it relates to need, specifically

   Subsections 381 494(6)(c~ 1,2,9, and 12, Florida Statutes and Rule 10-5.011(1 (b)l. and 3. Florida Administrative Code.

   
   

2. Nurse World, Inc. is an existing non-Medicare home health care agency and is a provider of temporary nursing services in District VII.

3. The five biggest home health agencies in District VII are Nurse World, Visiting Nurse Association (VNA), Upjohn, PRN (no full name ever given), and Norrell. Nurse World is the largest of these as far as active staff, but is the only one of these that is not Medicare-certified.

   
   

4. HRS is the agency responsible for certification and licensure of home health agencies.

   
   

5. A home health agency in Florida must obtain a CON from HRS before it can be licensed and become eligible to receive Medicare reimbursement.

   
   

6. Medicare is a federally funded health program for the elderly and certain disabled persons. Medicare reimbursement is limited to reimbursement for skilled nursing, physical therapy, speech therapy, occupational therapy, home health aid services, and medical social services. The Medicare program reimburses home health agencies on a cost reimbursement basis with a cap for each discipline. Home health agency costs in excess of Medicare caps must be absorbed by the agency. Consequently, traditional concepts of price competition have no applicability to home health agencies providing Medicare reimbursable services. Individuals become Medicare eligible for home health agencies' services in two ways. First, age makes an individual eligible when a person is over 65 and has paid a sufficient number of quarters to social security. Another way is for an individual under 65 to be declared disabled.

   
   

7. The 1985 State Health Plan is the most current plan. The only portion of the 1985 State Health Plan which is applicable to home health agency applications is that access to home health services should be improved, specifically access for Medicaid and indigent patients. Nurse World's application satisfies this requirement. Only certain portions of the District VII local health plan are applicable to Nurse World's application. The methodology employed in the local plan was derived from a rule which was declared invalid. See infra on the inapplicability of these portions of the plans. The portions of the local plan which are applicable are the priorities that a home health agency provide a full range of service, improve access for underserved groups, and have interrelationships with the existing health care facilities and community.

   
   

8. Since Nurse World, Inc.'s inception in August of 1981, it has grown from a staff of approximately 50-75 nurses to a

   current staff of close to 700 active field employees including registered nurses (R.N.s), licensed practical nurses (LPNs), nurse aides, and ancillary personnel. Nurse World's growth is due in part to quality patient care and effective and efficient employee management. A background check is done on personnel prior to hiring. Some of Nurse World's employees are screened by

   competency examinations. Ninety percent of its staff is made up of LPNs, Emergency Medical Technicians (EMTs) or Physician Aides (PAs). All receive additional training by Nurse World.

   
   

9. Other home health agencies in District VII often call Nurse World to obtain nurses to fill out their shifts whereas Nurse World has never had that problem.

   
   

10. In line with HRS' position that applicants must demonstrate that existing agencies cannot meet existing need, Nurse World submitted considerable reputation-type testimony. Upon proper predicate and under certain circumstances, evidence of character reputation and evidence of modus operandi, are admissible. "Character is distinct from reputation; reputation is evidence of character," Ehrhardt, Florida Evidence, Subsection 405.1 (2d Ed. 1984). See same text, Subsection

    404.11 on modus operandi. Indeed, CON applicants traditionally try much of a contested case upon evidence of their own professional reputations, and the reputation of their competitors, privy to the case or not. This entire line of inquiry was prompted by HRS' negative burden of proof concept and upon authority of Balsam v. Department of Health and Rehabilitative Services, 486 So. 2d (Fla. 1st DCA 1986). In these contexts, reputation evidence, a hearsay exception, was admitted in evidence. Nurse World's reputation as reported from all sources in the community (District VII) is excellent, particularly for quality of care, reliability, and speed of response. This type of reputation evidence was also supplemented by opinion evidence from various witnesses' personal on-going experience. Nurse World also presented testimony that Upjohn does not have a good reputation, that VNA has an unfavorable attitude towards indigent patients, and that UpJohn and VNA nurses will contact a doctor less appropriately than Norrell or Nurse World when there is a change in the patient's condition. There was a modicum of evidence that a better nurse knows when to call a doctor and when not to.

    
    

11. Nurse World is a continuing education unit (CEU) provider, offering seminars covering state of the art nursing skills twice monthly. This service naturally increases the proficiency and quality of Nurse World's own employees who attend, but additionally, its continuing medical education seminars serve the community as a whole, since every two years LPNs and R.N.s, must each complete 24 hours of additional training so as to be eligible to renew their professional licenses. Nurse World is the only home health agency in Central Florida that has a CEU provider number. Unlike most hospital

    CEUs in the area, its continuing medical education services are free of charge and it maintains a suggestion box for topics to be addressed. Its use of video tape instruction both in-house and for seminars is an advanced technique.

    
    

12. Nurse World has the exclusive contract to provide nursing services to Hospice of Central Florida. Hospice of Central Florida is a Medicare-certified home health agency, which has no nursing staff of its own. It has only support staff. Nurse World provides all its nurses. After switching to VNA, Hospice switched back to Nurse World.

    
    

13. Nurse World has guaranteed in its application that if the CON is issued, it will provide 3 percent of its patient visits to indigents and 3 percent of its patient visits to Medicaid-eligible patients. It is satisfied for any CON grant to be conditioned on such a requirement. Nurse World's proposal to devote 6 percent of its patient visits to the traditionally medically underserved is relatively high for a home health agency. Nurse World presently provides $8,000 in indigent care through its Hospice contract and provides one free patient visit for every five patient visits at Brookwood AMI Hospital. It also has an indigent volunteer services program which provides basic nursing skills training to families so that they can care for their loved ones at home.

    
    

14. Nurse World is a "full service" agency. It is considered "high-tech", providing in the home C-pap, IV therapy, respirator, feeding through a chest tube catheter, hyperalimentation, passive motion and other services previously available only in hospitals. This element of its services is particularly significant because of Nurse World's availability to handle difficult cases such as AIDS victims, infants, and multiply-afflicted elderly patients on a 24 hour a day, 7 days a week basis. Nurse World proposes to offer and does offer a full range of services. No other home health agency in District VII provides the full range of services to the degree and over the

    24 hour a day period as Nurse World does. These types of difficult cases appear to be underserved in District VII.

    
    

15. Nurse World is the only home health agency in the District that effectively staffs its office seven days a week,

    24 hours a day. Nurse World has done so ever since it took its first critical care patient and entered into high tech nursing. This relates directly to quality of care and being responsive to patients' needs with no endangering delay as discussed below in relation to high tech protocols. Among health care providers

    generally and among home health care agencies particularly, Nurse World has a unique approach to insure immediate access and responsiveness to its patients: it mans its telephones with live dispatchers with immediate access to professionals on call. No other Central Florida home health agency does this. At all times there is at least a registered nurse available by phone when a patient reaches Nurse World. There is always a second professional backup behind the professional on the phone, often the Director Ms. Denner, herself. Nurse World has adopted this approach because it feels there is not enough time for turnaround response with other systems when a critical care high tech patient or confused elderly patient gets in trouble or has an emergency. Answering services hold calls; beepers require the professional on call to find a phone and return a call to the answering service, receive the emergency message, and then, finally, call the patient. Nurse World's method allows for the professional who receives the call at any hour of the day or night, even on a weekend, to respond to most situations immediately over the phone, and if necessary to contact the 911 emergency number and the patient's own regular nurse within minutes.

    
    

16. Nurse World was the first nursing service in the Central Florida area to render home health services to an AIDS patient, includes AIDS nursing in its continuing medical education efforts, and now gets referrals for Medicare on that basis. No other home health agency is dealing with AIDS patients to the extent that Nurse World is. Nurse World also has an agreement with Centaur, the AIDS support group for Central Florida, through which Nurse World will provide nurses at cost or at its "break even indigent rate". Nurse World has provided health care services to AIDS patients for a very minimal charge since this area of home health care-has been identified and has accelerated numerically. There are approximately 80-100 identifiable AIDS cases in the area. Nurse World has provided the bulk of care for these approximately 80-

    100 diagnosed AIDS cases. Other agencies are reluctant to provide this care. Bona fide AIDS patients are eligible for Medicare. The Medicare bureaucracy is processing AIDS case applicants quickly, in 3 to 6 months, basically because there is that necessity. Dr. Robbins, a physician practicing in the Brevard, Seminole, and Orange County area in infectious diseases and internal medicine specializes in the treatment of AIDS. He sees a need for Nurse World to become Medicare certified to render services to the Medicare eligible AIDS patients, because in his experience, Nurse orld renders the best services qualitatively to these types of patients. Any number of AIDS

    patients (either on or off Medicare) above the number actually served by Nurse World or treated by Dr. Robbins has not been statistically demonstrated, but all testimony on the subject supports the 80-100 existing case figure and the concept that the AIDS numbers are escalating in both Medicare-certified and uncertified categories.

    
    

17. One problem situation arising with increasing AIDS patients qualifying for Medicare is basically the same problem for all patients so qualifying. Once qualified, patients naturally must utilize one of the Medicare-certified home health agencies. The continuity of care of a patient is interrupted when Nurse World can no longer render nursing services to a former patient due to that patient becoming Medicare eligible.

    
    

18. A break in the continuity of care unfavorably affects the quality of care rendered any patient. The patient and staff often develop a rapport and a break in care can emotionally depress the patient, leading to medical (physical) setbacks. Quality of care is likewise negatively impacted by switches in car givers because the more often a nurse sees a given patient over a period of time, the more that nurse is able to monitor the quality and progress of that patient. There is modest evidence that Nurse World is proficient in scheduling the right nurse for the right patient. Nurse World is the only home health agency that actually video tapes some cases and then trains specific nurses before ever sending them into the patient's home.

    
    

19. There is presently a tendency to get people out of hospitals sooner than before due to the new diagnostic related grouping (DRG) regulations. Physicians then routinely refer these patients for home health care visits. As a result, in the last few years, there has been a quantifiable increase in the number of home health care visits requested in District VII. As a result of the increased demand and the inability of the Medicare-certified home health agencies to answer that demand (need), patients referred for Medicare home health services frequently will be seen only once or twice a week rather than three weekly visits as requested by their physicians. This is a significant deficiency in appropriate care for high tech critical care cases, including but not limited to the multiply- afflicted elderly.

    
    

20. Also, nursing homes in the area are now experiencing sicker patients due to individuals getting out of the hospitals earlier through DRGs. The scope of nursing home care has

    increased. The patients released from hospitals cannot go directly home if their case is too complicated. Thus, many patients first go into nursing homes before going to their own homes. Nurse World provides temporary staff relief for the Americana Health Care Center, a skilled nursing home facility in-Winter Park, Florida. According to the testimony of Jill Miller, R.N., Director of Nurses for Americana, Nurse World's staff meets the high standards set at Americana whereas the

    other home health care agencies she has sometimes used have not. Nurse World personnel, however, are unable to follow the Medicare eligible patients home after release from Americana because Nurse World has no Medicare certificate. This breaks the continuity of care for Americana Medicare patients and can result in all the unfavorable physical and emotional setbacks set out above.

    
    

21. Although the break in this continuity of Nurse World care is pronounced and more easily demonstrated using the Americana facility, and although it may be inferred that continuity of care is extremely important especially for the predominantly elderly population that uses Medicare regardless of which nursing home they exit, the continuity of exclusive care by Nurse World personnel specifically, falls short of representing a "special need" as that phrase has come to be understood in CON practice. This is also true for newly qualifying AIDS patients and hospital releases.

    
    

22. Nurse World has provided high-tech in-service training at Americana free of charge.

23. Nurse World is the only home health agency that staffs hospitals, nursing homes, and private duty visits. This sharpens the nurses' skills, especially their critical skills.

    
    

24. Generally the existing Medicare-certified home health agencies still do not take home high-tech patients.

    
    

25. It is advantageous to professional health care providers, the individual patients, and the community at large to encourage home care for high-tech patients. Caring for high- tech patients at home rather than in the hospital results in a cost savings to the community and for the individual patients as it is obviously much cheaper to care for patients at home.

    Also, the patients tend to get better quicker in their home environment. Examples of Nurse World's expertise in this area are that Nurse World was the first agency in the southeast United States to take home a baby on C-pap, a very sophisticated involved respirator. Nurse World is still the only agency located in District VII to have provided the C-pap at home.

    There is still no C-pap patient within District VII. Nurse World took home the first critical care, high tech patient in the Central Florida area four years ago. It is also the only agency that provides continuous passive motion care at home. Continuous passive motion care is a "state of the art" physical therapy device that provides continuous physical therapy. Nurse World has averaged three to four of these patients a week over the last year. Caring for high-tech critical care patients at home even when a "mini-intensive care unit" is necessary, costs the community much less than hospital care which can total $716 per day for a non-critical patient. Nurse World employs the largest number of critical care nurses in the area of any provider. Nurse World was the first agency that did blood gases on a patient at home, the first to take home a patient on a ventillator, the first to do home hyperalimentation, and the first to do a home I.V. patient. Two other agencies in the Orlando area now render high-tech services but not to the extent that Nurse World does. They began these services on a limited basis about a year after Nurse World began. Nurse World's "firsts" in these areas are significant because being in the vanguard of opening up these areas of practice has caused it to establish its own written in-home high tech policy and procedure (protocols) which the industry may voluntarily adopt since there is no HRS rule covering the subject matter. Most important about the protocols as developed and maintained by Nurse World are fail-safe techniques for dealing with malfunction of high tech machinery, power failure, isolation techniques for AIDS patients (sometimes considered "high tech"), and direct and

    immediate telephone contact with professional staff in any emergency.

    
    

26. HRS does not presently have any methodology pursuant to rule or policy for projecting need for a home health agency. The methodology that HRS employed in reviewing the Nurse World application was contained in the District VII local health plan. That plan had adopted an HRS proposed rule which was subsequently declared invalid in Home Health Services v. Department of Health and Rehabilitative Services, 8 FALR 1510 (March 12, 1986).

    
    

27. Sharon Gordon-Girvin, an expert in health planning, testified on behalf of Nurse World. She presented two methodologies for projecting the need for a home health agency in District VII. After the proposed rule was declared invalid, HRS developed a policy for determining the need for additional home health agencies, reflected in Petitioner's Exhibit 78, which was employed between March and August of 1986. That policy was actually used in reviewing home health agency applications, and in making decisions. HRS issued certificates of need for home health agencies based on that policy. Applying that HRS policy, which Gordon-Girvin considers "reasonable," there is a need for 35.3 home health agencies in District VII in 1986. 1986 is the planning horizon year applicable to the Nurse World application. There are 16 existing Medicare home health agencies in District VII. Direct, competent and substantial evidence supports the 16 figure which includes newly certified Profile Medical Services. HRS documentation confirms this. Uncorroborated hearsay evidence of an additional home health agency in District VII was struck. Therefore, the net need is for 19.3 home health agencies in District VII in 1986. HRS, when using this methodology, had a policy of giving out only one/third of the net need in each of three consecutive years. Gordon-Girvin would not term this latter policy nreasonable" and no one offered any acceptable justification for it. No reasonableness of this "award only 1/3 of need" policy was demonstrated and it has since been abandoned, but even by such a system, the net need in 1986 would be for 6.4 additional home health agencies in District VII in 1986. The gross need and the net need continue to increase through 1989. The methodology reflected in Exhibit 7B basically has two constants, the home health use rate and the optimal size visits. They act as constants. The increase in the number of agencies needed is attributable to the growth of the population.

    
    

28. Ms. Gordon-Girvin also employed a methodology

    employed by District III as a point of comparison to see how the number of agencies needed in District VII could be affected by using a very conservative methodology. District III's methodology was selected as a conservative comparison to the former state health policy. Also, no other local health council has a need methodology. Employing the methodology reflected in Petitioner's Exhibit 7A, there is a need for 17 home health agencies in District VII or a net need for 1 additional home health agency. (Gross need minus 16 existing certified agencies). This is a very conservative methodology because it changes very slowly over time. In fact, the net need remains at

    1 through 1989. Ms. Gordon-Girvin opined that this methodology employed in Petitioner's Exhibit 7A, is also a reasonable methodology but is very conservative and relies on hospital discharge rates in contrast to the discredited and abandoned HRS policy which is a

    use-based methodology. There are no other methodologies being employed by planners in Florida and no other methodologies were put forth by either party.

    
    

29. Presently, HRS has no rule or policy designating a numeric methodology to determine the need for new medicare home health agencies in any given district. HRS review of CON applications for home health agencies is based solely on statutory criteria, the merits of the proposal, and the district need for the agency as demonstrated by the individual applicant.

    
    

30. 80th need methodologies employed by Ms. Gordon Girvin contemplate the need for home heath agencies at the District level. That is, agencies operating in all four of District VII's counties. In reality, the existing home health agencies operate in only one or two mounties. For example, Profile Medical Services, the only successful applicant in the current batch, was recently issued a certificate of need under the HRS policy since discredited and abandoned, but its CON is limited so that it can operate only in 8revard county, so that actually only one-fourth the district need is being met.

    
    

31. At the time the Nurse World application was reviewed, there were 11 licensed and approved CON home health agencies in District VII. Six of these agencies only operate in one county and five operate in only two counties.

    
    

32. HRS is not aware of any Medicare-certified home

    health agency that operates in all four counties in District VII under a single certificate of need.

    
    

33. Because HRS' policy has been invalidated as a rule and since it has been subsequently abandoned by HRS, it would be invalid to employ it in these proceedings.

    
    

34. Even if the District III methodology determined a net need of one is reasonable, it would be unreasonable and unjustified to apply it as modified by HRS' uncodified award only 1/3 of need per year" policy, apparently also abandoned prior to hearing. Therefore, by the only reasonable need methodology presented (that of District III) there is room for one home health agency, not limited by county and not limited by the "award only 1/3 of need per year" policy. The 1/3 limitation should not apply in any case because it has no current application by HRS and because its effect varies the horizon year.

35. Since HRS had no need methodology or policy in place at date of hearing, it took the-position that an applicant must demonstrate need by finding people who are not getting the service. Ms. Gordon-Girvin, Petitioner's expert who had been employed at HRS in health planning for 11 years, opined that there is no adequate quantifiable technique available as a health planning methodology that will allow a health planner to make use of a negative demonstration of need. She suggested use of responses to a newspaper advertisement and then demolished that method of proof as "impractical". Another difficulty with this type of negative demonstration approach is that existing agencies can deal with increased need demands by simply continuing to add staff. Gordon-Girvin knew of no applicant that had acquired a CON by proving lack of access.

    Additionally, a similar agency position (the Rule of 300) has been struck down by the courts. This negative burden of proof concept has been given short shrift by the courts and is rejected here as well. See Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So. 2d 361 (Fla. 1st DCA 1984).

    
    

36. Richard Gramming, an expert in health planning, testified on behalf of Nurse World. He presented Petitioner's Exhibit 6 which demonstrated that there is a capacity for other agencies in District VII and that if one of those agencies were to be Nurse World, the impact would not be very significant on the available number of visits.

    
    

37. The multiplication of the Medicare home health use rate by the 65+ population for District VII produces the potential number of Medicare home health visits for District VII which for 1986 is 317,304. The total number of home health agency visits, Medicare and non-Medicare, for 1984 in District VII was 309,920. Of these visits, 266,531 were Medicare visits. When the actual number of Medicare visits is subtracted from the potential number of Medicare visits, there are 50,773 Medicare visits available for current and existing providers. When Nurse World's projected number of visits from year two (5,625) are subtracted there are still 45,148 Medicare visits available for current providers.

    
    

38. Nurse World's approval should have no serious impact on the short or long term financial positions of the existing Medicare providers with the possible exception of Hospice, which may have to hire its nurses elsewhere. An interest such as Hospice's is not one which Chapter 381 is designed to protect. Mr. Gramming's projections are very conservative and the

    untapped market is probably larger, since the Medicare eligible due to disability were not factored into his formulas and the use rate in the formula was kept constant, whereas it has been increasing over time.

    
    

39. A review of Nurse World's past growth rate and conservatively projected growth rate reveals that Nurse World is financially secure for a long-term position. In light of the potential market as demonstrated by the foregoing findings of fact, a long-term financial feasibility of Nurse World will be assured.

    
    

40. Home health agencies are labor intensive rather than capital intensive, with few fixed costs. The entry of Nurse World into the market will tend to keep costs as they are or perhaps lower costs through increased competition. Medicare costs caps are more effective in preventing cost inflation. Nurse World has met its minimal burden of proof to establish there will be no significant adverse impact on cost if the Nurse World application is approved; HRS has not gone forward to demonstrate there will be any adverse impact on costs if the application is approved.

    
    

41. Nurse World has demonstrated that access to health care by the underserved population will be improved and that the opportunity for specialization within the existing market place will be enhanced by their entry into the market.

    
    

42. Nurse World's actual growth rate from 1984 to 1985 and from 1985 to 1986 has been 20 percent per year in gross revenues. Twenty percent growth is logically anticipated for the current year despite a more conservative 12 percent calculation.

    
    

    CONCLUSIONS OF LAW

    
    

43. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause. Section 381.494(6)(c), Florida Statutes, and Chapter 10-5, Florida Administrative Code, provide the legal criteria applicable to this proceeding. A balanced consideration of all the statutory criteria must be made. Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So. 2d 361 (Fla. 1st DCA 1984); Balsam v. Department of Health and Rehabilitative Services, 486 So. 2d 1341 (Fla. 1st DCA

    1986).

    
    

44. As stipulated by the parties the only criteria at issue are Subsections 381.494(6)(c)1,2,7,9, and 12, Florida Statutes, and Rule 10-5.011(1)(b)1. and 3., Florida Administrative Code. Proof as to Subsection 5 was stipulated as not necessary at hearing. Applying these criteria to the instant case it is determined:

    
    

    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.

       
       

45. Nurse World satisfies the applicable portions of the state health plan and local plan. The applicable parts of these plans generally relate to improving access to the medically underserved. Nurse World's current efforts with respect to serving indigents, numerically escalating AIDS patients and their projected 6 percent Medicaid and indigent care guarantee meet this standard. Nurse World also offers a full range of services which is one of the priorities of the local health plan. Nurse World is also fully integrated and interrelated with the local health care facilities and communities, a further priority of the local health plan.

    
    

    2. The availability, quality of care, efficiency, appropriateness, accessibility, extend of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant.

    
    

46. One method of satisfying this criteria is through the demonstration of need by a proven methodology. HRS presently has no methodology. Nurse World presented two methodologies which demonstrate a need in District VII for at least one additional home health agency. Both methodologies show a need. One method, a use-rate based methodology, was formerly used by HRS in reviewing and issuing certificates of need. Having been invalidated and abandoned, it should not be applied. The other methodology was the application to District VII of a formula used by the local health planning council for District III. No other local health planning council has evolved any methodology which can be applied. The District III methodology demonstrates

    a need for one additional agency. It is a very conservative methodology and was employed basically as a point of reference for the former state methodology. The expert testimony determining this latter methodology to be reasonable in the absence of a state-wide rule, policy, or approach is accepted.

    
    

47. Further, the existing and approved home health agencies only operate in one or two counties, whereas the need methodology which has been accepted projects need for, and contemplates the agencies operating in all four counties of District VII. HRS failed to demonstrate any rational or reasonable reason for limiting assignment of the need projection to one-third of the need projection per year or for limiting the applicant to any one county.

    
    

48. Nurse World further satisfied this criteria in that it is the primary agency providing nursing services to AIDS patients. AIDS patients are now being processed on a expedited basis for Medicare eligibility through-their disability. The other existing home health agencies have generally been unwilling to render home health services to AIDS patients.

    Nurse World also is the only agency which provides home health services for continuous passive motion patients.

    
    

49. Nurse World's reputation in District VII is excellent. It renders an extraordinary quality of care.

    
    

50. Even though the current lack of CON approval for Nurse World often causes a break in the continuity of care rendered a patient when Nurse World staffers are unable to continue to care for a former patient from whatever source who becomes Medicare eligible or a patient who is on Medicare and is then released from a hospital or nursing home to their own home and even though this series of events can have an adverse impact on the quality of care rendered particular patients on a case by case basis, this series of events is not quantifiable, is largely speculative, and does not demonstrate a "special need".

    
    

51. As detailed in the foregoing findings of fact Nurse World has a number of "firsts" in District VII. It was the first agency to take a baby home on a C-pap respirator, to care for an AIDS patient at home, to do blood gases at home, to take a patient on a ventilator, and the first to do home IV therapy. It is the high-tech, critical care, agency of choice by many physicians in the District.

    7. The need for research and educational facilities, including, but not limited to, institutional training programs and community training programs for health care practitioners and for doctors of osteopathic and medicine at the student, internship, and residency training levels.

    
    

52. The parties stipulated that this criteria was satisfied but Nurse World "waffled" by asserting that special consideration of Nurse World's application under this criteria is appropriate. Once stipulated, proof is unnecessary, but the evidence in this proceeding was overwhelming as to Nurse World's extraordinary efforts in training its staff and making its training available to the community at no cost.

    
    

    9. The immediate and long term financial feasibility of the proposal

    
    

53. The only acceptable need methodology presented demonstrates the need for one additional home health agency in District VII. Financial feasibility is really a function of need in labor versus capital intensive providers. The untapped market of potential Medicare visits for home health agencies reflects sufficient capacity for the entry of another home health agency into the market. Nurse World's past and potential growth demonstrate the financial feasibility required by this criteria.

    
    

    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.

    
    

54. Any demonstrated potential impact of Nurse World's entrance into the field is beneficial.

    
    

55. The regulatory criteria in Florida Administrative Code Rules 5.011(b)1. and 3. are satisfied by the Nurse World application and have generally been discussed and addressed

above under the statutory criteria. The approval of the Nurse World application will improve access by low income persons and the medically underserved. There is a need for another Medicare certified home health agency in District VII, especially one which renders the high-tech, critical care, AIDS responsive services, and professional educational services that Nurse World does.

RECOMMENDATION

Upon consideration of the foregoing findings of fact and conclusions of law, it is,

RECOMMENDED that a Final Order be entered granting Petitioner Nurse World a CON to establish and operate a home health agency in District VII (Orange, Osceola, Brevard, and Seminole counties), conditioned upon its providing 3 percent indigent and 3 percent Medicaid qualified services.

DONE and RECOMMENDED this 20th day of May, 1987, at Tallahassee, Florida.

ELLA JANE P. DAVIS, 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 20th day of May, 1987.

COPIES FURNISHED:

Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Eric J. Haugdahl, Esquire 1363 East Lafayette Street Suite C

Tallahassee, Florida 32302

John Rodriguez, Esquire Department of Health and 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

APPENDIX

The following constitute rulings pursuant to Section 120.59(2), Florida Statutes, upon the parties proposed findings of fact (FOF):

Petitioners proposed findings of fact:

1-4 To the extent not covered under "Background and Procedure," these are subordinate and unnecessary.

1. Covered in FOF 2.

2. Covered in FOF 8.

3. Covered in FOF 9.

4. Covered in FOF 3 & 10.

5. Covered in FOF 3.

6. Covered in FOF 10.

7. Covered in FOF 10.

8. Covered in FOF 12. 13-15 Covered in FOF 13.

16 Covered in FOF 16. 17-20 Covered in FOF 7.

1. Covered in FOF 14.

2. Covered in FOF 16-17.

3. Rejected as a conclusion of law; see FOF 13 and conclusions of law.

4. Accepted but subordinate to the facts as found. 25-26 Accepted but subordinate to the facts as found, cumulative FOF 7.

27-28 Rejected as unnecessary, as mere "puffing" and as subordinate to the facts as found. See FOF 10 and 18 on proposal 28.

29. Rejected as unnecessary and subordinate to the facts as found. See FOF 25.l

30-34 To the extent supported by the admissible direct competent substantial record evidence, these are covered in FOF 16; otherwise rejected.

35. Covered in FOF 6.l

36-37 To the extent supported by the record, covered in FOF 16, otherwise rejected.

38 Covered in FOF 10 and 15.

39-40 To the extent supported by the record and to the extent necessary to a determination of this cause, covered in FOF 17- 21, otherwise rejected.

41-42 Covered in FOF 19.

43-44 Covered in FOF 20-21.

1. Covered in FOF 22.

2. To the extent not covered in FOF 8 and 11 rejected as cumulative.

3. Unnecessary, as mere "puffing", and as subordinate to the facts as found in FOF 14 and 25.

4. Covered in FOF 23.

5. Covered in FOF 24.

6. Covered in FOF 14-16, and 25.

7. Covered in FOF 25.

8. Covered in FOF 25 but cumulative.

9. Accepted as true, but rejected as subordinate and unnecessary. Except as covered as to capability of Nurse World in FOF 14 and 25, it is also largely immaterial to these proceedings in that Mrs. WiIdermuth's child is not eligible for Medicare, cannot become eligible for Medicare and resides outside District VII in Volusia County.

54-56 Covered in FOF 25.

57 Covered in FOF 3 and 8. 58-50 Covered in FOF 25.

61-62 Subordinate to the facts as found. See FOF 39 and 42.

1. Cumulative, see FOF 23.

2. Covered in FOF 15.

65-73 and 75-78 Except as covered in FOF 11 and 16 these proposals are rejected as subordinate, unnecessary or cumulative to the facts as found.

74 Covered in FOF 11 and 18.

1. Covered in FOF 27-34.

2. Rejected as a conclusion of law.

81-89 Covered in FOF 26-35 and conclusions of law.

90 Accepted for the reasons set out in the transcript reference, but as a FOF it is subordinate and unnecessary. 91-95 Covered in FOF 26-35.

96 Rejected as irrelevant since no such out of state methodology was offered. See FOF 28.

97-105 Covered in FOF 30-35.

1. Rejected as a conclusion of law.

2. Covered in FOF 36.

3. Covered in FOF 37.

109-110 Accepted but unnecessary. 111-119 Covered in FOF 36-42.

120 Accepted but rejected as unnecessary.

Respondent's proposed findings of fact:

Docket for Case No: 85-002628

Orders for Case No: 85-002628