STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HOLMES REGIONAL HEALTHCARE, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 88-0394

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in this proceeding was held before Mary Clark, Hearing Officer, on July 11-13, 1988, in Melbourne, Florida, and on July 14 and 15, 1988, in Tallahassee, Florida.

The parties were represented as follows:

For Petitioner: E. G. Boone, Esquire

Jeffrey A. Boone, Esquire 1001 Avenida Del Circo Venice, Florida 33595

For Respondent: Edgar Lee Elzie, Jr., Esquire

Post Office Box 82 Tallahassee, Florida 32302

BACKGROUND AND PROCEDURAL MATTERS

On or about April 10, 1987, Holmes Regional Health Care Systems, Inc. (Holmes) filed its application for Certificate of Need (CON) #5151, to construct a 60-bed satellite hospital in Palm Bay, Florida.

Review by the Department of Health and Rehabilitative Services (HRS) was completed on December 14, 1987, when its State Agency Action Report (SAAR) was issued denying the application. This proceeding resulted from Holmes' timely request for Chapter 120, F.S., hearing on the decision.

At the hearing, Holmes presented the testimony of the following witnesses: Ned Wilford, Ann Florin, James H. Mullins, H. Philip Stall, M.D., Tim Phalen, John Alfred Sternagle, David Earl Watkins, Stanley K. Smith, Ph.D., Nick Heldreth, William E. Tipton, Richard Wagner, Homer Roddenberry, Peter Wahl, John Stephen Eavenson, Charles E. Schmitz, Rick Knapp, Dennis Halfhill, Sharon Gordon-Girvin, and Gene Nelson.

Holmes' fifteen exhibits were received in evidence. Exhibits 7 and 8, relating to traffic studies, were objected to by HRS as improper amendments to the CON application. For reasons more fully explained below, those objections were overruled.

HRS presented the testimony of Reid Jaffe, and a single exhibit, Mr.

Jaffe's resume.

The SAAR was received as Joint Exhibit #1.

After the hearing and preparation of a transcript, both parties submitted proposed recommended orders. Specific rulings on the proposed findings of fact are found in the attached appendix.

ISSUES

The basic issue is whether the applicant meets the relevant statutory and regulatory criteria for award of a CON.

In its prehearing statement and in its proposed recommended order, HRS stipulates that the following criteria are met:

Section 381.705(1)(a), F.S., regarding compliance with the district health plan;

Section 381.705(1)(c), F.S., regarding the applicant's capability and record of providing quality of care;

Section 381.705(1)(h), F.S., regarding the sufficiency of applicant's resources;

Section 381.705(1)(m), F.S., regarding the reasonableness of proposed costs and methods of construction; and

Section 381.705(2)(c), F.S., regarding the consideration of alternatives to new construction.

The following statutory criteria are deemed by HRS to be inapplicable to the proposed project:

Section 381.705(1)(f), F.S., regarding the need for special equipment or services not available in an adjacent district;

Section 381.705(1)(g) and (h), F.S., relating to the need for research, educational and training facilities;

Section 381.705(1)(j), F.S., regarding the needs of health maintenance organizations.

Section 381.705(1)(k), F.S., regarding entity providing most of its services to individuals residing beyond the service district; and

Section 381.705(2)(e), F.S., regarding nursing homes.

HRS also concedes the numeric need formulae found in the rules do not apply, and that no HRS rule is applicable to the need in this case. (HRS proposed Recommended Order, p. 2; transcript, pp 13-14.)

The remaining criteria which HRS contends are not fully met relate to accessibility, efficiency, financial feasibility and cost effectiveness. HRS states in the SAAR and argued at the hearing that Holmes' application lacked information, and that attempts to supply the information were improper amendments to the application.

FINDINGS OF FACT

The Applicant

1. Holmes Regional Health Care Systems, Inc. is a nonprofit corporation having among its subsidiaries a 528-bed acute-care, tertiary care non-profit hospital: Holmes Regional Medical Center (HRMC) located in Melbourne, Brevard County, Florida.

   
   

2. HRMC is the largest hospital in the Brevard subdistrict of HRS planning district 7. It employs approximately 1900 full and part-time staff; approximately 210 physicians serve on the medical staff. It offers a wide range of services, including comprehensive cardiovascular programs, pediatrics, psychiatry, all specialties in internal medicine and surgery, and a high-risk neonatal intensive care unit.

   
   

3. HRMC is the oldest hospital in Brevard County. It opened in 1937 with

   27 beds. Although the figure fluctuates frequently, at the time of hearing approximately 480 of its licensed beds were in service.

   
   

4. Holmes is governed by a 13-member board comprised of local business professionals who serve without compensation.

   
   

   The Project

   
   

5. Holmes proposes to reduce the licensed capacity of HRMC by 60 beds and to transfer those beds to a satellite facility to be constructed south of Melbourne in Palm Bay, still within Brevard County.

   
   

6. Total project costs for the new facility, including land (already purchased), construction and equipment is $11,656,812.

   
   

7. The 60 beds will be acute care, "medical/surgical", in 36 private rooms and 12 semi-private rooms. Pediatric, obstetric, intensive care, and other speciality services will remain at HRMC.

   
   

   Access

   
   

8. Melbourne, the site of HRMC, is in the southern end of Brevard, an elongated county on Florida's central east coast. The satellite hospital is proposed for a site approximately seven miles south and slightly west of HRMC. Palm Bay is a city which grew from five square miles to sixty-five square miles in the 1960's, when General Development Corporation (GDC) platted and began developing vast subdivisions west of the once-sleepy village lying along the Indian River.

9. Wuesthoff, the next nearest hospital in the planning district is located north of HRMC, in Rockledge, in central Brevard County.

   
   

10. The GDC development currently includes 74,000 or 75,000 platted lots throughout the city, although only approximately 15,000 have been built. The estimated population at full build-out in the year 2050 is projected at 257,000.

    
    

11. In the meantime, the City of Palm Bay is the second largest city in Brevard County, population-wise, and is projected to be the largest city in the county by 1992. In 1980 the city had 18,560 persons; in 1988, the population is over 53,000. A water and sewer service agreement between Brevard County and General Development Utilities is contributing to the sprawl, as the agreement limits buildout to thirty percent of the lots on a block with wells and septic tanks. This has pushed growth from the northern and eastern boundaries of the subdivisions into the southern and western reaches of the city limits, and farther away from HRMC in Melbourne.

    
    

12. The Palm Bay area suffers with congested traffic, as does most of South Brevard. The labyrinthine system of roads throughout the new section (the GDC development) is characterized by circles and dead end lanes calculated to promote residential integrity. An elaborate system of canals further limits access to a few through streets.

    
    

13. The only planned major improvement to road capacity in Palm Bay is the four-laning of an approximate mile and a half strip of Babcock Street, a major north-south artery.

    
    

14. Dr. Stanley K. Smith, an Associate Professor of Economics and Population Program Director at the University of Florida Bureau of Economic and Business Research, was qualified, without objection, as an expert in demographics, including population studies and projections.

    
    

15. Dr. Smith and William Tipton, Holmes' traffic and transportation engineering expert, compiled data establishing that by the horizon year 1992,

    14.4 percent of Palm Bay's population would live beyond a thirty minute drive to HRMC.

    
    

16. Utilizing trips from HRMC in peak afternoon traffic, Mr. Tipton's traffic study found four 30 minute drive time points in the Palm Bay, South Brevard area, fanning out southward from HRMC along the primary roadways.

    
    

17. Using census data and population projections developed by Brevard County planning staff, Dr. Smith calculated the population in Palm Bay that will be living beyond the 30 minute drive times in 1992.

    
    

18. Although the drive times were established at peak hours, those hours in Palm Bay are unusually long because of the staggered work hours for Harris Corporation, which with 9,000 employees, is the largest industrial employer in Palm Bay.

    
    

19. The Tipton study is also considered a reasonably conservative predictor of accessibility in 1992. By that horizon year the population will have expanded, and the 30-minute drive points will be closer to HRMC as a result of increased congestion and deterioration of traffic conditions.

    
    

20. HRS' position that access to HRMC was not a problem for Palm Bay residents was based on a personal visit to the area by its staff CON reviewer,

    Dennis Halfhill. Mr. Halfhill drove from his motel, north along US1 to HRMC, around midmorning, and determined that his drive time was only twenty-five minutes. U.S. 1 runs north-south along the Indian River on the eastern edge of Palm Bay and South Brevard County. Unlike most of the main roads in South Brevard, US 1 is four-laned. It also is in the old established section of Palm Bay, rather than in the newer population center in the south and west. Mr.

    Halfhill did not travel in the southwest area and erroneously believed he was in the center of Palm Bay along its eastern edge. He estimated the circumference of the main part of the city to be approximately five miles and believed the western city limits were east of Interstate 95, when, in fact, a vast portion, approximately 80 percent of the city's 65 square mile area, lies west of Interstate 95.

    
    

21. Geographical access by Palm Bay residents is decidedly enhanced by the creation of a satellite hospital in that community.

    
    

    Efficiency

    
    

22. Holmes can provide acute-care services in its proposed 60 bed satellite more efficiently than another free-standing facility could, and more efficiently than Holmes is currently providing those same services in its large facility.

    
    

23. The proposed facility will share with HRMC various support and ancillary services as purchasing, patient accounts, dietary, plant engineering, data processing, pharmacy, laboratory and radiology. All of Holmes' management systems will be shared with its satellite.

    
    

24. Some equipment and staff will be transferred to the new facility.

    
    

25. Because some wings of HRMC are old and outdated, the relocation to a newer, better-designed facility will result in improved utilization of nursing staff and a slightly lower staffing level overall. Holmes is considering converting the transferred beds into an observation unit for outpatient surgery and increasing its number of private rooms.

    
    

26. In addition, if the beds are transferred, Holmes anticipates the ability to move back into the hospital certain activities for which it is paying over $100,000 per year in outside rent and utilities.

    
    

    Financial Feasibility/Cost Effectiveness

    
    

27. Based on its long range planning conducted in 1981, Holmes determined there would be a future need for an acute care facility in Palm Bay. It purchased land for $315,800, and is currently operating an ambulatory care center and diagnostic center at the site.

    
    

28. The total funds required for completion of the satellite facility will come from reserves established from the operation of Holmes, the corporate holding company. No borrowing will be necessary.

    
    

29. Initially, in the first two years of operation of the satellite, there will be a slight negative impact on HRMC, but not on Holmes, the parent company, as the negative impact will be offset by the revenues at the satellite and by the cost savings shared by the two facilities.

30. Holmes anticipates net revenue at the satellite will be $404,891 the first year of operation and $2,052,911 for the second year.

    
    

31. Rick Knapp, a health care consultant, was qualified without objection as an expert in hospital and health care finance. In his opinion, the pro- forma/operating statement is realistic and achievable and the financial management of the existing facility is good. This latter opinion is based on his experience that relatively low-charge hospitals which generate an attractive bottom line, such as HRMC, are well managed hospitals.

    
    

32. HRS has acknowledged that HRAC has done well in serving medicaid patients and indigents, typically considered chronically underserved. Holmes has committed that it will continue that service with the satellite facility.

    
    

33. John Stephen Eavenson, Vice-President of Finance at HRMC and chief operating officer for Holmes, was qualified without objection as an expert in hospital and health care finance, hospital financial administration and hospital business venture analysis. In his opinion, the Palm Bay satellite hospital proposed by Holmes represents a sound financial decision.

    
    

34. Holmes considers South Brevard, including Melbourne and Palm Bay, as its service area. Approximately 92 percent of the population of the service area in need of hospitalization currently utilize HRMC. This figure is likely slightly lower for Palm Bay, alone, as some patients in that area use a hospital in Sebastian, in Indian River County, south of Palm Bay, and beyond the HRS planning district VII. Other patients go to Orlando. Aside from the economies already discussed relating to the new streamlined facility, Holmes' willingness to expend $11 million to transfer beds is motivated by a desire to preserve its market share by enhancing access to an expanding community.

    
    

    Application Content

    
    

35. The principal reason for HRS' denial, perhaps 75 percent, according to HRS Supervisor Reid Jaffe, was the lack of documentation in Holmes' application to support the proposed transfer. This reason is reflected in the cover latter to the SAAR and in comments throughout the SAAR.

    
    

36. HRS objected throughout the formal hearing to the introduction of evidence relating to access, arguing that transportation studies were not part of the original application and would be an inappropriate amendment to the application.

    
    

37. Holmes provided all information requested on the CON application form; in addition it responded in full to the three brief questions in HRS' May 15, 1987, omissions letter. Holmes' application was deemed "complete" by HRS, effective June 29, 1987.

    
    

38. With regard to availability and access, the SAAR states:

    
    

    ...the applicant did not present any information about the future traffic and growth management plans to determine if accessibility to services would be impaired....

    
    

39. Yet, the SAAR found enough information to determine compliance with the following priority of the District 7 Health Plan:

    Priority 4

    
    

    Priority for needed acute care services should be given to those applicants who transfer unutilized beds/or establish hospital facili- ties in regions of the District where access to service can be substantially improved by at least 25 minutes for 10 percent of the popula- tion of the subdistrict or a minimum of 35,000 residents.

    Joint Exhibit #1, p. 3 The SAAR comments provides:

    Priority 4-Applicant complies, Holmes Regional proposes to transfer underutilized beds. Although the area might now be within

    25 minutes of Holmes and Humana Sebastian, increased congestion is expected as Palm Bay and the area along US1 are developed.

    Joint Exhibit #1, p. 4

    
    

40. The foregoing comment possibly reflects Mr, Halfhill's personal tour of Palm Bay, a tour which the record amply reveals missed the truly congested and developed areas of this deceptively vast community.

    
    

41. An HRS reviewer with personal knowledge of a geographical area will bring his or her experience to the application review process and will not question the lack of such information in the packet, according to Reid Jaffe.

    
    

42. In other instances the reviewer uses the omissions process to question presumptions or to flesh out the necessary information. For example, in March 1988, HRS approved a CON for the transfer of 100 beds from Martin Memorial Hospital in Martin County to create a satellite facility in Port Salerno. Prior to that approval Martin Memorial submitted a revised application, responding to at least 17 omission questions, including such questions as:

    
    

    Omission #10

    
    

    What accessibility problems were experienced by residents of the proposed satellite area in obtaining acute inpatient services? How far is it to Okeechobee and Stuart? Northern Palm Beach County?

    
    

    and Omission #11

    What is the breakdown of the 100 med/surg beds to be transferred from Martin Memorial and the breakdown established at the satellite facility; i.e. ICCU, pediatrics, OB, etc.? How will the transfer affect health services at Martin Memorial? How will vacated space be utilized?

    Petitioner's Exhibit #15

    
    

43. In another similar case involving a transfer of beds by Lee Memorial Hospital, which CON application was in the same batching cycle as Holmes, HRS permitted the applicant to submit an extensive packet of information in March 1988, addressing the questions and issues raised by the SAAR. The packet included a travel time study completed well after the SAAR was issued. The Lee Memorial project was approved.

    
    

44. Holmes also attempted to present additional information, including its travel time study prepared in December 1987. It was told that additional information would be considered an inappropriate amendment to the application.

    
    

45. Although the travel time study was not included in Holmes' application, access was discussed throughout the application with references to the high growth portions of the service area, the inadequate roads and traffic congestion, and Dr. Smith's projections of population increases.

    
    

46. The application was complete, as its narrative, tables and attachments sufficiently addressed the relevant criteria of the statute and rules.

    
    

    Weighing the Criteria

    
    

47. The parties agree that numerical need is not an issue when no net increase in beds is proposed. HRS has no rule specifically governing the transfer of beds and, according to Sharon Gordon-Girvin, the HRS Administrator of Community Health Services and Facilities, the agency policy was still under consideration at the time that Holmes' current application was being reviewed. A policy framework had been discussed, but HRS conceded that the policy required patient origin data that was not available to the applicant or the department.

    
    

48. In the absence of a specific rule or policy, HRS' review and comments on the Holmes application reflect a general concern that, if no additional services are being offered, and no additional beds are needed or proposed, there must be some direct, positive health care benefit to be derived from the expenditure of $11 million to transfer beds. Concomitantly, there should also be no negative effect on the existing services.

    
    

49. These general concerns must still be translated into the statutory criteria found in section 381.705, F.S.

    
    

50. The SAAR found that Holmes' proposal at least partially met every relevant criteria.

    
    

51. In its evidence explaining and supporting its application, Holmes proved that its satellite project will significantly improve access to the population of a phenomenally fast-growing community.

    
    

52. The reduction in beds at HRMC will increase the utilization rate at that facility, which, although underutilized at less than 80 percent, is experiencing a constant increase and a better rate than the other area hospitals.

    
    

53. The loss of revenue will not negatively impact HRMC in the long-term and will positively impact the parent company, Holmes.

54. HRMC and Holmes have a reputation for quality care, reasonable costs and a commitment to serve the indigent and underserved patients in South Brevard. The same management will assure these attributes are maintained at the satellite facility. Holmes' forecasts for patient mix and utilization rates are based on a long experience in providing wide range health care services in South Brevard.

    
    

55. Its management decision to utilize $11 million of on hand resources to create the satellite is a sound business decision based on a projected need for the horizon year 1992, the growth patterns in the south west county, and a calculated desire to maintain its market share. The shared services and resources make the satellite facility economically preferable to a new separate free-standing facility of 60 beds. The removal of beds from HRMC will result in more efficient use of space in that hospital.

    
    

56. In summary, there is a need for the facility proposed by Holmes.

    
    

    CONCLUSIONS OF LAW

    
    

57. The Division of Administrative Hearings has jurisdiction over the subject matter and parties in this proceeding pursuant to Section 120.57(1),

    F.S. and Section 381.709(5)(b) , F.S.

    
    

58. The applicant has the burden of establishing its entitlement to a certificate of need. Florida Department of Transportation v. JWC Company, Inc.,

    396 So.2nd 778 (Fla. 1st DCA 1981)

    
    

59. In support of its application, Holmes presented the testimony of credible expert witnesses, most of whom were qualified without objection in the areas in which they were tendered. These included a traffic engineer, a hospital administrator, a health planner, a financial expert, a demographer, and several local planners. These individuals either explained or amplified the material within the application with regard to the relevant statutory review criteria found in Section 381.705, F.S.

    
    

60. Their testimony was not rebutted by HRS, whose one witness was not the primary or initial reviewer of the application, but who participated in the review and was designated as the agency spokesperson to explain the SAAR.

    
    

61. Rule 10-5.008(5), F.A.C. requires that a CON application meet the content requirements of Section 381.707, F.S. and include information requested on the application form. Holmes' application met those minimum requirements in its initial submission and its response to the brief omissions requested required by Subsection 381.709(3)(a): "...the staff of the department shall determine if the application is complete. If the application is incomplete, the staff shall request specific information from the applicant necessary for the application to be complete ?

    
    

62. As argued by HRS, nothing requires the agency to request every piece of information necessary for an application to be approved. Nevertheless, it is disingenuous for the agency to find an application complete, then claim that documentation provided at hearing in response to comments in the SAAR constitute amendments to the application.

    
    

63. Although a CON application may not be substantially changed, updated, or amended after it has been deemed complete, certain new evidence can be considered at hearing which is relevant to the original application. Gulf Court

    Nursing Center v. Department of Health and Rehabilitative Services, 783 So.2nd 700 (Fla. 1st DCA 1986), clarifying McDonald v. Department of Banking and Finance, 346 So.2nd 569 (Fail 1st DCA 1977), with regard to the de novo nature of Section 120.57 proceedings and the authority of an agency to control amendments to a licensing application.

    
    

64. In a predecessor to this instant proceeding, Brevard Health Services and Frank Filiberto, M.D., etc., v. Department of Health and Rehabilitative Services, 10 FALR 2485 (Final Order entered May 2, 1988), the Hearing Officer found, and HRS approved, that Holmes' proposal to transfer 60 beds, introduced after the application was filed, was an impermissible amendment to the application. The information provided by Holmes now is distinctly different from that type of amendment. The travel times, the data regarding financial feasibility, accessibility and the like, relate only to the application as originally filed and are directed to the issues raised in comments in the SAAR.

    
    

65. Although HRS argued that patients in the Palm Bay area were within 30 minutes driving time from HRMC and Humana- Sebastian, the estimate for Holmes was based on Dennis Halfhill's mistaken belief that the population center of Palm Bay was along US 1 and that the rest of the area was rural. Humana- Sebastian is outside of District VII, and other than the fact that it is in Sebastian, its exact location and accessibility to Palm Bay was not established. Nor is it relevant under the criteria in Subsection 381.705(1)(b) and (d), F.S., relating to the availability of like and existing or alternative services in the service district of the applicant.

    
    

66. The bed need methodology of Rule 10-5.011(1)(m), FAC, regarding acute care bed need, does not apply, as no additional beds will be placed in service in the planning district. No non-rule policy on transfer applications was articulated, and Ms. Gordon-Girvin stated that the policy was still being developed.

    
    

67. Without more specific guidance, Holmes addressed its application to the criteria it deemed relevant in Section 381.705, F.S. After it obtained the benefit of HRS' comments in the SAAR, it was able to provide data in response to those comments and ultimately proved the need for its proposed satellite facility.

RECOMMENDATION

Based on the foregoing, it is, hereby RECOMMENDED:

That HRS award a Certificate of Need to Holmes Regional Healthcare Systems Inc., for a 60-bed satellite hospital in Palm Bay, Florida, by virtue of a transfer of 60 licensed beds from Holmes Regional Medical Center in Melbourne, Florida.

DONE and RECOMMENDED this 8th day of November, 1988, in Tallahassee, Florida.

MARY CLARK

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 November, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-0394

The following constitute my specific rulings on the findings of fact proposed by the parties.

Petitioner's Proposed Findings

1. Adopted in paragraphs 1 and 5.

2. Adopted in paragraph 22.

3-7. Rejected as unnecessary.

8. Adopted in the background statement and in summary in paragraph 21. 9-10. Rejected as unnecessary.

11-13. Adopted in substance in paragraph 26, although the fact that the Lee application was originally denied was not clearly established.

14-15. Addressed in the background statement.

16. Addressed in the statement of issues. 17-18. Adopted in paragraph 31.

1. Adopted in paragraph 9.

2. Adopted in substance in paragraph 7.

3. Adopted in paragraph 8.

22-24. Adopted in substance in paragraph 9.

25. Adopted in substance in paragraph 23.

26-28. Adopted in paragraph 10 and paragraph 24.

1. Rejected as argument.

2. Rejected as unnecessary.

3. Addressed in the statement of issues.

4. Adopted in paragraph 31.

5. Addressed in the statement of issues.

6. Rejected as unnecessary.

7. Adopted in substance in paragraphs 15 and 18. 36-37. Rejected as unnecessary.

38. Adopted in paragraph 16.

39-40. Rejected as unnecessary.

1. Adopted in substance in paragraph 20.

2. Rejected as cumulative and unnecessary.

3. Rejected as unnecessary.

4. Adopted in substance in paragraphs 12 and 13.

5. Adopted in paragraph 21.

46-47. Rejected as unnecessary.

1. Adopted in substance in paragraph 22.

2. Rejected as unnecessary.

3. Adopted in paragraph 25. 51-52. Rejected as argument.

53-55. Rejected as unnecessary.

56. Adopted in part in paragraph 26, otherwise rejected as unnecessary. 57-59. Rejected as argument.

Respondents Proposed Findings

1. Adopted in Paragraphs 1 and 3.

2-3. Addressed in background statement. 4-5. Addressed in statement of issues.

1. Rejected as unnecessary, although the access issue is addressed in paragraphs 6-11 and paragraph 23.

2. Rejected as unsubstantiated by the evidence.

3. Rejected in part as unnecessary. No criteria requires proof that the population is not predominately located within an average 30-minute drive time. Also rejected as inconsistent with the evidence. The study involved two-way drives (see transcript pp 309-310). The cited portion of the transcript does not support the finding suggested, that the study was manipulated.

9-10. Rejected as unnecessary.

1. Rejected as unnecessary. This was not an issue in the proceeding.

2. Adopted in part in paragraph 5.

13-19. Rejected as unnecessary or irrelevant.

19-21. Rejected as contrary to the weight of evidence. 22-23. Rejected as unnecessary.

1. Rejected as immaterial. The application was not amended at hearing.

2. Addressed in conclusions of law, paragraph 4.

3. Rejected as immaterial. Occupancy rates are not at issue. 27-28. Rejected as contrary to the weight of evidence.

1. Rejected as unnecessary.

2. Rejected as cumulative and unsupported by the evidence.

3. Rejected as immaterial. The witness was credible. 32-34. Rejected as unnecessary.

35. Rejected as contrary to the weight of evidence. 36-39. Rejected as immaterial.

40. Rejected as contrary to the weight of evidence.

COPIES FURNISHED:

Lee Elzie, Esquire MacFarlane, Ferguson,

Allison & Kelly

215 South Monroe Street Tallahassee, Florida 32302

E. G. Boone, Esquire Jeffrey A. Boone, Esquire Boone, Boone, Klingbeil

& Boone, P. A.

Post Office Box 1596

Venice, Florida 34284

Sam Power, Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407

Tallahassee, Florida 32399-0700

Gregory L. Coler, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Miller, Esquire Acting General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407

Tallahassee, Florida 32399-0700

Docket for Case No: 88-000394

Orders for Case No: 88-000394