STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HEALTH CARE ASSOCIATES, INC., ) d/b/a SURREY PLACE OF POLK COUNTY, )
)
Petitioner, )
)
vs. ) CASE NO. 87-0680
)
DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, and ) GENE D. LYNN, d/b/a CAREAGE )
CENTRAL HEALTHCARE CENTER, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on January 20-22, 1988, in Lakeland and on January 28, 1988, in Tallahassee, Florida. The issue for determination in this proceeding is whether the petitioner and/or the respondent Careage are entitled to Certificates of Need to establish 120-bed nursing homes in Polk County, Florida.
APPEARANCES
For Petitioner: Reynold Meyer
F. Phillip Blank, P.A. 204-B South Monroe Street
Tallahassee, Florida 32301
For Respondent, Edgar Lee Elzie, Jr.
HRS: MacFarlane, Ferguson, Allison & Kelly Post Office Box 82
Tallahassee, Florida 32302
For Respondent, Robert S. Cohen Careage: Haben & Culpepper, P.A.
Post Office Box 10095 Tallahassee, Florida 32302
INTRODUCTION
After the preliminary decisions of HRS to award a Certificate of Need to Gene D. Lynn, d/b/a Careage Central Healthcare Center (Careage), to establish a 120-bed nursing home in Polk County and to deny the application of Health Care Associates, Inc., d/b/a Surrey Place of Polk County (Surrey), for a similarly- sized nursing home, Surrey requested an administrative hearing. There were other applicants in the same batching cycle who also requested a hearing, but later voluntarily dismissed their petitions.
In support of its position that it is entitled to a Certificate of Need, Surrey presented the testimony of the following witnesses: John A. McCoy, accepted as an expert in nursing home development and administration, including financial feasibility in the operation of nursing homes; Lance Anastasio, accepted as an expert in health care administration; Dennis O'Keefe, accepted as an expert in architecture and the design and construction of health care facilities; Robert Phillips, accepted as an expert in mortgage financing, specifically with regard to health care facilities; and Thomas J. Konrad, accepted as an expert in health care planning. Surrey's Exhibits 1 through 3 and 7 through 10 were received into evidence.
Careage presented the testimony of Art Heitlauf, accepted as an expert in nursing home financing; William T. Loder; Marlin Huisinga, accepted as an expert in nursing home design and architecture; Frank L. Cushing, accepted as an expert in nursing home construction costs and project development cost estimating; Carmen Steiner, accepted as an expert in nursing home administration and operation, including staffing and quality assurance; Deborah J. Krueger, accepted as an expert in health care planning and finance; and Mary Jean Etten, accepted as an expert in gerontological nursing and, in general, the field of nursing. Careage's Exhibits 1 through 11 were received into evidence.
HRS presented the testimony of Robert Sharpe, accepted as an expert in the area of health planning, and its Exhibit 1 was received into evidence.
Subsequent to the hearing, all parties filed proposed recommended orders. To the extent that the parties' proposed factual findings are not included in this Recommended Order, they have been rejected for the reasons set forth in the Appendix hereto.
FINDINGS OF FACT
Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the stipulations of the parties, the following relevant facts are found:
Surrey and Careage each timely filed their letters of intent and applications for Certificates of Need to establish 120-bed nursing homes in Polk County in the July 1986, batching cycle. Pursuant to the nursing home need methodology rule, there is a numeric need for 168 nursing home beds in Polk County in July of 1989. A Stipulation and Settlement Agreement enter into prior to the final hearing resulted in the award of 40 beds to other applicants, thus leaving a numeric need for 128 beds for the planning horizon addressed by the applications at issue in this proceeding. No evidence of numeric need beyond that established by the nursing home need methodology rule was presented by Surrey or Careage.
Health Care Associates (HCA) is owned by John A. McCoy and Stanford L. Hoye and was formed in 1977 to develop, design, build and manage skilled nursing facilities and retirement facilities throughout the country. It currently owns, operates or is developing approximately 18 skilled nursing facilities in the State of Florida, including a 120-bed nursing home in Winter Haven, known as Brandywine. All HCA licensed nursing home facilities in Florida hold a "Superior" rating. HCA has a documented history of implementing its Certificates of Need within the statutory time frame.
HCA now proposes to establish a second 120-bed skilled nursing home in Winter Haven to be known as Surrey Place of Polk County. The two HCA facilities
in Winter Haven will be independent and competing facilities, through there will be a shared utilization of training programs. This proposed facility is to be built in conjunction with a 60-bed personal care facility (an adult congregate living facility) which will share common services, such as administration, laundry and dietary services. The costs related to the personal care facility are not included in Surrey's Certificate of Need application. Surrey has determined that the project will be located on one of two sites in Winter Haven. Both sites are properly zoned, and Surrey already owns one of the sites.
The projected total project cost for the proposed Surrey 120-bed skilled nursing home facility is $3,000,000. The costs associated with land acquisition and site development, furniture, fixtures and equipment and architectural fees appear reasonable and are in line with HCA's past experiences in developing nursing homes in Florida. The construction cost for building the facility--$2,146,000 or $48.70 per square foot--is low because HCA owns the company which will construct the facility. Construction will be done at cost and at no separate profit to HCA. The Surrey proposal results in a construction cost per bed figure of $17,883; an equipment cost per bed figure of $2,084; and an operating cost per bed figure of $20,031.75. The total project cost of
$3,000,000 results in a cost per bed of $25,000.
Surrey proposes to obtain financing for 87% of the total project cost, or $2,600,000, and to provide owner equity for the remaining $400,000. Meritor Savings is ready, willing and able to finance the project and Dr. McCoy and Mr. Hoye, the owners of HCA, have the financial ability to make the equity contribution.
Surrey's facility will contain 44,000 gross square feet and will be comprised of 8 private rooms and 56 semiprivate rooms. The schematic drawing contained in the application is now somewhat outmoded compared to how HCA is currently building nursing facilities. In its newer facilities, the patient rooms have vaulted ceilings and bathing units on outside walls with cubical glass which admits more light.
HCA's existing nursing home facility in Winter Haven enjoys a good reputation amongst physicians who are on the staff of Winter Haven Hospital and refer patients to that facility. At the proposed facility, Surrey intends to offer a continuum of care by providing independent living units adjacent to the nursing home. In addition to providing skilled and intermediate level nursing services, Surrey intends to offer various programs including physical therapy, speech therapy, hearing and occupational therapy, social services, recreational programs and agreements with other organizations to ensure the highest quality of discharge planning and follow-up services. While not listed in its application, Surrey intends to provide services to Alzheimer patients, though not in a separate and distinct unit. As a part of its social and recreational services, Surrey intends to provide programs such as pet therapy, creative writing, senior olympics and a grandchild program. In addition, Surrey intends to offer adult day Dare and respite care within the confines of the personal care living facility. Surrey does not intend to offer subacute care services at the proposed facility.
The total staffing of 72.4 for the proposed Surrey facility includes
5.5 full-time equivalent registered nurses, 5.5 full-time equivalent licensed practical nurses and 34 full-time equivalent nurse's aides. This equates to a ratio of 1 registered nurse per 21.8 patients, 1 licensed practical nurse per
21.8 patients and 1 aide per 3.5 patients.
As a means of attracting nursing staff, Surrey offers recruitment seminars at nursing schools and has associated with Polk Community College to aid in training and recruitment. All HCA facilities have accreditation programs for certified nursing assistants (CNAs), and its existing Winter Haven facility is utilized by Polk Community College for the on-site training of CNAs. In order to aid its recruitment efforts, HCA is enhancing its benefit package and also is building child day care centers as an additional benefit for staff members. These centers are also available to visitors to the nursing home. The cost of the child care centers is not included within Surrey's total project cost. HCA's director of quality assurance works with the assistant directors of nurses in each facility to design and promote continuing education programs for the professional nursing staff.
HCA has a history of providing services to Medicare and Medicaid patients in its Florida facilities. Surrey proposes to devote 49% of its patient days to Medicaid patients, 15% to Medicare patients, 1% to V.A. patients and 35% to private pay patients. These calculations are based upon
HCA's experience in other existing facilities. The elderly poverty rate in Polk County is 16.6%.
Upon opening, Surrey proposes the following per diem charges: $53.00 for Medicaid and V.A. patients, $65.00 for Medicare patients, $90.00 for private pay patients in a private room, and $62.00 for private pay patients in a semiprivate room. In answers to interrogatories served in November of 1987, Surrey listed its projected charges as $70.00 for private pay, $76.00 for Medicare and $64.00 for Medicaid patients.
The figures used in Surrey's pro forma are based upon the actual experience of HCA in developing similar facilities. The pro forma projections are based upon Surrey's expectation of a 97% occupancy rate at the end of year one and throughout year two. Other than the Administrator's salary being admittedly low, the pro forma projections appear reasonable. Surrey anticipates a net loss in the first year of operation of $349,120 and a net profit in the second year of $121,150. In terms of cash flow, Surrey projects a negative cash flow of $143,440 at the end of its first year and a positive cash flow of
$326,770 at the end of its second year of operation.
Surrey's proposal is consistent with the goals, objectives and policies contained in the nursing home and long-term care components of the District VI Health Plan and the State Health Plan.
Careage Investment, Inc., owned by Gene D. Lynn, has been in existence since May 1, 1962, and has developed and constructed over 250 medical complexes, hospitals, and nursing homes throughout the United States and Puerto Rico. Careage currently has four operating nursing homes, with a fifth having recently been opened. These nursing homes include a 59-bed facility in Coupeville, Washington, a 99-bed facility in Tracy, California, a 232-bed facility in Phoenix, Arizona, a 114-bed facility in Oroville, California, and the new facility of 144 beds in Chico, California.
Careage proposes a 120-bed skilled nursing home to be located in Lakeland. The facility will include a separate and distinct 21-bed unit for Alzheimer patients and a 10-bed subacute care unit. While Careage does not presently own property for the proposed facility, it has identified several available four-acre sites which have utilities and direct access to public streets. Its $515,000 figure proposed for land acquisition appears reasonable.
The total cost of the proposed Careage project is $4,150,000. The cost of constructing the 45,500 gross square foot facility is $2,583,125 and equates to a construction cost per square foot of $56.77 and a construction cost per bed of $21,526. Careage proposes equipment costs of $420,000 or $3,500 per bed. Its operating cost per bed is $23,395. The overall project cost of
$4,150,000 equates to a cost of $34,583 per bed.
Careage proposes to obtain 100% financing of the total project cost at an interest rate of 10%, with the term of the loan being 30 years. Based upon Mr. Lynn's personal financial statement and Careage's past ability to obtain financing for other nursing home facilities, these expectations appear reasonable.
The architect retained by Careage to design the proposed facility in Lakeland received an award from the Contemporary Long Term Care magazine in 1986 for another nursing home designed and constructed in Bakersfield, California. The proposed Lakeland facility will contain 45,500 square feet, which translates into 379 gross square feet per bed. Its patient room arrangements include two isolation rooms, 7 private rooms, 45 semiprivate rooms and a 21-bed special Alzheimer unit with 10 semiprivate rooms and one private room. The facility will be a one-story building, with aquariums visible from the reception area and the dining room. The design includes a beauty and barber shop, a chapel, a gift shop, recreation areas, a private dining room area and outside courtyards. Each patient room will have a bathroom with a sink, as well as a sink in the outer room in semiprivate rooms. Also, in semiprivate rooms, the beds will be placed on opposite head walls to allow each resident to have a view of the window when the other pulls the curtain. Each room will have its own temperature control. The facility will also have occupational and physical therapy rooms. In order to afford more patient privacy, the service areas are located away from the ancillary spaces.
Careage's quality assurance program will include a utilization review committee, a safety committee, an infection control committee, a pharmaceutical committee, a resident advisory council, a community advisory council and employee advisory groups. A corporate representative visits all Careage nursing homes on an interim basis to review the day-to-day operations, facility maintenance and physical environment.
As noted, Careage proposes to offer a 10-bed subacute care unit. This unit will provide services for the care of technology dependent children, many of whom are recovering from automobile accidents, severe illness, neuromuscular disease or congenital disorders. The subacute unit will also offer such services as hyperalimintation, IV infusion, morphine drip, use of Hickman catheters and other services traditionally performed in the acute care hospital setting.
Alzheimer Disease is a fatal illness evidenced by a progressive deterioration of mental, motor, cognitive, physical, social and psychological processes. The problems suffered by Alzheimer patients include nutritional problems, communication problems, disorientation, loss of memory, problems with elimination and basic personal care, agitation, catastrophic reactions, wandering and problems with safety. The Careage approach in offering a separate and distinct Alzheimer unit is to provide behavioral and environmental care. When more skilled nursing care is required than behavioral or environmental care, the Alzheimer patient is then moved to another skilled bed. The separate Alzheimer unit will utilize a specially trained staff and a team approach to any required changes in treatment. The separate 21-bed unit will provide security
and will have its own dining room and recreation area. The decor will be designed to promote less agitation. Careage will provide a separate outdoor exercise courtyard for its Alzheimer patients along with various activity programs, such as short reminiscent programs and music therapy. Careage will also offer family and community education programs regarding the needs and care of Alzheimer patients, and encourages the use of volunteers to help adapt the Alzheimer residents to daily living as much as possible. The advantages of providing a separate and distinct Alzheimer unit include the safety features, the ability to utilize a trained staff and a team approach to patients who may have a wide variety of symptoms, less disruption to other residents in the nursing home, and the provision of a more appropriate decor and specialized programs for the Alzheimer patient.
Careage proposes to offer respite care services on a space-available basis. Adult day care services will also be offered in a separate entity adjoining the nursing home facility, but the cost associated with that is not a part of Careage's application for a Certificate of Need.
Careage proposes to staff the Lakeland facility with 96 full-time equivalent positions. These include 11.9 registered nurses, 7.4 licensed practical nurses and 42.1 certified nurses aides, which equates to a ratio of 1 registered nurse per 10.1 patients, 1 licensed practical nurse per 16.2 patients, and 1 aide per 2.9 patients. Careage intends to offer three hours of nursing care per patient day for the Alzheimer's and skilled areas, and at least six hours per patient day for the subacute and Medicare-certified residents.
The staffing proposed meets and exceeds the requirements of Florida regulations.
In recruiting staff for its new facilities, Careage advertises in advance of opening in newspapers and periodicals and contacts are made with nursing schools. It offers a liberal fringe benefit package, competitive salaries, in-service training, continuing education assistance and child day care services in adjoining portions of the nursing home. Careage also attempts to use the elderly both as volunteers and staff members. It intends to utilize its facility as a clinical site for schools of nursing, schools of dentistry and other programs within the medical community. Gene D. Lynn, the owner of Careage, has endowed a program in rural nursing at Seattle University.
In its first and second years of operation, Careage proposes a payor mix of 40% Medicaid, 4% Medicare, 6% subacute, 3% VA and 47% private pay. Its philosophy with regard to care for medically underserved groups is to serve all populations, regardless of age, sex, religion, national origin or payor status. The payor mix anticipated by Careage is consistent with that being experienced in other facilities in Polk County.
The patient charges proposed by Careage are based upon the experience of other providers within Polk County and Careage's own experience in its other facilities. Careage proposes a Medicaid per diem charge of $57.50, a Medicare all inclusive charge of $105.00, a private and VA per diem charge of $60.00 and a subacute charge of $125.00.
The assumptions contained in the Careage financial pro forma are based partly upon the experience of existing nursing homes in Polk County and the experience of Careage in other facilities, and appear reasonable. At the end of its first-year of operation, Careage projects a net loss of $161,994.20. A net income of $127,936.61 is projected for the end of the second year of operation.
The Careage proposal conforms with the goals and priorities of the District VI Health Plan's nursing home component as well as the goals and objectives of the Florida State Health Plan.
Overall occupancy rates in existing nursing homes in Polk County exceed 90 percent. More than half of the Polk County nursing homes currently have waiting lists for admission. In February of 1985, Winter Haven Hospital opened 100 beds that are classified as subacute beds and are reimbursed as skilled nursing beds. For calendar year 1987, the average occupancy rate of the Winter Haven Hospital subacute unit was 65 or 66%. As of the date of the hearing, the census was 78. Higher utilization throughout the Hospital is typically experienced in the first quarter of the calendar year. While the Administrator of Winter Haven Hospital did not feel there was a need for more subacute beds in Polk County, he also felt that the Careage proposal for 10 subacute beds would have a minimal effect upon Winter Haven Hospital.
According to a telephone survey, no nursing homes in Polk County currently accept ventilator dependent patients, pediatric or neonatal patients or technology dependent children. It is estimated that between 3 and 22 technology dependent children will need services in Polk County in 1989. Only five nursing homes in Polk County accept patients on IV therapy. Only one nursing home facility in Polk County has a separate and distinct unit for Alzheimer residents. It is estimated that 1,660 persons with Alzheimer Disease will require nursing home services by the year 1989.
When conducting its initial review of the competing applications for nursing home beds in Polk County, as well as other counties, HRS staff attempted to compare the applicants by utilizing a "matrix" which compiled the data and information presented in the respective applications. The information initially displayed revealed numerous errors and omissions. The matrix was then revised and information was again compiled to make it an accurate tool for comparative purposes. With few exceptions, all of the data elements in the matrix are items included in the application forms. After balancing the various items, such as facility size, proposed programs, project and construction costs, per diem charges, payor mix, and levels of staffing, HRS initially determined that Careage was the superior applicant. At the final hearing, additional errors were discovered in the display of information contained in the matrix. The errors were corrected and did not change the opinion of HRS's health planning expert that Careage was the superior applicant.
CONCLUSIONS OF LAW
In reviewing an application for a Certificate of Need, a balanced consideration must be afforded the statutory criteria for review set forth in Section 381.494(6)(c), Florida Statutes (1985), now Section 381.705 Florida Statutes (1987). If a limited need for additional beds or services is demonstrated, and several applicants meet the statutory and regulatory criteria for approval, a determination must then be made as to which applicant has the superior proposal.
Here, the parties have stipulated and the evidence demonstrates that there is a need for 128 additional nursing home beds in Polk County for the July 1989 planning horizon. The evidence further establishes that both the Surrey and Careage proposals substantially comply with the statutory criteria for review. Since neither applicant has offered to scale down their proposals so that both, combined, would not exceed the total numeric need for 128 beds, a determination of which applicant has the superior proposal must be made.
Both applicants have certain similarities and certain strengths and weaknesses with regard to the statutory and regulatory review criteria. Surrey's proposal will be built in conjunction with a personal care unit, thus fostering the goals of providing a continuum of care and the sharing of some
common services. Having a previous track record in Florida, HCA can demonstrate that it meets the priorities contained in the District VI Health Plan relating to a documented history of timely implementing its existing Certificates of Need and achieving and maintaining superior ratings at its existing nursing home facilities. Surrey has demonstrated that it has an established history of providing quality care. Careage has no prior history of constructing or operating nursing homes in Florida, and has only a short period of experience in operating nursing homes in other states. While Surrey has a slightly higher Medicare/Medicaid commitment, as well as a history of providing services to such patients, both applicants have committed to provide a substantial amount of care to the area's medically indigent. The amount committed by each applicant is well in excess of the elderly poverty rate in Polk County.
The total project cost for the Surrey proposal is approximately $1.1 million less than that of the Careage proposal. While the two proposed facilities are approximately the same size (the Careage facility being 1500 square feet larger), the Surrey proposal has lower construction costs per bed, lower equipment costs per bed and lower operating costs per bed. However, Surrey was unable to describe, in detail, the layout and type of facility it proposes to construct. It admitted that the schematic diagram contained in its application was outmoded and is no longer utilized by HCA. Its current floor plan was not admitted into evidence because it was not previously exchanged in accordance with the pretrial order entered in this proceeding. Thus, it is not possible to determine whether the Surrey facility is in compliance with applicable rules or whether Surrey's costs and methods of construction are reasonable. It is also impossible to compare the Surrey facility with the Careage facility, whose costs and methods of construction were shown to be reasonable.
The proposed per diem patient charges of both Surrey and Careage are reasonable and, with the exception of the subacute charges proposed by Careage, the proposed charges of each applicant are fairly comparable. The subacute charges proposed by Careage are reasonable based upon what this type of care costs in acute care hospitals. It is important to note that even though Careage has higher operating costs, higher construction costs and higher equipment costs, its proposed per diem rates are comparable with those proposed by Surrey.
While the pro formas submitted by Surrey show a larger net loss after the first year of operation than that projected by Careage, the net profit at the end of the second year of operation projected by both applicants is comparable. Both applicants have adequately demonstrated that their proposals are financially feasible on both a short term and a long term basis. Both applicants have demonstrated their ability to finance their proposed projects and to recruit and hire sufficient personnel to operate the facilities as proposed. Both facilities will offer institutional training programs and community training programs for health care practitioners. The overall utilization forecasts and projected payor mixes anticipated by both applicants are reasonable.
The proposals of Surrey and Careage differ in two important respects-- programs and staffing. The Careage proposal includes a broader than usual scope of services which will enhance and improve the availability and quality of
nursing home services in Polk County. The evidence demonstrates that it is advantageous from both a nursing and a patient standpoint to have Alzheimer patients cared for in a separate unit rather than have them mixed in with the general population. Careage proposes a separate and distinct 21-bed unit for its Alzheimer patients. Only one other nursing home in Polk County has a distinct Alzheimer unit. Given the potential number of 1600 Alzheimer patients in Polk County in need of nursing home services in 1989, the Careage proposal will provide needed services and enhance the quality of care in the area.
Likewise, the provision of specialized care units for subacute patients and technology dependent children will improve the availability, accessibility and quality of nursing home services in Polk County. There are no current nursing home services in the County for ventilator dependent patients, pediatric or neonatal patients, or technology dependent children. Only a limited number of nursing homes in Polk County accept patients on IV therapy. Thus, there does appear to be a need for the more specialized services for the subacute patient which Careage proposes to offer. While the Winter Haven Hospital does have a 100-bed subacute unit which is not currently fully utilized, a nursing home setting is less restrictive and the hospital would suffer no adverse impact from the Careage subacute unit. Careage also proposes to offer respite care services and adult day care services, the latter being in a separate building. Careage's commitment to provide these specialized and needed services is reflected in both its building design and its proposed staffing of the facility.
Careage proposes to staff its facility with some 23 more full-time equivalent persons than does Surrey. It proposes twice as many registered nurse positions as does Surrey, two more licensed practical nurses and eight more nurses' aides. This higher level of staffing, as well as higher equipment and operational costs per bed, is demonstrative of Careage's intent to provide a high quality of care to its patients. While its operating costs and expenditures on patient care are high, Careage's per diem charges are reasonable and conform with existing charges in the area.
Much time during the hearing and in legal argument subsequent to the hearing was devoted to the issue of what changes in the initial application would be appropriate for consideration at the hearing. Distinctions were argued between permissible "updates" of an application resulting from changes in extrinsic circumstances and impermissible amendments which are at variance with the information contained in the original application or responses to requests for omissions. HRS and Careage contend that only the application reviewed by HRS may be considered, along with a change in circumstances external to the application and the correction of obvious errors within the application. Surrey contends that the hearing is a de novo proceeding conducted to formulate final agency action, not to review prior action or actions taken preliminarily.
The undersigned declines and finds it unnecessary in this Recommended Order to adopt in blanket fashion either of the parties' positions with regard to the admissibility of updated or changed information at the hearing stage. Each update or change must be reviewed independently to determine its relevancy and its permissibility. Obviously, an applicant may not at the hearing attempt to change its planning horizon, increase or change the entire scope of its proposal or change its proposed service area from that for which it applied. However, some changes, even intrinsic changes, become necessary due to the length of time which often elapses between the date of application and the date of final hearing. Questions of due process and prejudice to the other parties will often be controlling in ruling upon the admissibility of changed
information (as was the case with Surrey's undisclosed new architectural plan). Often, updated or changed information is relevant to the issue of the credibility of the applicant.
During the instant proceeding, the only real changes offered into evidence by either party were the correction of obvious errors within the application, the addition of programs not listed in the application by both Surrey and Careage and the new architectural plans of Surrey. The latter were not admitted, as noted above. Surrey's attempt to include within its project scope adult day care and respite care services should not be considered because such services are irrelevant and immaterial to the nursing home project. Surrey admits that such services will not be provided within the nursing home facility, but will instead be provided within the personal care unit. As such, those programs are not a part of the project proposed for a Certificate of Need. The Careage and Surrey child care proposals to be located in facilities separate from the nursing home are likewise immaterial, except to the extent that they bear upon the applicant's ability and desire to better attract and recruit staff. Surrey did not purport to change its application to include specialized services for Alzheimer patients. It simply offered testimony that Alzheimer patients would be served at the facility.
Somewhat contradictory to its position that this is a de novo proceeding designed to formulate rather than review prior agency action, Surrey contests the use by HRS of the matrix in reaching it preliminary decision. Surrey argues that the matrix, in addition to being filled with errors, emphasized programmatic areas of the application which are intangible and not subject to regulation by HRS. It is further urged that HRS did not provide sufficient notice to applicants in this July 1986 batching cycle about the review evaluation factors. The evidence demonstrates that the matrix utilized by HRS was simply an organizational tool to compile the data and information presented in the various applications and to assemble that information in a manner which would lead to a better comparative review. The matrix simply includes most of the major data elements from the application which all applicants must submit. Surrey can hardly claim any prejudice or surprise by the use of such a comparative review tool. In addition, the issue in this proceeding is not whether HRS made a correct initial determination for the correct reasons. The issue is whether either Surrey and/or Careage is entitled to a Certificate of Need for their respective projects in Polk County.
In conclusion, the evidence demonstrates that there is a numerical net need for nursing home beds in Polk County of 128. While both Surrey and Careage substantially comply with the applicable statutory and rule criteria, the Careage proposal is superior to that of Surrey. Careage's proposal to staff and equip a separate 21-bed Alzheimer unit and to establish specialized care units for subacute patients and technology dependent children will provide needed services in a quality manner. The Careage proposal will enhance and improve the availability, accessibility and quality of nursing home services to underserved groups of patients, as well as to Medicaid patients. Its application is superior to that of Surrey because it proposes considerably higher levels of nursing staff and special needed programs, and complements the provision of such services with reasonable patient charges.
Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the application of Surrey to establish a 120-bed nursing home in Polk County be DENIED, and that the application of Careage be GRANTED,
conditioned upon the inclusion of a 21-bed separate Alzheimer unit, a 10-bed subacute care unit and the provision of at least 40 percent of patient days to Medicaid patients.
Respectfully submitted and entered this 6th day of June, 1988, in Tallahassee, Florida.
DIANE D. TREMOR
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 6th day of June 1988.
APPENDIX
(Case NO. 87-0680)
The parties' proposed findings of fact have been fully considered and are accepted and/or incorporated in this Recommended Order, with the following exceptions:
SURREY
9. Last two sentences rejected. The first is irrelevant and immaterial to the project under review. The last is refuted by the greater weight of the evidence.
17-19. Rejected as contrary to the evidence.
23. Rejected as contrary to the evidence.
28. Rejected as argumentative and not a proper factual finding.
29,30. Rejected as not being supported by competent, substantial evidence.
Rejected as contrary to the evidence.
Last sentence rejected as unsupported by competent, substantial evidence.
57. Rejected as contrary to the greater weight of the evidence.
First sentence rejected as hearsay and conclusiory.
Rejected as to "methods of construction," as not supported by competent, substantial evidence.
CAREAGE
2. Factually accepted, but not included as irrelevant.
15. Accepted with reservation. It is unclear from the evidence as to whether adult day care is a part of the nursing home project.
Partially rejected insofar as it is argumentative and a mere recitation of testimony.
Last sentence rejected as unsupported by the evidence.
HRS
11. Rejected. Since Surrey does not intend to use the plans submitted in
the application; the net living space cannot be determined.
Accepted only if the words "on paper" are added to the end of the sentence.
First sentence accepted if "on paper" added.
24. Accepted but not included, as there was no way to make a similar comparison with the Surrey facility.
41. Rejected as legal argument as opposed to factual finding.
42,43. Rejected as irrelevant and immaterial to the issues in dispute.
COPIES FURNISHED:
Reynold Meyer
F. Phillip Blank, P.A. 204-B South Monroe Street Tallahassee, Florida 32301
Edgar Lee Elzie, Jr. MacFarlane, Ferguson,
Allison & Kelly Post Office Box 82
Tallahassee, Florida 32302
Robert S. Cohen
Haben & Culpepper, P.A. Post Office Box 10095 Tallahassee, Florida 32302
Gregory L. Coler, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
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AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
HEALTH CARE ASSOCIATES, INC., d/b/a SURREY PLACE OF POLK COUNTY,
Petitioner, CASE NO. 87-0680
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and GENE E. LYNN, d/b/a CAREAGE CENTRAL HEALTHCARE CENTER,
Respondents.
/
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 deference 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 for the Hearing Officer's conclusions regarding amendment of CON applications during Section 120.57 proceedings. See Hialeah Hospital, Inc. vs. HRS, 9 FALR 2363 for the department's position regarding such amendments.
Based on a balanced consideration of all applicable criteria it is
ADJUDGED, that Careage's application for certificate
of need number 4725 be approved. It is further adjudged that Health Care Associates, Inc.`s application for certificate of need number 4723 be DENIED.
DONE and ORDERED this 25th day of August, 1988, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
by Assistant Secretary for Programs
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
Diane D. Tremor Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
F. Philip Blank, Esquire Reynold Meyer, Esquire 204-B South Monroe Street
Tallahassee, Florida 32301
Robert S. Cohen Esquire HABEN & CULPEPPER, P. A.
Post Office Box 10095 Tallahassee, Florida 32302
Lee Elzie, Esquire Guyte McCord, Esquire
MACFARLANE, FERGUSON, ALLISON & KELLY
215 South Monroe Street Tallahassee, Florida 32302
Information Copies:
Theodore Mack, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
Juanita Powell (PDDR)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 31st day of August,
1988.
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
| Issue Date | Proceedings |
|---|---|
| Jun. 08, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 25, 1988 | Agency Final Order | |
| Jun. 08, 1988 | Recommended Order | Careage application for nursing home granted over Surrey's because it proposes considerably higher levels of nursing staff and special need programs. |
