STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEALTH CARE ASSOCIATES, INC., ) d/b/a SURREY PLACE OF COLLIER ) COUNTY, )

)

Petitioner, )

)

vs. ) CASE NO. 87-0691

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

and )

) NAPLES MEDICAL INVESTORS, LTD., ) d/b/a LAKESIDE PLANTATION, )

)

Intervenor. )

)

RECOMMENDED ORDER

Consistent with the Notice of Hearing furnished to the parties in this case by Hearing Officer Linda M. Rigot on April 21, 1987, a hearing was held herein before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings in Tallahassee, Florida on October 6 - 9, 1987. The issue for consideration was whether there is a need for a 60 bed nursing home facility in Collier County, Florida, and if so, whether Petitioner, Health Care Associates, Inc., d/b/a Surrey Place of Collier County should be awarded the Certificate of Need to operate it.

APPEARANCES

Petitioner: Philip F. Blank, Esquire

Reynold Meyer, Esquire 204-B South Monroe Street

Tallahassee, Florida 32301

Respondent: Richard A. Patterson, Esquire

Asst. General Counsel 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700

Intervenor W. David Watkins, Esquire

Oertel & Hoffman, P.A.

2700 Blair Stone Road, Suite C Post Office Box 6507 Tallahassee, Florida 32314-6507

BACKGROUND INFORMATION

In December, 1986, Respondent Department of Health and Rehabilitative Services, (DHRS), denied the application filed by Petitioner herein, Health Care Associates, Inc., d/b/a Surrey Place of Collier County, (Surrey), for a Certificate of Need to construct and operate a 60 bed nursing home facility in Collier County, Florida. On January 22, 1987, Surrey filed a Petition for Formal Administrative Hearing and the matter was referred to the Division of Administrative Hearings for the appointment of a Hearing Officer. Naples Medical Investors, Ltd., d/b/a Lakeside Plantation, (Lakeside), thereafter filed a Petition for Intervention and on April 1, 1987, Hearing Officer Rigot entered an Order granting intervention.

Subsequent to that action, DHRS changed its position and agreed to support Surrey's application but since the matter had been referred to administrative hearing and an intervention had been allowed to contest any granting of the Certificate to Surrey, the hearing was held as scheduled by the undersigned to whom the case had been referred in the interim.

At the hearing, Petitioner presented the testimony of Dr. John A. McCoy, President and owner of Health Care Associates, Inc., proposed developer herein; Maryann Judkins, former nursing home surveyor for DHRS; Dennis E. O'Keefe, an expert in the area of nursing home design and construction and an architect; Robert B. Phillips, an expert in health care financing; and Thomas J. Konrad, an expert in the areas of health planning and Certificate of Need review.

Petitioners also introduced Petitioner's Exhibits 1 through 9 and 11.

Respondent, DHRS, presented the testimony of Robert W. May, a health services and facilities consultant and an expert in health planning and Certificate of Need review and introduced Respondent's Exhibits 1 through 3.

Intervenor presented the testimony of Deborah P. Kennedy, an expert in health care planning and nursing home development; Joseph Lennartz, Comptroller of Convalescent Services, Inc., and an expert in nursing home financial feasibility analysis; Rick A. Winkler, Regional Director for CSI and an expert in nursing home administration and operations; Michael D. Jernigan, Director of Planning at Naples Community Hospital and an expert in health care planning; and John D. Lee, III, Senior Director of Operations for Intervenor, Manor Health Care Corporation and an expert in nursing home operations. Intervenor also introduced its Exhibits 1 through 3 and 5 through 8.

Subsequent to the hearing, Petitioner and Respondent joined in presenting Proposed Findings of Fact and Intervenor submitted Proposed Findings of Fact all of which have been considered and ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. By Stipulation it was agreed and it is found that Petitioner's Petition for Administrative Hearing to contest Respondent's initial decision to deny its application was timely filed.

   
   

2. On July 15, 1986, Petitioner submitted a Certificate of Need application to construct a 60 bed community nursing home in Collier County, Florida. In December, 1986, this application was denied by the Respondent because of its determination that there was insufficient numeric need according to the rule bed need methodology and because of the low utilization rate of

   existing facilities in Collier County. The initial intent to deny was appealed by Petitioner which filed a request for formal administrative hearing.

   
   

3. Before the matter could be heard, however, Intervenor, Lakeside, filed a Petition for Intervention which was granted by the former Hearing Officer.

   
   

4. After the case was set for hearing, Respondent, DHRS, and Petitioner, Surrey, entered into a stipulation and agreement in which DHRS agreed to reverse its position and support Surrey's application at the final hearing and, pursuant to that agreement, on May 14, 1987, DHRS filed a Notice of Change of Agency Position.

   
   

5. Health Care Associates was formed in May, 1977, by Dr. John A. McCoy, PhD, in conjunction with an associate, Stanford L. Hoye, each of whom owns 50 percent of the business. This company which, upon approval, will develop and manage the Surrey project, has been involved in the development of several nursing homes in Florida, all but two of which have been managed by the corporation upon development. At the present time, in addition to the instant project, Petitioner is developing three other nursing home projects in Florida at Live Oak, Bradenton, and Crystal River.

   
   

6. Dr. McCoy was instrumental in obtaining Certificates of Need for nine of the nursing homes developed by his company. Two of those have not yet been licensed and of the seven remaining facilities, five have been sold by the corporation to other unrelated organizations. In each case, Dr. McCoy personally realized a profit on the sale.

   
   

7. Petitioner proposes to build a 60 bed skilled nursing facility in Collier County at a projected project cost of $1,600,000.00. Approximately

   $250,000.00 of that figure will be utilized for land acquisition and site costs;

   $150,000.00 for furniture, fixtures, and equipment; $100,000.00 for architectural fees; and $1,100,000.00 for construction costs, insurance, non- movable equipment, and other items. The initial state agency action report on the application, rendered in late November, 1986, recommended the project be denied on the basis there was insufficient bed need shown and because of the low utilization of currently licensed and operating facilities. Nonetheless, on May 6, 1987, the Department changed its position and entered into a stipulation and agreement with the Petitioner, in which it agreed that no CON approved nursing home beds exist in Collier County; the District Health Plan indicates a need for an additional 143 beds in that county in the applicable planning horizon; the bed to population ratio in Collier County for the 65 and older population is the lowest in the Health Care District; and the age 75 and over population is expected to increase by 24 percent within the next three years. On the basis of these factors and others outlined in the stipulation, the Department concluded, inter alia, that Petitioner proposed the lowest total project cost and the highest Medicare and Medicaid commitment, and determined that Petitioner's application should be approved.

   
   

8. Petitioner has identified two potential sites for construction of the facility, both located in North Naples. Both sites carry an asking price substantially in excess of the land acquisition estimates outlined in the application, and neither is currently zoned for the operation of a nursing home. Zoning changes or variances are available, but the cost of securing them may be high and time consuming. Albeit each site would be utilized for construction of not only the proposed nursing home facility but also its related personal care unit, Petitioner estimates that 60 percent of the cost of land acquisition would be apportioned to the nursing home component and 40 percent to the personal care

   unit. That being the case, one of the parcels would fall within the proposed land acquisition figure cited.

   
   

9. DHRS District VIII has been divided into subdistricts for the purposes of planning for community nursing home beds. Subdistrict 2 of District VIII consists of Collier County, Florida.

   
   

10. The methodology used by DHRS to determine the need for community nursing home beds in Florida is found in Rule-10-5.011, F.A.C. and it provides, among other things, that the need for proposed new community nursing home beds is to be determined based on a planning horizon three years in the future from date of application. In this case, the appropriate planning horizon is July, 1989, three years after Petitioner's application was filed.

    
    

11. The population figures relied upon by DHRS for ages 65 through 74 and ages 75 and above for the period July, 1986 and July, 1989 as of the date of the filing of the application were: 131,642 and 79,661 as well as 148, 229 and 96,142, respectively.

    
    

12. The need formula contained in the F.A.C. also requires that the application submitted for July batching cycles be based upon the number of licensed beds in the District as of the preceding June 1. On June 1, 1986, District VIII showed 4,600 licensed community nursing home beds of which there were 473 licensed community nursing home beds in Subdistrict 2. As of November 26, 1986, however, there were no approved community nursing home beds in Collier County, a portion of Subdistrict 2.

    
    

13. Another factor to be considered in the methodology is the occupancy rate within the district. As of the application period, the occupancy rate in Collier County was 84.44 percent including the occupancy data for Moorings Park.

    
    

14. Petitioner and DHRS urge that it is DHRS policy to utilize at the de novo hearing the latest population figures available at the time of the initial application. These figures, cited above, reflect a 55 bed need in Collier county for the period July, 1989. There is, in addition, a factor which Petitioner urges relating to the licensure report submitted by Americana Nursing Home, located in Collier County, which indicates that a number of that facility's semiprivate rooms were converted to private rooms, thereby reducing the number of beds available for use in District VIII during the relevant time period. When this factor is incorporated into the calculations, a higher occupancy rate is indicated which results in a bed need of 66 rather than 55.

    
    

15. Intervenor contests any adjustment made on the basis of Americana's conversion of some of its rooms from semiprivate to private rooms and a resultant decrease in the bed inventory thereby. It points out, and properly so, that former semiprivate rooms can be reconstituted as such in a very short period of time if needed and though the beds may not be set up when the room is a single room, the facility is capable of providing those additional beds without further approval when necessary. The removal of those beds, therefore, from the inventory, as a result of a temporary conversion is not an appropriate methodology. It has not been followed by DHRS in the past nor is it provided for in the rule and it should not be done here.

    
    

16. Turning to the question of the population estimates and projections appropriate to make the proper calculation of numeric need for the area at the proper time, Intervenor objects to Petitioner's and DHRS' use of the pertinent population projections existing at the time of application on the basis that at

    a de novo hearing, the proper and most appropriate approach to bed need analysis and calculation would require the use of the most current available statistics.

    
    

17. Utilizing the most current population projections for the July, 1989 planning horizon results in a net numeric need for July, 1989 of 21 beds with an error possible to 22 beds. In addition, the occupancy rate would be reduced and in that regard, evidence indicates that occupancy rates in Collier County have been low since 1982. However, there has been a steady and continuous rise in that figure since that time and as of July, 1987, it was 91.1 percent.

    
    

18. The date upon which licensed beds are to be counted is provided for specifically in the rule defining need methodology, but the date upon which approved beds are to be counted is not stated in the rule. Similarly, the times for which population data are to be considered is contained in the rule methodology, but the release date of official estimates and projections to be utilized is not specified. Likewise, though the time period for which occupancy rates of existing facilities are to be considered is specifically set out, the input to be utilized when calculating "average occupancy rate" within that time period is not specifically established. In any case, the average occupancy rate as stipulated in the rule methodology for the area has been, until recently, consistently lower than 90 percent which is the figure identified in the rule methodology. Based on all the above, then, it must be found that the more accurate and pragmatic calculation of need utilizing the most current projections and discounting the agency policy for which the agency has not established any firm rationale or justifiable basis, indicates no numeric need for additional beds in the District during the period set forth in the planning horizon.

    
    

19. Even if use of the rule methodology does not result in a mathematical showing of bed need sufficient to justify award of a certificate of need, nonetheless such a certificate can be awarded if other conditions and other circumstances establish a need that requires satisfaction within the area and the planning horizon.

    
    

20. There was some dispute regarding poverty rates within Collier County and evidence presented at the hearing tends to indicate that the poverty rate in Collier County for the 65 and older population group is generally the lowest in the state. Low poverty rates among the elderly generally coincide with low nursing home utilization since wealthier patients generally have available to them alternatives to inpatient nursing home care. Intervenor urges, and there is no evidence to contradict it, that there are currently available alternatives to nursing home care for wealthy patients not only in Collier County but within District VIII as a whole.

    
    

21. The Health Services and Facilities consultant for DHRS who initially reviewed Petitioner's application felt approval was not appropriate at the time he did his analysis. However, since that time additional information has caused him to conclude the application should be granted. He has subsequently learned that two of the four nursing homes in Collier County, which account for more than 50 percent of the beds licensed, have "conditional" quality ratings and there are currently no beds approved for construction in the county even though the county is one of the fastest growing counties in Florida. On the basis of this information, he now agrees with the agency's determination to approve a certificate of need for 60 beds for Petitioner. Based on what Mr. May knows of the three applicants, in his opinion Petitioner is the most appropriate applicant to receive the award.

22. In the Stipulation entered into between Petitioner and the agency, the parties adopted the District VIII Health Council projection of 143 beds needed for Collier County for the 1986 planning horizon. The quarterly nursing home report for the period April through June, 1987, reflects the status of previously issued certificate of needs and includes all reported approved beds up to the date of issuance. This report shows that as of June 30, 1987, two applicants from prior batches received a total of 81 beds which, when subtracted from the 143 identified bed need, still leaves a 62 bed net need.

    
    

23. Turning from the question of numeric need to other considerations regarding the applicant in issue, there can be little doubt that the estimates for the design of the proposed facility and construction are appropriate. The figures in Tables 18 and 19 of the application are also appropriate and reasonable. The costs for the project appear to be accurate and appropriate and the completion forecast timetable appears to be more than ample.

    
    

24. Mr. Philips, the Vice President in charge of construction lending for the mortgage company which proposes to finance construction of the facility, is familiar with not only the applicant's corporate financial statement, but also those of the two principals, Dr. McCoy and Mr. Hoye. In his opinion, both are capable of providing the initial financing and their operations statements show a history of successful business operation. The 11 percent proposed as an interest rate for the loan supporting the construction is reasonable if not liberal, and the 25 year duration of the loan is also reasonable as is the loan origination fee of two points. If the certificate of need is approved, the lender is ready, willing, and able to lend the applicant sufficient funds to complete construction.

    
    

25. Intervenor's expert in nursing home budgeting and financial feasibility analysis, testifying in contravention of Petitioner's experts, believes that approval of Petitioner's operation would have a severe financial impact on the Intervenor's operation as a current provider resulting in a first year bottom line loss of approximately $235,000 and a second year bottom line loss of almost $300,000. It should be noted here, however, that these are not actual operating losses but a projected reduction in profit. These estimates are based on August, 1987 figures adjusted forward for inflation. In short, while the opening of Petitioner's facility may have a negative impact on existing facilities, it would not necessarily result in a deficit operation for any existing provider.

    
    

26. This expert also has some difficulty with Petitioner's projections of financial feasibility in its own facility. For example, he questions the 15 percent census of Medicare patients based on the fact that currently Intervenor does not have any Medicare patients though it does accept them. He also considers the estimate of a 96 percent occupancy by the end of six months to be unreasonable, especially in Collier County. He believes Petitioner's proposed expenses are understated and there are inconsistencies between the staffing table and labor costs in that the nursing expense is understated and the hourly rates projected to be paid are much too low. He believes that the projected cash flow is overstated since there is no provision for a reduction of principal.

    
    

27. There are, also, other possible negative aspects to approval of Petitioner's application. Intervenor's regional director, who is an expert in nursing home administration, believes that approval of Petitioner's application will have a direct adverse reaction on Intervenor's Lakeside operation in regard to services provided, staffing, and its own financial feasibility. With regard

    to staffing, there is currently a critical shortage of nurses in Collier County and this factor was confirmed by a representative of another facility in the area. Approval of Petitioner's facility might well worsen the problem.

    
    

28. Other service personnel are also in short supply and approval of Petitioner's application will worsen this as well. If these personnel shortages materialize, it may result in a reduction of quality of care, but this is speculative and there is no direct evidence that this would happen. Lakeside's current license is rated as "standard" as opposed to "superior" and this is claimed to be directly related to the nursing shortage which resulted in the facility's inability to attract sufficient nursing personnel to merit a "superior" rating. The witness identified other apparent deficiencies in applicant's submission, but these are either of a minor nature or the subject of opinion or conjecture. In short, the only substantive objection sustainable is the prospective adverse effect on the cost of attracting qualified nursing personnel.

    
    

29. Certain other projections by the applicant are considered to be unreasonable by Americana's Director of Operations, such as the 15 percent projection for Medicare patients. Currently Americana, which generally has between 13 and 23 beds open at any time, has 2 Medicare patients and this witness also feels that a 96 per cent fill up rate in 6 months is unreasonable. Based on his experience, Collier County had even a slower than normal fill up rate when compared to other areas of the state.

    
    

30. Notwithstanding the negative testimony, there can be little question, and it is so found, that Petitioner would be able to provide quality care if its application were approved.

    
    

31. Turning to the question of the relationship of this application to State and Local health plans, the bed need calculation has already been discussed above. That calculation is based on the state methodology. However, the state methodology may be substantially different than a need developed by reference to the local health plan. The local plan looks at need from the county/subdistrict basis whereas the state looks at the district as a whole for establishment of need and then distributes beds on the basis of current bed census. When the smaller counties with fewer existing beds grow faster than the larger counties with a greater number of existing beds, they tend to be caught in a squeeze in that they get fewer beds because they are smaller, while their actual need may be greater than that of the larger county which, by virtue of its size, gets the larger number of beds. This state need rule, which calls for a 90 percent occupancy rate is felt by some to be less valid and less accurate a basis for evaluating the need in reality.

    
    

32. As to the question of alternatives, there appear to be none for the vast majority of people in the county. Hospices or internal acute care bed or ambulatory facilities are not truly alternatives to nursing homes.

    
    

33. In summary, Petitioner's expert believes that the Department's projected need for 43 beds could justifiably result in an approval of an application for 60 beds because:

    
    

    1. There were no approved beds at review time,

    2. Population trends, growth, and utilization trends indicate a need for new beds,

    3. The bed to population ratio in the county is one of the lowest in the district and in the state, (16 or 17/1,000 vs 27/1,000 normal for 65 plus) and the situation has not changed,

    4. Although the 65 plus population is used to determine need, the greatest use of nursing home facilities comes from the

       75 plus population which is expected to increase in Collier County by July, 1989 by 32 percent, double the statewide average,

    5. At the time of application review, no existing facility was rated "superior" (there are now), showing a need for

       options. The applicant has a record of "superior" ratings statewide,

    6. The district health plan shows a bed need exceeding 60 beds for Collier

       County,

    7. The granting of a 60 bed nursing home is not inconsistent with previous actions

       by the Department when a mathematical need less a bed showed than 60 number. The project also is consistent with the rule criteria as well as statutory criteria, and

    8. Given DHRS's methodology and considering the adjustments due to Americana's change, there can be shown a mathematical need greater than the 43 shown by DHRS. Whether the need is 43 or

       66 is really not important. The need is there.

       
       

34. There is much to be said for these conclusions and they are adopted as findings herein.

    
    

    CONCLUSIONS OF LAW

    
    

35. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this case. Section 120.57(1), Florida Statutes

    
    

36. The Department of Health and Rehabilitative Services has the authority to evaluate and issue or deny certificates of need in accordance with the state and district health plans and state and federal statutes, specifically Section 381.494, Florida Statutes. The agency has promulgated a rule which provides a numeric methodology for calculating the need for additional nursing home beds within a particular service area. Rule 10-5.011(1)(k) F.A.C. This rule requires that the projection of population considered in evaluating need shall be based upon figures projected three years into the future from the date of application and shall be based upon the official estimates and projections adopted by the Office of the Governor. The rule is silent as to which edition of these figures shall be used. DHRS has taken the position in this and other

    similar proceedings that the appropriate population figures for utilization are those which were released immediately prior to the application date.

    Intervenors contend that the appropriate date is that most recently published prior to the date of the final hearing.

    
    

37. There is substantial authority for the proposition that the agency should use at the final hearing figures available at the time of the initial free form review. Manor Care of Hillsborough County v. DHRS, 9 F.A.L.R. 1102 (February 5, 1987), and Florida Health Facilities Corp., v. DHRS, 9, F.A.L.R. 2093 (April 17, 1987) and an agency's interpretation of its own rules is entitled to great weight. However, there is equally impressive case law to indicate that an agency's interpretation must be founded on logic and reason which is supported by a record foundation. In other words, the agency must justify on the record its use of a policy not otherwise provided for by a rule or statute. McDonald v. Dept. of Banking and Finance, 346 So.2d 567 (Fla 1DCA 1977); City of Delray Beach v. Department of Transportation, 456 So.2d 944 (Fla 1DCA 1984); Florida Medical Center v. H.R.S.,463 So.2d 380 (Fla 1DCA 1985).

    
    

38. Much can be said in support of both positions. For example, the use of a fixed date as of the date of application may well tend to discourage health care providers from filing multiple applications in the hope that new population estimates will eventually support a finding of need. On the other hand, it well may be said that a policy of utilizing the most current figures is more appropriate since it gives a truer and more accurate picture of the situation because it is closer related in time to the period in issue. Whatever theory one subscribes to, the fact is that the rule is silent on what edition of the figures should be used and this void in the rule has been the subject of an agency attempt to fill it by the utilization of a "policy" which it has thereafter continually failed to justify or explicate. Consequently, since the agency has failed to substantiate and support properly its rationale for such a policy choice, it would be improper to expand upon the terms of a rule at the final hearing by restricting the use of population figures to those extant at the time of application.

    
    

39. To the contrary, there are numerous reasons justifying the use of the most recent release of population data when determining the need for nursing home beds. It contains the most accurate and reliable evidence of population trends and since the purpose of certificate of need evaluation and review is to insure there is, in fact, a need for the facility within the community, the most recent and reliable information is mandatory. As was stated recently by Hearing Officer Tremor in Meridian, Inc., Meridian Nursing Centers, Inc., and Pinellas Meridian Limited Partnership v. DHRS, DOAH Case No 86-0060, dated November 16, 1987:

    
    

    The purpose of this de novo proceeding is to gather the most accurate and reliable evidence available and make findings of fact to determine the action which should be taken by HRS.

    
    

40. Further, the rule requires that "official" estimates and projections be utilized and the most current figures must logically be the only "official" estimate. Consequently, it must be concluded that the most recent figures are those appropriate for use and in light of those most recent figures, according to the best evidence of record, the bed need at most, utilizing the state's methodology, can be found to be well less than 60. Whether it be 21, 22, 43, or 55, the figures arrived at by various experts who testified for the parties, the

    best that one can come up with is that 60, the amount applied for by Petitioner, is not supported by the purely mathematical calculations provided for in the state bed need methodology.

    
    

41. However, it was clearly established that even if the methodology does not show a mathematical need, there is authority for the agency to grant the application if other circumstances show a real and established need.

    
    

42. Here, the evidence tends to show without question that within Collier County, the subdistrict in question in this case, there is a need for additional nursing home beds. A more efficient, less costly, or more appropriate alternative does not exist as provided for in both Section 381.494(6)(c)4 and (6)(d)1.

    
    

43. The most recent occupancy rate in Collier County reflects a rate in excess of 91 percent, when the health plan and rule call for an average occupancy rate of at least 90 percent. If one is to realistically utilize the most recent figures for establishing bed mathematical need, then one, logically, should utilize the most recent figures in determining need based on other factors. Albeit until recently the average occupancy rate in Collier County was below 90 percent, the evidence shows a steadily increasing trend from 1983 to the present which has culminated in a rate in excess of that used as a criteria in the rule.

    
    

44. Further, Petitioner has shown that its proposal is consistent with both the state health plan and the district plan, (381.494(6)(c)1, Florida Statutes). Existing facilities are not available or accessible to all residents of the community and based on the ratings of the current providers, there appears to be a need for improvement in the quality of care in the subdistrict, (381.494(6)(c)2). There can be little doubt that Petitioner can and will provide that quality of care, (381.494(6)(c)3).

    
    

45. As was stated previously, alternative services are not fully available nor are they totally adequate. (381.494(6)(c)4). Petitioner has the resources needed to carry out its proposal and evidence indicates that its facility will be accessible to all residents within the county, (381.494(6)(c)8).

Petitioner's proposed facility is financially feasible in both the immediate and long term future. (381.494(6)(c)9). Though there well may be a negative impact on the profit margin of existing providers, it is doubtful that approval and implementation of Petitioner's proposal would have a negative impact on the cost of providing service within the subdistrict. (381.494(6)(c)12). Further, it is clear that Petitioner's facility will be appropriate for the purpose intended and that its costs and methods of construction are reasonable. (381.494(6)(c)13 and (d)).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

RECOMMENDED that a Final Order be entered by the Respondent, Department of Health and Rehabilitative Services, approving Petitioner, Health Care Associates, Inc., d/b/a Surrey Place of Collier County' application for a certificate of Need to establish and operated a 60 bed skilled nursing facility in Collier County, Florida.

RECOMMENDED this 8th day of January, 1988, at Tallahassee, Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0691

The following constitutes my specifics rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

FOR THE PETITIONER AND RESPONDENT JOINT SUBMISSION

1 - 5. Accepted and incorporated herein.

6 - 8. Accepted and incorporated herein.

9. Accepted and incorporated herein.

10 - 15. Accepted and incorporated herein.

16. Accepted as a statement of DHRS policy and the resultant figures determined thereunder but rejected as the appropriate source of information.

17 - 19. Accepted and incorporated herein.

1. Accepted as Petitioner's and Respondent's calculation but rejected as bearing in the Issue of bed need.

2. Rejected as not reducing the number of available beds.

3. Rejected.

4. Accepted and incorporated herein.

24 - 29. Accepted and incorporated herein.

1. Irrelevant.

2. Accepted and incorporated herein.

32 - 34. Accepted.

35 - 50. Accepted.

1. Accepted.

2. Accepted.

53 - 54. Accepted and incorporated herein.

55 - 56. Accepted.

57. Accepted.

58 - 59. Accepted.

60. Accepted.

61 - 65. Accepted and incorporated herein.

66 - 69. Accepted and incorporated herein.

70. Accepted.

FOR INTERVENOR

1 - 6. Accepted and incorporated herein.

1. Accepted.

2. Accepted and incorporated herein.

3. Irrelevant.

4. Accepted and incorporated herein.

5. Accepted and incorporated herein.

6. Irrelevant.

7. Accepted.

8. Accepted and incorporated herein in substance.

9. First sentence is rejected. Occupancy rates of other local facilities are not necessarily determinative of the expected occupancy rates of Petitioner in the absence of a showing of similarity of other factors.

16 - 19. Rejected as based on other than the best evidence. No original source was presented.

20. Accepted.

21 - 25. Accepted and incorporated herein.

26 - 27. Accepted.

28 - 29(b). Accepted.

30 - 31. Accepted and incorporated herein.

32. Accepted and incorporated herein.

33 - 34. Accepted and incorporated herein - except for that portion of paragraph 34 indicating the approval of Petitioner's application would be inconsistent with local health plan.

1. Accepted but not determinative.

2. Accepted but not determinative.

3. First sentence rejected as argumentative. Remainder accepted.

4. Rejected as contrary to the weight of the evidence.

5. Rejected.

40-42. Accepted except for the last sentence of paragraph 40 which is rejected.

1. Rejected as not proven.

2. Rejected as not proven. Mr. May was unaware of possible charges during lag time.

3. Accepted.

4. Accepted.

5. Accepted and incorporated herein.

6. Accepted.

7. Accepted and incorporated herein.

8. Accepted.

9. Rejected as argument rather than fact.

52 - 53. Irrelevant in light of 53. which is accepted.

54 - 55. Irrelevant in light of Intervenors' paragraph 55 which is accepted.

56 - 58. Accepted and incorporated herein.

59. Accepted.

60 - 64. Accepted.

1. Accepted.

2. Rejected as biased.

3. Accepted.

4. Accepted as to the fact that a reduction in Lakeside's income might occur, but rejected as to its severity. Intervenor presents a "worst case" picture based on speculation and conjecture.

5. Accepted that Petitioner's projected site is near that of Intervenor. Remainder rejected as conjecture.

70 - 71. Accepted.

COPIES FURNISHED:

Philip F. Blank, Esquire Reynold Meyer, Esquire 204-B South Monroe Street

Tallahassee, Florida 32301

Richard A. Patterson, Esquire Asst. General Counsel

1323 Winewood Blvd. Building One, Room 407

Tallahassee, Florida 32399-0700

W. David Watkins, Esquire Oertel & Hoffman, P.A. 2700 Blair Stone Road Suite C

Post Office Box 6507 Tallahassee, Florida 32314-6507

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

R. S. Power, Agency Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Docket for Case No: 87-000691

Orders for Case No: 87-000691