STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HILLHAVEN CONVALESCENT CENTER, INC., )
)
Petitioner, )
)
vs. ) Case No. 85-2991
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) FORUM GROUP, INC., Sponsor of Retirement ) Living of Dade County, )
)
Petitioner, )
)
vs. ) Case No. 85-3399
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) MANOR CARE, INC., (South Dade) )
)
Petitioner, )
)
vs. ) Case No. 85-3690
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was held in these cases on January 12, 14 and 15, 1987, in Tallahassee, Florida, before the Division of Administrative Hearings, by its designated Hearing Officer, Diane K. Kiesling.
APPEARANCES
For Petitioner
Hillhaven Convalescent
Center: Joseph Bianculli, Esquire
1233 20th Street, Northwest, Suite 800
Washington, D.C. 20036
For Petitioner
Forum Group Inc.: R. Terry Rigsby, Esquire
Catherine P. McEwen, Esquire
215 South Monroe Street, Suite 800 Tallahassee, Florida 32302
For Petitioner
Manor Care, Inc.: Donna H. Stinson, Esquire
The Perkins House, Suite 100
118 North Gadsden Street Tallahassee, Florida 32301
For Respondent Department of Health and
Rehabilitative Services: John Rodriguez, Esquire
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32301 ISSUE
The issue in this cause is whether the Department of Health and Rehabilitative Services (HRS) should approve the application for Certificate of Need of any one or more of the Petitioners for community nursing home beds in Dade County.
Petitioner, Manor Care, Inc., (Manor Care) presented the testimony of John D. Lee, Regional Director of Manor Care, who was accepted as an expert in nursing home operations: Alex Boyar, a financial analyst in the Planning Department of Manor, Care, who was accepted as an expert in health planning; and Craig
D. Thornton, a health care consultant, who was designated and accepted as an expert in health planning. Manor Care's Exhibits
1 and 2 were marked for identification and received into evidence.
Petitioner, Hillhaven Corporation, (Hillhaven) presented the testimony of Richard Ebersol, Regional Vice President for Operations with Hillhaven; Dan Lemon, an architect, who was designated and accepted as an expert in nursing home design and construction costs; Linda McClamma, District Director with Hillhaven for the East Coast of Florida, who was accepted as an expert in nursing home operation and nursing care; Julie Towne, Senior Health Planner with Hillhaven, who was accepted as an
expert in health planning; and Kenneth Conners, Jr., a C.P.A., who was accepted as an expert in accounting and health care accounting. Hillhaven's Exhibits 1, 2, 4, 5, 9, 12-20, 22-23 were marked for identification and received into evidence.
Appearing for Petitioner, Forum Group, Inc., (Forum) were David
C. Warner, Ph.D., a health care consultant, who was accepted as an expert in health care planning, including need analysis, demographic analysis and health care finance; Donald I. Craig, Jr., a health care planner with Forum, who was accepted as an expert in health care planning, nursing home development and statistical analysis; Rita McDonald, Director of Quality Assurance and Staff Development for Forum, who was designated and accepted as an expert in nursing home operations and quality assurance; and Lawrence J. Morton, Director of Financial Services in the Long-Term Care Division of Forum, who was designated and accepted as an expert in health care finance. Forum's Exhibits
, and 13 were marked for identification and received into evidence.
Respondent, Department of Health and Rehabilitative Services, (HRS) offered the testimony of Elizabeth Dudek, Health Facilities and Services Consultant Supervisor in the Office of Community Medical Facilities at HRS, who was accepted as an expert in CON review.
Prior to the hearing, the parties stipulated that each Petitioner had timely filed its letter of intent and application, had been deemed complete, and upon denial had timely filed its petition for formal hearing and thus had standing in this proceeding. The parties also stipulated that each met the minimum requirements for the granting of a CON other than proof of need and long-term financial feasibility as it relates to need, but each Petitioner reserved the right to offer evidence of the superiority of its application.
The parties submitted proposed findings of fact and conclusions of law. All proposed findings of facts and conclusions of law have been considered. A ruling has been made on each proposed finding of fact in the Appendix attached hereto and made a part of this Recommended Order.
FINDINGS OF FACT
The principal issue in this case is the appropriate interpretation of Rule 10-5.011(1)(k) [formerly cited as 10- 5.011(21)], Florida Administrative Code, to determine the need for new community nursing home beds in Dade County; specifically, the Petitioners and the Department differ as to the appropriate "approved bed" inventory data under the Rule methodology.
The Department stipulated that each of the Petitioner' applications, filed in January, 1985, meets all minimum statutory and rule criteria necessary for approval, other than proof of need and long term financial feasibility as it relates to need, but left it to the Petitioners to demonstrate their relative superiority.
The Department relied solely upon Rule 10-5.011(1)(k), Florida Administrative Code (hereafter "The Rule"), to determine bed need in this case.
The Rule actually provides two different methods of calculating need: Paragraph 2.e. (formerly cited as 10- 5.011(21)(b)5.) of the Rule sets out the so-called "poverty adjustment," which provides that in departmental planning districts where the percentage of persons age 65 and over living in poverty exceeds the statewide poverty rate for persons in that age group and the sum of the "currently licensed and certificate of need approved beds" is less than 27 beds per thousand age 65 and over, the district shall be allocated a total of 27 beds per thousand persons age 65 and over "in the current year."
The remaining paragraphs of the Rule set out the other methodology which projects future bed need according to a "three year planning horizon" in cases where the criteria for applying the poverty adjustment are not satisfied.
While Paragraph 2.e. of the Rule does not specify the point in time at which "currently licensed and certificate of need approved beds" are to be counted for purposes of making the threshold calculation, it does refer to "LB" which term is clearly defined in Paragraph 2.g.
Elfie Stamm, the person responsible for development of all rules pertaining to Certificates of Need (CON), who was designated by the Department to respond to a request for deposition under Rule 1.310(b)(6), Florida Rules of Civil Procedures, testified that the word "currently" in Paragraph 2.e. of the Rule modifies both "licensed" and "Certificate of Need approved beds."
Paragraph 2.g. of the Rule specifically provides that review of applications for the January, 1985, batching cycle "shall be based upon" the number of licensed beds as of December 1, 1984, and that this count of "currently licensed beds" governs the threshold calculation of the poverty adjustment.
The Department's witness, Elizabeth Dudek, testified that the Department's policy consistently has been to count "currently approved beds" for purposes of the threshold
calculation of the poverty adjustment as of the date that she, as supervisor of health facilities services consultants, signs the "State Agency Action Report" regarding the applications under review.
In this case, Ms. Dudek signed the State Agency Action Report (SAAR) on June 22, 1985.
The Department's practice of counting approved beds as of the date Ms. Dudek signs the SAAR for purposes of the threshold calculation of the poverty adjustment is irrational and inconsistent with both the letter and purpose of Paragraph 2.e. of the Rule.
The poverty adjustment portion of the Rule does not provide for calculation of need over a three-year planning horizon, as is provided elsewhere in the Rule, but specifically requires calculations of "current" need based on "current" population and inventory figures.
It would be inconsistent with this policy to calculate such "current" need with data measured at different points in time, and the calculation as described by Ms. Dudek could lead to irrational results; for example, beds which were licensed after the December 1, 1984, cutoff for licensed beds and before the June 22, 1985, HRS cutoff for approved beds would be counted neither as licensed nor approved beds, and would "disappear" from the inventory. Moreover, a count of some beds at a point several months later than the point in time at which other aspects of "current need" are measured, (i.e., not in relation to a three- year planning horizon) would give a distorted measure of such current need.
Notwithstanding Ms. Dudek's testimony, that the Department has consistently applied its policy regarding the point in time at which "current" data is measured, the Department's position has not been consistent.
An example of the Department's inconsistency is the October 27, 1986, memorandum from HRS general counsel, Steven W. Huss, which purports to set out the Department's position regarding the appropriate interpretation of the Rule. That memorandum provides, in part, that "'Current' data is data current as of the date of the application."
Ms. Dudek admits that the policy she applied in this case is contrary to the Huss memorandum and the Department's interpretation of Paragraph 2.e. as enunciated by Ms. Stamm.
In light of the testimony and evidence presented at the hearing, it is clear that the poverty adjustment should have been applied even according to the Department's application of the Rule.
The first prong of the poverty adjustment is met in that the District poverty level of persons age 65 and over exceeds the statewide poverty level for that age group.
The "current" district population of persons age 65 and over is 301,552.
On December 1, 1984, there were 5,626 licensed beds in the District and 1,990 approved beds in the District.1
If the poverty adjustment is calculated using the December 1, 1984, data, the poverty adjustment would apply as follows:
5626 + 1990 = 0.0253 = 25.3/1000
301,552
The Department's witness testified that she performed the threshold poverty adjustment calculation on June 22, 1985, using the approved bed figure which she believed to be current on that date, 2710, as follows:
5626 + 2710 = 0.0276 = 27.6/1000
301,552
As a result of this calculation, she concluded that the poverty adjustment was inapplicable to the review of the applications here at issue.
However, two of the certificates of need which were counted by the Department as "approved" as of June 22, 1985, were in fact not approved and issued until after that date. [Forum Ex. 13 indicates that CON No. 3022, for 120 beds, was granted to Beverly Enterprises (South Dade) on June 24, 1985, and CON No. 3021, which Ms. Dudek counted as 240 beds, was granted to Dade Manor on July 3, 1985.]
Ms. Dudek conceded that she had counted these 360 beds as "currently approved" as of the date she signed the SAAR on June 22, 1985, when in fact they were not approved until after that date.
On cross-examination, Ms. Dudek conceded that if these
360 beds had not been counted as "approved" as of the date she signed the State Agency Action Report which she had described as the policy in fact followed by the Department then the appropriate calculation of the poverty adjustment would have been:
5626 + (2710-360) = 0.02645 = 26.45/1000
301,552
Had this last calculation been performed, the Department's witness conceded it would have indicated not only that the poverty adjustment should have applied, but that there would have been sufficient bed need to approve all three applications.
The Department never introduced evidence to substantiate its use of 2710 as the number of approved beds as of the date of the SAAR.2
The SAAR indicates that there were 2170, not 2710 approved beds on that date, indicating Ms. Dudek's conclusion may have been based on a significant typographical error.
Using the 2170 SAAR number as the number of approved beds, the calculation would have been;
5626 + 2170 = .0258 = 25.8/1000
301,552
This includes the 360 beds not approved until after the date the SAAR was signed by Ms. Dudek. If those beds are then deducted, the calculation would be:
5626 + (2170-360) = 0.0246 = 24.6/1000
301,552
Further, the Department included 600 beds awarded out of Petitioners' January, 1988, planning horizon to applicants from an earlier batching cycle without those applicants updating or amending their respective CON applications to address that planning horizon.
It is clear that the Department made significant calculation errors in the SAAR, and that the poverty adjustment should have been applied to measure need for these applications.
The Petitioners presented extensive evidence regarding the calculations of bed need according to the appropriate application of the poverty adjustment, employing the application of "current" approved beds as of December 1, 1984:
LB + AB = 5626 + 1990 = 0.025256
POPE 301,552
PA = 0.027 x 301,552 = 8142
SPA = LBD x PA = 5386 x 8142 = 725 beds LB 5626
Net Need - 7794-5386(0.9 x 1990)725 beds
Even if the Department's less rational measure of "current" approved beds as of the date of the SAAR was employed,
however, there would be more than enough need under the Rule to approve all three applications:
SPA = 7794
Net Need = 77945386(0.9 x 2170)455 beds
It is significant to note that the Department's only witness agreed with Petitioner's experts that had the poverty adjustment been calculated as set forth in paragraph 32 above, there would have been sufficient bed need to approve all three applicants.
THE FORUM PROPOSAL
Forum proposes to build a 120-bed nursing home as an integral part of a retirement living community offering a continuum of services on one campus.
Forum currently owns and operates 12 such retirement living centers in the United States as well as 20 free-standing nursing homes.
The total retirement living facility proposed by Forum includes retirement apartments, an assisted living facility and a nursing home.
In November, 1986, in preparation for final hearing, Forum updated its January, 1985, application for the 120-bed nursing home to reflect more current information.
Forum presented evidence at the hearing that if less than a 120-bed need was found, it was ready and able to build a 60-bed facility which was also financially feasible.
The total projected cost of the nursing home facility is $4,109,567, including the cost of approximately 3 acres of land.
Forum proposes to offer the full range of services which characterize a licensed, Medicare-certified, skilled and intermediate care facility, including ventilator care, IV treatment, and nastrogastric tube feedings. No costs are projected for the additional staff and equipment needed for ventilator patients.
Upon opening, Forum is prepared to offer respite care, adult day care, meals on wheels and hospice care if need for such programs is demonstrated in the community.
Medicaid certification would be sought for 48 beds with an additional five beds certified for Medicare patients.
Forum will annually provide a $10,000 fund for indigent care and for those services not covered by Medicaid, Medicare and other reimbursement programs.
The nursing facility would be composed of 40 private room (1 bed) and 40 semi-private rooms (2 beds) in a two-story building.
Forum projects an occupancy rate of 63.25% at the end of the first year, and 95% at the end of the second year, and the fill up rates are reasonable and consistent with the experience of other Forum facilities.
Daily charges for Forum nursing home patients are reasonable and consistent with Forum's experience and are based on a survey of rates in Dade County and range from $50.64 for Medicaid patients, to $60 for Medicare patients, to $75 for a private pay patient in a private room.
Forum, as a national health care provider, will benefit generally from economies of scale in the area of staff training and availability, purchasing, and varieties of nursing programs, and specific economic benefits from this project will result from shared facilities, such as kitchen, dining and common grounds, as well as shared staff in those areas.
Forum has a commitment to provide quality care with its continuum of services on one campus and is consistent with the state and local health plans.
Forum would seek a superior rating for this facility as is its policy for its facilities and as it has done in other states with similar rating systems.
To promote quality of care Forum thoroughly assesses residents' needs and develops a plan of care to satisfy those needs, including a quality assurance program, and will be staffed at a higher than minimum level with skilled professionals.
In addition, Forum patients would benefit from an environment which offers and encourages interaction with the healthier residents in other portions of the retirement living center which Forum's study shows results in substantially shorter lengths of stay.
Forum is in a very strong financial position and is prepared and able to finance construction with cash reserves, thereby saving debt service charges that would otherwise apply; further, this strong financial position will allow Forum to fund any start-up losses in the first year, thereby ensuring financial feasibility in the short term.
Forum stated a strong commitment to this project and is prepared to proceed as soon as it receives approval.
THE MANOR CARE PROPOSAL
Manor Care proposes to build a 120-bed nursing home.
The total cost of Manor's Care's proposal is projected at $4,513,500.
Manor Care proposes a 2 story facility with 18 1-bed rooms, 33 2-bed rooms, and 12 3-bed rooms.
The number of 3-bed rooms was tripled in the updated application in order to, among other things, reduce the size of the facility for which construction costs would otherwise be higher.
Manor Care has 9 existing Florida facilities, 4 of which were acquired by purchase and 5 of which were built by Manor Care over the last 4 1/2 years.
All homes built by Manor Care have been within budget, constructed and licensed on time.
All three of the homes which were constructed under the supervision of Manor Care's current Regional Director, have received superior licenses, the highest rating available.
The proposed nursing home would have the full range of nursing services including skilled and intermediate care, the full range of therapies (physical, occupational, speech, respiratory) and respite care and adult day care. Manor Care provides in-house physical therapists, speech pathologists, and other therapists, which the other applicants provide only by contract, if at all.
Manor Care provides respite care whenever beds are available.
Manor Care provides a chaplaincy program, by contracting with local chaplains to counsel family, staff and residents.
It is the company philosophy of Manor Care to be as involved in the local community as possible.
Manor Care provides educational programs for residents, family and staff.
Manor Care provides up to $750 per year tuition and expense for staff members wishing to further their education in the field.
Manor Care has a centralized, comprehensive, quality assurance program, which consists of a set of standards compiled by taking the strictest standards of all federal and state guidelines in all states in which Manor Care operates. The program is implemented by a quality assurance team which does a comprehensive, unannounced inspection, similar to, but stricter than, a state survey.
Manor Care provides higher than average Medicare utilization, which means that the level of care is higher than average. Medicare patients generally require a higher skilled level of care than most nursing home residents.
Manor Care has committed 42 of its 120 beds for Medicaid utilization, and all services are offered to all patients regardless of their ability to pay. This percentage of Medicaid beds is below the community average for Medicaid utilization.
Manor Care has an emphasis on rehabilitative treatment. Approximately 35-40% of residents in Manor Care facilities return home.
Manor Care proposes as part of this application to dedicate a 30-bed wing for the provision of specialized care to Alzheimer's patients.
This specialized care is not a "new service" added to its application. Rather, it is a recognition of state of the art care, and a rearrangement of services that would otherwise be provided on a less coordinated basis.
There is a need for an Alzbeimer's program in Dade County, and Manor Care has the ability and the experience to provide a high-quality Alzheimer's program.
Manor Care projects an occupancy rate of 58% at the end of the first year and predicts reaching and maintaining 90% occupancy midway through the second year.
The daily rates projected for this facility are $69.21 for Medicaid, $126.62 for Medicare, and an average for private pay patients of $95.62; Alzheimer's patients would pay $94.00 for a semi-private room and $111.00 for a private room.
Manor Care's rates are in the upper half of current rates in Dade County.
Manor Care proposes to provide the highest nursing staff to patient ratio of all three applications.
Manor Care's pro formas and charges are reasonable and are based upon Manor Care's experience in opening and operating nursing homes in Florida.
Manor Care's project is financially feasible. 81. Manor Care proposes to locate in South Dade, where the need is greatest. There are only 22.3 beds per thousand in South Dade
and greater than 27 beds per thousand in the rest of Dade County.
Furthermore, three of eight homes located in South Dade County are not Medicaid-certified, so there is a need for additional Medicaid beds in South Dade County.
THE HILLHAVEN PROPOSAL
The Hillhaven corporation is the country's second largest owner and operator of nursing homes, with over 450 facilities throughout the United States, of which 15 operating facilities and three under construction are located in Florida. Hillhaven maintains district offices is Sarasota and Boca Raton, Florida, from which its management, personnel and professional services consultants supervise its Florida operations.
Hillhaven proposes to construct a new 120-bed skilled and intermediate nursing facility in the southern part of Dade County as delineated by the District Health Council.
The District Plan provides that nursing home beds should be available to the community at a ratio of 27 beds per 1000 population age 65 and over, and should be geographically accessible. The ratio of licensed and approved beds to elderly population in Dade County, measured at any appropriate point in time, is less than 27 per 1000. Therefore, the Hillhaven application is consistent with this criterion.
Evidence also was presented that the ratio of beds to population in South Dade County, as defined by the District XI Health Council, is 22.3 per 1000, substantially below that for District XI as a whole. Hillhaven proposes to located its facility in South Dade County, so is consistent with this District Health Plan criterion.
Hillhaven proposes to offer skilled nursing services, including round the clock nursing, physical therapy, occupational
therapy, oxygen therapy and rehabilitative services in areas of restorative nursing such as bowel and bladder training, activities of daily living restoration, restorative feeding, reality orientation, recreation therapy, personal grooming and resident council.
Hillhaven has successfully developed several nursing homes from the Certificate of Need phase through licensure in Florida and has never failed to complete construction of a CON- approved facility, nor has it ever had a CON revoked in Florida.
Hillhaven has never exceed the CON approved budget in constructing a new Florida facility.
sO. Hillhaven proposes to achieve a payor mix of 60% Medicaid, 30% private pay and 10% Medicare at its South Dade facility. This is 72 beds for Medicaid and 12 beds for Medicare.
Hillhaven's corporate representative testified that Hillhaven's projected payor utilization differs from that set out in the original application filed in January, 1985, to take account of demographic changes during the past two years, including increased Medicaid utilization and unmet demand for Medicaid beds.
The current Medicaid utilization in District XI exceeds 55%, and three of the existing eight facilities located in South Dade County do not accepted Medicaid patients.
Hillhaven presented evidence that based on utilization of its existing facilities in Florida, accessibility problems for Medicaid patients to existing facilities, and the demographics in South Dade County, 60% Medicaid utilization is achievable.
Hillhaven's system-wide Medicaid occupancy is between
50 and 53%, and Medicaid utilization at several existing Hillhaven facilities in Florida exceeds 60%.
Superior licenses are granted to approximately 20% of all Florida facilities on the basis of extra staffing, on-staff consultants, superior compliance with regulatory and survey criteria and excellence of care.
Hillhaven presented evidence that of its fifteen Florida facilities, nine currently have superior license.
Hillhaven also was recommended for a tenth superior license shortly before the hearing. It has a conditional license at one Florida facility in Dade County.
Hillhaven offered evidence that several of its
superior-license facilities maintain Medicaid occupancy over 60%.
Hillhaven has a quality assurance program, which employs professional service consultants (nurse consultants) and dietary consultants to monitor quality of care and to set up systems designated to insure quality of care.
Hillhaven has a screening and assessment system used to place incoming patients in an appropriate setting and to- determine the appropriate level of care.
Hillhaven has been able successfully to recruit and hire staff for its Florida facilities. Hillhaven provides staff in each of its facilities who are fluent in languages other than English.
The staffing pattern projected for Hillhaven's proposed facility exceeds the regulatory requirements for the State of Florida and represents the level necessary to obtain a superior license in Florida.
Hillhaven facilities also use support groups and social work designees to provide support to residents' families.
Hillhaven's Florida facilities have set up resident councils in each facility to assist in making residents aware of their rights and to afford residents the opportunity to discuss their problems and make suggestions for improvements.
All Hillhaven facilities in Florida provide physical therapy, occupational therapy and speech therapy.
Hillhaven facilities emphasize a restorative nursing program including a bowel and bladder retraining program, a restorative feeding program and a living restoration program which emphasizes personal care and grooming skills. Hillhaven, also emphasizes activity and recreational therapy programs, and its facilities emphasize continuing the residents' link with the community through activities including the "Adopt-a-Resident" program, health fairs, and Heart Association fundraising drives.
The Hillhaven Foundation, a not-for-profit educational foundation specializing in educating health professionals and the public about Alzheimer's disease, serves as an educational resource to train Hillhaven staff.
Hillhaven projects achieving 95% occupancy in 12 months, and presented evidence that such a fill rate is realistic based on its projected payor mix and Florida experience.
The Hillhaven proposal is financially feasible.
Hillhaven's proposes to build a new 120 bed facility for a total project cost of $3,432.526.
Hillhaven proposes to build a 38,323 square foot one- story H-shaped facility designed for construction and operational efficiency.
Hillhaven's projected daily rates range from $58 to
$62.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has
jurisdiction over the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.
Petitioners' applications, which were timely filed in January of 1985, address the January 1988 planning horizon. Petitioners have not amended their applications to address another planning horizon or materially changed or amended their application in any other respect.
This case depends upon interpretations or use of Rule 10-5.011(1)(k), Florida Administrative Code, and specifically, upon the appropriate count of "approved" beds. The Rule specifically sets dates for counting licensed beds, and for applications filed in January, the date is the preceding December
The Rule does not specifically state when approved beds are to be counted.
From the standpoint of rational health planning, Rule 10-5.011(1)(k) must be interpreted to require that both existing and approved beds be counted as of the same date. In this instance, existing and approved beds should have been counted as of December 1, 1984.
The number of licensed and approved beds on that date was not in dispute. There were 5626 license beds, and 1990 approved beds. It is also undisputed that if approved beds are counted on the same dates as licensed beds, there is a need for 725 beds, enough for all three applicants.
The Department's stated policy at hearing was to count approved beds at the time of the State Agency Action Report (SAAR). This policy was not justified on the record in this hearing. To the contrary, the policy is arbitrary, illogical, and inconsistent. It is inconsistent to count approved and
licensed beds at different times, and the result of doing so can be absurd. It is illogical, since the count of beds is measured against population at a given point in time. If beds are counted at times six months apart, they should not be measured against the same population figure. The most reasonable approach is to count approved beds, for purposes of applying the poverty adjustment factor, at the same point licensed beds are counted.
However, even using the HRS policy, a need for all` three applications is shown when correct data are used. Evidence was unrefuted that Final Orders which accounted for 360 of the beds counted as approved were entered after the SAAR. There was no evidence presented to justify counting beds before Final Order approval. If these 360 beds are not counted, there is a need for enough beds for all three projects.
The "poverty adjustment" (subparagraph 2(e) of Rule 10-5.011(1)(k)) applies in this case.
Under the appropriate interpretation of Rule 10- 5.011(1)(k), competent, substantial evidence in the record establishes a net need of 725 beds for the January 1988 planning horizon. There is no competent evidence in the record supporting HRS's decision that insufficient need existed at the time the SAAR was issued, or now exists, to approve all of Petitioners' applications. HRS acted arbitrarily and capriciously in counting a approved beds as of the date the State Agency Action Report was signed by Elizabeth Dudek for purposes of the computing bed need pursuant to Rule 10-5.011(1)(k). HRS acted arbitrarily and capriciously in failing to compute bed need using the "poverty adjustment" clause of Rule 10-5.011(1)(k).
Even if the Department's position that approved beds should be counted as of the date Ms. Dudek signs the SAAR is correct, the Department erred in including the following beds in the determination of approved beds:
CON 3022 120 beds (approved June 24, 1985)
CON 3021 240 beds (approved July 3, 1985)
TOTAL 360 beds
Petitioners met all applicable statutory and rule criteria, including need for the proposed beds, as well as all applicable criteria of the Florida State Health Plan and the 1985 District XI Health Plan. There is competent substantial evidence to show that each proposed 120-bed facility is financially feasible and economically efficient.
Since it is so clear that HRS incorrectly calculated need and that sufficient need exists for all three proposed nursing homes, it is unnecessary to make further comparative analysis of the three applications.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order granting Certificates of Need No.
3900, 3894, and 3893 to Manor Care, Inc., Hillhaven Convalescent Center, and Forum Group, Inc., each for a 120-bed nursing home in Dade County, Florida.
DONE AND ENTERED this 8th day of April, 1987, in Tallahassee, Florida.
DIANE K. KIESLING, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1987.
ENDNOTES
1/ HRS either made an error in the State Agency Action. Report in its count of "currently" licensed beds or has changed its policy for determining the point at which "currently" licensed inventory is measured. The SAAR reports 5686 "currently" licensed beds in Dade County, including 120 beds at Biscayne Methodist Nursing Center and 180 beds at Gramercy Park Nursing Center. According to HRS' Quarterly Community Nursing Home Status Report, the Biscayne and Gramercy beds were licensed in April and June, 1985, respectively. HRS' witness did note adequately explain this discrepancy at the hearing, but the inference is that at the time the SAAR was prepared, HRS measured that "current" inventory of both licensed and approved beds as of the date of the SAAR, and has since changed that policy. HRS now contends that the appropriate measure of "currently" licensed beds under the Rule is as of December 1, 1984, which all parties agree was 5626 in the District, and 5386 in Dade County.
2/ HRS Exhibit 1, which was offered but not admitted into evidence, includes the figure 2710 as "approved beds" but does not set out the source of this figure.
COPIES FURNISHED:
Gregory L. Coler, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Joseph Bianculli, Esquire
1233 20th Street, N.W. Suite 800
Washington, D.C. 20036
R. Terry Rigsby, Esquire Catherine P. McEwen, Esquire
215 South Monroe Street, Suite 800 Tallahassee, Florida 32302
Donna H. Stinson Esquire
The Perkins House, Suite 100
118 North Gadsden Street Tallahassee, Florida 32301
John Rodriguez, Esquire Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
APPENDIX
The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case.
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Hillhaven Corporation
1. Proposed findings of fact 28, 69, and 72 are rejected as unnecessary.
2. Proposed findings of fact 33, 46, 47, 48, 49, 50, 51, 52, 53,
54, 55, 59, and 76 are subordinate to the facts actually found in this Recommended Order.
3. Each of the following proposed findings of fact are adopted in substance or as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact:
1(1); 2(2); 3(3); 4(10); 5(4); 6(5); 7(6); 8(8); 9(9); 10(10);
11(11); 12(12); 13(13); 14(14); 15(17); 16(18); 17(19); 18(20);
19(21); 20(22); 21(23); 22(24); 23(25); 24(26); 25(27); 26(28);
27(29); 29(31); 30(32); 31(33); 32(34); 34(83); 35(84); 36(85);
37(86); 38(87); 39(88); 40(89); 41(90); 42(91); 43(92); 44(93);
45(94); 56(95); 57(96 and 97); 58(98); 60(99); 61(100); 62(101);
63(102); 64(103); 65(104); 66(105); 67(106); 68(107); 70(108);
71(109); 73(110); 74(111); and 75(112).
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Forum Group, Inc.
Proposed findings of fact, 17, 18, 19, 20, 21, and 22 are rejected as irrelevant.
Proposed findings of fact 62, 63, 64, and 86 are unnecessary.
Proposed findings of fact 68, 69, 80, and 84 are subordinate to the facts actually found in this Recommended Order.
Each of the following proposed findings of fact are adopted in substance or as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact:
16(1-16); 23-61(17-55); 65-67(56-58); 70(62); 71(70); 72-74(75-
77); 75(83); 76(84); 77(83); 78(97); 79(110); 81(67); 82(90);
83(70); and 85(75).
Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Manor Care
1. Proposed findings of fact 14, 15, 16, 28, 51, 54, 55, 57, 59,
60, 61, 62, 63, 64, 67, 68, 69, and 70 are subordinate to the facts actually found in this Recommended Order.
Proposed findings of fact 53 and 58 are unnecessary.
Each of the following proposed findings of fact are adopted in substance or as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 5(1); 6(2); 7(2); 8(4); 9(5); 10(6); 11(8); 12(9); 13(11); 17(15); 18(17-20); 19(21); 20(23); 21(23); 22(23); 23(25); 24(26); 25(27-29); 26(32); 27(33); 2944(59-74); 45-50(78-83); 52(97); 56(90); 65(36);and 66(41).
Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of
Health and Rehabilitative Services
Proposed finding of fact 1 is unnecessary.
Proposed findings of fact 2, 3, 4, and 6 are subordinate to the facts actually found in this Recommended Order.
Proposed finding of fact 5 is adopted in Finding of Fact 19.
Proposed findings of fact 7, 8, and 9 are rejected as being unsupported by the competent, substantial evidence.
| Issue Date | Proceedings |
|---|---|
| Apr. 08, 1987 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 08, 1987 | Recommended Order | Counting approved beds at the time of State Agency Action Report is wrong. Recommend poverty adjustment. |
