STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HEALTH QUEST CORPORATION, ) (SARASOTA COUNTY), )
)
Petitioner, )
)
vs. ) CASE NO. 88-1945
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES )
AND TRECOR, INC., d/b/a )
BURZENSKI NURSING HOME, )
)
Respondents. )
) HEALTH CARE AND RETIREMENT ) CORPORATION OF AMERICA, INC., ) d/b/a HEARTLAND OF SARASOTA ) COUNTY, )
)
Petitioner, )
)
vs. ) CASE NO. 88-1949
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES )
AND TRECOR, INC., d/b/a )
BURZENSKI NURSING HOME, )
)
Respondents. )
) ARBOR HEALTH CARE COMPANY, ) INC., d/b/a/ SARASOTA HEALTH ) CENTER, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 88-1950
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES )
AND TRECOR, INC., d/b/a )
BURZENSKI NURSING HOME, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to written notice a formal hearing was held in this case on September 7-9 and 12, 1988, in Tallahassee, Florida. Diana A. Grubbs, formerly a Hearing Officer of the Division of Administrative Hearings, conducted the
formal hearing of these cases. By Order dated November 2, 1988, these cases were assigned to William Quattlebaum pursuant to Section 120.57(1)(b)(11), Florida Statutes. By Order dated December 6, 1988, Larry J. Sartin was duly designated as the Hearing Officer to prepare a Recommended Order in these cases pursuant to Section 120.57(1)(b)(11), Florida Statutes.
APPEARANCES
For Petitioner Arbor Health Care Company, Inc., d/b/a Sarasota Health Center, Inc.:
Jay Adams, Esquire Jay Adams, P.A.
1519 Big Sky Way Tallahassee, Florida 32301
For Petitioner Health Quest Corporation:
Steven W. Huss, Esquire
1017 Thomasville Road, Suite C Tallahassee, Florida 32303
For Petitioner Health Care and Retirement Corporation of America, Inc., d/b/a Heartland of Sarasota County:
Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32308
For Respondent Trecor, Inc. d/b/a Burzenski Nursing Home:
James M. Barclay, Esquire
231 A East Virginia Street Tallahassee, Florida 32301
For Respondent Department of Health and Rehabilitative Services:
Theodore E. Mack Assistant General Counsel Department of Health and
Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
INTRODUCTION
In October of 1987, eighteen certificate of need applications were filed with the Respondent, the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department"), seeking approval of certificates of need for nursing home beds to be located in Sarasota County, Florida. All eighteen applications were reviewed by the Department comparatively and competitively.
By notice published in the Florida Administrative Weekly on March 4, 1988, the Department indicated its intent to grant the application filed by the
Respondent, Trecor, Inc., d/b/a Burzenski Nursing Home (hereinafter referred to as "Trecor"), and to deny the other seventeen applications.
Eleven of the denied applicants, including the Petitioners in these cases, filed Petitions for a formal hearing challenging the Department's proposed action. The eleven Petitions were filed with the Division of Administrative Hearings and were subsequently consolidated. All of the applicants except the three Petitioners in these cases subsequently voluntarily dismissed their Petitions and their cases were closed.
In a letter dated July 26, 1988, it was indicated that the parties had stipulated that all of the criteria of Section 381.705, Florida Statutes, are applicable to these proceedings except Sections 381.705(1)(d), (j), (k) and (2)(b), Florida Statutes. The parties agreed that these Sections are not applicable to these proceedings. The parties also stipulated that the state health plan has been met by all of the applicants or that it does not apply to these proceedings. Finally, the parties stipulated that there is a need for at least 75 additional nursing home beds for Sarasota County for the relevant planning horizon.
Prior to the commencement of the formal hearing the parties prefiled the testimony of their expert witnesses.
At the formal hearing Arbor Health Care Company, Inc., d/b/a Sarasota Health Center, Inc., (hereinafter referred to as "Arbor" prefiled the testimony of the following individuals, who were accepted as experts in the areas noted: Donald C. Nelson (nursing home construction, engineering and cost estimation); Paul W. Hronjak (health planner); Greg Foppiani (nursing home administration); and H. Bruce Dukeman (health care economics and finance). Arbor also prefiled the "comparative" testimony of John Rondot. Arbor exhibits 1-10 and 12-19 were accepted into evidence. Arbor exhibit 11 was withdrawn.
Health Quest Corporation (hereinafter referred to as "Health Quest"), prefiled the testimony of the following individuals, who were accepted as experts in the areas noted: Robert Beiseigel (health care financial analysis and feasibility, with an emphasis on the provision of health care services); Kevin Krisher (health care planning, and nursing home planning and development); Paul Reilly (medical facilities, design, architecture, construction, equipment and related costs); Donna Vliet (geriatric nursing care); Thomas Kelly (nursing home administration); Mary Joe Ball (geriatric social worker); and Dr. Kevin O'Neil (geriatric medicine and nursing home care in Sarasota County). The prefiled testimony of Donna Drymon was also filed. Ms. Drymon was not accepted as a expert witness, however. Health Quest also filed the deposition testimony of Paul Reilly, with the agreement of the parties, after the conclusion of the formal hearing. Health Quest exhibits 1-17 and 3A were offered into evidence.
All were accepted except exhibits 12 and 17. Health Quest offered 2 exhibits with the deposition testimony of Mr. Reilly. Those exhibits are hereby accepted into evidence.
Health Care and Retirement Corporation of America, Inc., d/b/a Heartland of Sarasota County (hereinafter referred to as "HCR"), prefiled the testimony of the following individuals, who are accepted in the areas noted: Milo Bishop (health planning and development); Paul Sieben (nursing home architecture and development); Bruce Gerard Schroeder (financial feasibility of nursing homes); Brenda Kennedy (geriatric nursing and nursing home quality of care); Richard Giles (nursing home administration); and Carolyn Lookabill (design and development of programs for the treatment of Alzheimer's disease and related
disorder victims). HCR exhibits 1-7 were also offered and accepted into evidence. HCR exhibit 8 was offered into evidence with the deposition testimony of Paul Reilly. That exhibit is hereby rejected.
HCR, upon agreement of the parties did not call any of its witnesses for cross-examination at the formal hearing. HCR did not specifically offer its witnesses as experts at the formal hearing or in its prefiled testimony. In its proposed recommended order, Trecor suggests, therefore, that any opinion testimony offered by HCR's witnesses may not be relied upon in determining what the facts of this case are. This suggestion, based upon the parties agreement concerning the manner in which HCR would present its case, is without merit.
HCR filed a Motion to Strike subsequent to the conclusion of the formal hearing in which it has argued why Trecor's argument should be rejected. HCR's argument is persuasive. Therefore, HCR's witnesses have been accepted as experts in the areas noted, supra. Striking the portions of Trecor's proposed recommended order cited by HCR in its Motion would not, however, be appropriate. Therefore, the Motion to Strike is hereby denied.
Trecor prefiled the testimony of the following individuals, who were accepted as experts in the areas noted: Alan S. Katzman (nursing home construction costs); Mitchell Friedman (nursing home operation and management); Gail Buck (health planning); Muriel T. Lottinville (nursing home administration); Judy W. Caldwell (health care accounting, including financial feasibility); and David Tisch (nursing home architecture, nursing home construction and construction costs). Trecor exhibits 1-2 were accepted into evidence.
Finally, the Department prefiled the testimony of Elizabeth Dudek. Ms.
Dudek was accepted as an expert in health planning and certificate of need review. The Department also filed, with the agreement of the parties, the deposition testimony of Ms. Dudek subsequent to the conclusion of the formal hearing.
During the formal hearing the parties stipulated that HCR owns and operates Kensington Manor, a 147-bed nursing home, which has received a license from the Department rated as "standard." Kensington Manor is located in Sarasota County, Florida. A Recommended Order has been issued by the Division of Administrative Hearings recommending approval of a certificate of need for an additional 60 nursing home beds for Kensington Manor.
Subsequent to the formal hearing Health Quest filed a Request for Official Notice. The Department filed a Motion to Strike Petitioner Health Quest Corporation's Request for Official Notice and Trecor filed a Response in Opposition to Health Quest's Request for Official Notice. By Order dated November 10, 1988, Health Quest's Request was denied.
The parties have filed proposed recommended orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.
ISSUE
Whether a certificate of need for an additional 60 nursing home beds to be located in Sarasota County, Florida, in July, 1990, should be granted to any of the four competing certificate of need applicants in these proceedings?
FINDINGS OF FACT
Procedural.
Arbor, Health Quest, HCR, Trecor and fourteen other applicants filed certificate of need applications with the Department in the October, 1987, nursing home bed certificate of need review cycle of the Department for Sarasota County.
Each of the applicants involved in these cases filed a letter of intent with the Department within the time required for the filing of letters of intent for the October, 1987, nursing home bed certificate of need review cycle.
Each of the applicants involved in these cases filed their certificate of need application within the time required for the filing of certificate of need applications for the October, 1987, nursing home bed certificate of need review cycle. The applications were deemed complete by the Department.
The Department completed its State Agency Action Report for the October, 1987, nursing home bed review cycle on February 19, 1988.
The State Agency Action Report relevant to these cases was published by the Department in the Florida Administrative Weekly on March 4, 1988.
The Department proposed to approve the certificate of need application filed by Trecor and to deny all other applications.
Eleven of the applicants whose certificate of need applications were denied by the Department filed Petitions pursuant to Section 120.57(1), Florida Statutes, challenging the Department's proposed action. All of the Petitioner's except the three Petitioners in these cases withdrew their Petitions.
The Parties.
The Department.
The Department is the agency responsible for reviewing certificate of need applications for or nursing home beds to be located in Sarasota County, Florida.
Arbor.
Arbor is a nursing home company that designs, develops, constructs and operates nursing homes.
Arbor's corporate headquarters are located in Lima, Ohio. Arbor owns and operates eighteen nursing home and adult congregate living facilities comprising approximately 2,218 beds.
In Florida, Arbor owns Lake Highlands Nursing and Retirement Center in Clermont, The Village at Brandon, and The Village at Countryside.
In Florida, Arbor is currently developing certificate of need approved facilities in Clay, Orange, Polk, Pinellas and Sarasota Counties.
Arbor formed Sarasota Health Center, Inc., to hold the certificate of need it is seeking in this proceeding. Although this corporation is in form the applicant, Arbor is in substance the applicant in these proceedings.
Health Quest.
Health Quest is an Indiana corporation which has been in the business of constructing and operating nursing homes and retirement housing facilities for approximately twenty years.
Health Quest currently operates eleven nursing centers and three retirement housing developments.
In Florida, Health Quest operates three nursing centers and two retirement housing developments. The nursing centers are located in Sarasota, Jacksonville and Boca Raton, Florida.
The Jacksonville center is located adjacent to, and is operated in conjunction with, a retirement facility.
The facility located in Sarasota is Regents Park of Sarasota (hereinafter referred to as "Regents Park"), a 53-bed sheltered nursing center. Regents Park is located at Lake Pointe Woods, a Health Quest retirement community, which includes 212 independent living apartments and 110 assisted living apartments. The assisted living apartments qualify as an adult congregate living facility. The 53 sheltered nursing home beds are authorized as part of a living care complex pursuant to Chapter 651, Florida Statutes.
Health Quest has received approval from the Department to locate 60 nursing home beds, which Health Quest has received as part of a certificate of need for 180 nursing home beds, at Regents Park. The other 120 approved nursing home beds will be located at another facility to be constructed in Sarasota County by Health Quest.
Health Quest also has two other projects under construction in Florida: a new facility in Winter Park, Florida, and a new facility in Sunrise, Florida.
HCR.
HCR is a corporation engaging in the business of designing, developing, constructing and operating nursing homes and related facilities.
HCR is a wholly-owned subsidiary of Owens Illinois Corporation.
HCR operates approximately 125 facilities with approximately 16,000 beds. HCR has designed and built over 200 nursing homes and related health care facilities.
24 HCR owns and operates ten nursing homes in Florida, including Kensington Manor, a 147-bed nursing center located in Sarasota County, Florida. HCR also has ten other projects being developed in Florida.
Trecor.
Trecor is a Florida corporation formed to engage in the business of developing and operating facilities within the full spectrum of the health care industry.
Trecor was founded in 1985 when it acquired Burzenski Nursing Home (hereinafter referred to as "Burzenski"). Trecor does not own or operate any other health care facility.
Burzenski is an existing nursing home with 60 dually certified beds located in the City of Sarasota. The facility was built in 1955 as a private residence. An addition to the facility was constructed in 1962.
The Proposals.
Arbor's Proposal.
Pursuant to a stipulation with the Department dated September 9, 1987, Arbor received certificate of need 4182. Certificate of need 4182 authorizes Arbor to construct a 60-bed nursing home in Sarasota County.
20. Arbor's approved 60-bed nursing home facility will consist of 18,000 gross square feet. Costs of $2,200,000.00 have been approved by the Department in the certificate of need issued for the facility.
Arbor intends to develop certificate of need 4182 by building a facility large enough for 120 beds. This facility will house the approved 60 nursing home beds and, if Arbor's application in this case is not approved, an additional 60 beds, licensed as adult congregate living facility beds.
In this proceeding Arbor is requesting approval of a proposed conversion of the 60 adult congregate living facility beds to 60 nursing home beds.
Arbor has proposed the construction of an additional 18,000 gross square feet to house the additional 60 nursing home beds sought in this proceeding. The proposed cost of the proposal is $2,380,000.00. The total cost of 120 bed facility will be $4,580,000.00.
Health Quest's Proposal.
Health Quest is seeking approval to convert its 53 sheltered nursing center beds at Regents Park to nursing home beds and to add 7 nursing home beds. The 60 nursing home beds are to be housed in the new community nursing home facility at Regents Park. The beds will be housed in 30,945 square foot of the Regents Park facility.
Health Quest also intends to add 60 nursing home beds, which have already been approved by the Department, to Regents Park.
The certificate of need application filed by Health Quest indicates that its proposal involves no capital costs. This is incorrect. There will be minimal costs associated with the addition of the 7 additional nursing home beds being sought by Health Quest which it has failed to include in its proposal. Health Quest did not present evidence concerning the total cost of the facility
it plans to use to house the proposed 60 beds or the cost of the 60 beds already approved by the Department which it plans to add to Regents Park.
HCR's Proposal.
HCR is seeking approval to construct a new, freestanding 60-bed nursing home in Sarasota County.
HCR's proposal also includes a 31-bed adult congregate living facility.
The nursing home component will consist of 25,600 gross square feet (including 2,300 square feet to be used for adult day care). The total facility will consist of 43,000 gross square feet.
Total capital cost for the nursing home component is estimated to be
$2,519,000.00. The total cost, including the costs attributable to proposed adult day care services, is $2,657,000.00. The cost of the 31-bed adult congregate living portion of the project will be $1,800,000.00. The total cost of HCR's planned facility is $4,457,000.00.
Trecor's Proposal.
Trecor is seeking approval to construct a 60-bed addition to the Burzenski 60-bed nursing home. Burzenski is located at 4450 Eighth Street, Sarasota, Florida. The building in which the existing 60 nursing home beds are housed will be replaced by Trecor with a new building.
The existing Burzenski building has out-lived its useful life and contains several structural deficiencies. Operations are severely restricted and inefficient. Existing three and four bed wards limit the placement of residents.
The existing building does not comply with all current licensure requirements. The noncompliance, however, was "grandfathered" in.
In order to replace its existing building with a modern building which meets all current licensure requirements, Trecor applied for a certificate of need in 1985 to build a replacement facility on an adjoining parcel of real estate for which Trecor held an option to purchase at the time. This application was approved on December 4, 1985. After an error by Trecor caused the time established for exercising the certificate of need to pass and a requested six-month extension of the certificate of need was denied by the Department, the certificate of need to construct the replacement facility lapsed.
Another application for a replacement facility was filed in January, 1987. This application was approved by the Department in May, 1987. The replacement facility was not, however, constructed. Subsequently, in April and May, 1988, the Department determined that replacement of the existing building was exempt from certificate of need review.
Trecor now proposes to add 60 nursing home beds at the same time that it builds its replacement facility for its existing 60 nursing home beds. The new nursing home beds will be housed on a second floor to be built on the replacement facility.
In Trecor's application for (30 additional nursing home beds, Trecor has proposed the addition of 12,061 gross square feet to its replacement facility and a project cost of $885,210.00. The cost of Trecor's replacement facility will be $1,303,424.00 plus a $1,400,000.00 debt on the existing building. The total cost of Trecor's 120 bed facility will be $3,588,634.00.
Section 381.705(1)(a), Florida Statutes.
Numeric Need.
Pursuant to the need methodology of Rule 10- 5.011(1)(k)(2), Florida Administrative Code, there is a need for an additional 75 community nursing home beds for Sarasota County for July, 1990, the planning horizon applicable in these cases.
All of the applicants have agreed with the Department's determination of the need for additional nursing home beds for Sarasota County. All of the applicants are seeking to provide 60 of the needed nursing home beds.
The District Health Plan.
The district health plan for the Department's District 8, which includes Sarasota County, provides certain standards and criteria to be considered in determining community nursing home care need.
The policy guidelines and their application, if applicable to the applicants in this proceeding, are as follows:
Community nursing home services should be available to the residents of each county within District Eight. Sarasota County is a separate planning subdistrict for community nursing home beds. Therefore, this guideline should be applied to Sarasota County. All of the applicants will increase the availability of nursing home services to the residents of Sarasota County.
Community nursing home beds should be geographically distributed throughout the counties of District Eight to promote optimal availability and accessibility. The 2,264 existing licensed and 283 approved community nursing home beds located, or to be located in Sarasota County, are already geographically distributed throughout Sarasota County. All of the applicants will increase geographic distribution of beds throughout Sarasota County, regardless of where they may be located.
At a minimum, community nursing home facilities should make available, in addition to minimum statutory regulation, in the facility or under contractual arrangements, the following services:
pharmacy g. occupational therapy
laboratory h. physical therapy
x-ray i. speech therapy
dental care j. mental health counseling
visual care k. social services
diet therapy l. medical services All of the applicants will meet thin guideline.
New and existing community nursing home bed developments should dedicate 33-1/3 percent of their beds to use for Medicaid patients. The
applicants have proposed to provide the following percentage of care to Medicaid patients:
Arbor: 45%
Health Quest: 16.7%
HCR: 42%
Burzenski: 59% 1st Year; 60% 2d Year.
All of the applicants except Health Quest comply with this guideline.
Community nursing home facilities in District Eight should expand their financial base to include as many reimbursement mechanisms as are available to them including Medicare, Medicaid, Champus, VA, and other third-party payers, and private pay. This guideline applies to existing facilities. None of the applicants are proposing to "expand their financial bases" in the manner suggested in this guideline.
Community nursing home (skilled and intermediate care) facilities in each county should maintain an occupancy rate of at least 90 percent. This guideline has been filled.
New community nursing home facilities may be considered for approval when existing facilities servicing comparable services areas cannot reasonably, economically, or geographically provide adequate service to these service areas. Existing facilities cannot reasonably meet the need for the 75 additional nursing home beds in Sarasota County for July, 1990.
No new community nursing home facility should be constructed having less than 60 beds. However, less than 60 beds may be approved as part of an established acute care hospital facility. All of the applicants meets this guideline.
Expansion of existing facilities to 120 beds should be given priority over construction of new facilities in the health service area. The proposals of Arbor, Health Quest and Trecor meet this guideline. The proposal of HCR does not meet this guideline.
Each nursing home facility should have a patient transfer agreement with one or more hospitals within an hour's travel time, or the nearest hospital within the same community. All of the applicants meet, or will meet, this guideline.
The proposed project should have a formal discharge planning program as well as some type of patient follow-up service with discharge/transfer made available seven days a week. All of the applicants meet this guideline.
Nursing home services should be within at least one hour typical travel time by automobile for at least 95 percent of all residents of District Eight. This guideline is not applicable.
Community nursing homes should be accessible to residents throughout District Eight regardless of their ability to pay. All of the applicants meet this guideline. Health Quest meets this guideline less than the other applicants because of its minimal Medicaid commitment.
All community nursing homes and applicants for community nursing homes should document their history of participation in Medicaid and medicare
programs, and provide data on an ongoing basis to the District Eight Local Health Council as requested. All of the applicants meet this guideline. Health Quest has not, however, provided Medicaid care at Regents Park. Health Quest does provide Medicaid at all its other nursing centers and will obtain Medicaid certification at Regents Park if its application for a certificate of need in this case is approved. Medicare is not provided at Burzenski at this time.
Burzenski will, however, provide Medicare at its proposed facility.
Failure of a holder of a certificate of need to substantially comply with statements of intent made in the application and relied upon the Department of Health and Rehabilitative Services as set forth in the Certificate shall be cause for the Department to initiate an action for specific performance, fines as specified in s. 381.495(3), or injunctive relief. This guideline is not applicable.
Need for Services.
HCR conducted a "non-numeric community need survey" in Sarasota County. Based upon this survey, HCR has suggested that there is an unmet need for 1,600 nursing home beds for Sarasota County for Alzheimer patients and other dementia patients. HCR's conclusions concerning unmet need for services for Sarasota County are unrealistic.
HCR failed to prove that any need in Sarasota County for services for Alzheimer patients and others is not being met adequately.
Services for Alzheimer patients are currently being provided by Trecor and Health Quest.
HCR and Trecor have proposed to dedicate 30 of their proposed nursing home beds to the care of Alzheimer patients and patients with other forms of dementia.
All of the applicants propose to provide a full range of services to their residents, including sub-acute care.
Other Considerations.
Health Quest's avowed purpose for the proposed conversion of its 53 sheltered beds is to insure that Regents Park remains available for use by the general public.
Florida law allows sheltered nursing home beds to be used by persons other than residents of an adult congregate living facility for five years from the issuance of a license for the sheltered nursing home beds.
Regents Park received its license in November, 1986. Therefore, its sheltered nursing home beds can remain available for use by the general public until November, 1991.
Health Quest has received a certificate of need for 180 nursing home beds for Sarasota. Health Quest intends on placing 60 of those beds at Regents Park. The other 120 beds will be placed at another facility to be constructed in Sarasota County.
Health Quest may be able to use some of its 180 approved nursing home beds to avoid the closing of Regents Park to the general public. Health Quest
has not, however, explored this alternative. Health Quest's decision not to pursue this course of action is based in part on its decision that the 43% Medicaid care required for its certificate of need for 180 nursing home beds is not acceptable at Regents Park.
Health Quest has failed to prove that its proposal is needed because of its desire to convert its sheltered beds to community nursing home beds.
Section 381.705(1)(b), Florida Statutes.
The evidence in this case failed to prove that like and existing health care services in Sarasota County are not available, efficient, appropriate, accessible, adequate or providing quality of care except to the extent that existing services cannot meet the need for 75 additional nursing home beds in Sarasota County.
Section 381.705(1)(c), Florida Statutes.
Arbor.
Two of Arbor's three licensed facilities in Florida are currently rated superior. The other facility is rated standard.
Arbor's proposal may qualify it for a superior rating at its proposed facility.
Arbor proposes to provide sufficient services, safeguards and staff. Arbor should be able to provide adequate quality of care in its proposed facility.
Health Quest.
Health Quest has a corporate policy of emphasizing quality of care. It attempts to obtain the highest quality rating in every community it serves.
Health Quest's facilities in Jacksonville and Boca Raton have been rated superior.
Health Quest's Sarasota facility has not been in operation long enough to qualify for a superior rating.
Health Quest's Sarasota facility offers a high level of staffing, including a Human Resources Director, who is responsible for personnel administration and training, a full time social activities director and an activities coordinator. It also has a high nursing ratio.
Health Quest is proposing the highest level of staffing of the applicants in this proceeding.
Extensive training and development of staff at Health Quest's Sarasota facility is provided. Orientation training and in-service training on an on- going basis will be provided.
Health Quest proposes to provide sufficient services, safeguards and staff. Health Quest should be able to provide adequate quality of care in its proposed facility.
HCR.
HCR's existing Sarasota nursing home has received a license with a standard rating. Other HCR facilities have received standard ratings, including some facilities which were acquired by HCR with superior ratings. HCR also has facilities which have been rated superior.
HCR will enhance the quality of care available by providing a full range of services, from the least intensive level (adult day care) to the most intensive levels (i.e., sub- acute care). HCR's proposal to provide adult day care, a dedicated Alzheimer's unit, sub-acute care and respite care, and its adult congregate living facility will enhance quality of care in Sarasota County.
HCR adheres to extensive quality assurance standards and guidelines.
HCR provides adequate training, exceeding state minimum requirements, for its staff.
HCR proposes to provide sufficient services, safeguards and staff.
HCR should be able to provide adequate quality of care in its proposed facility.
Trecor.
Trecor has contracted with Central Care, Inc., a Florida corporation providing a full spectrum of health care and retirement living services, to manage its facility.
Trecor provides education and training for its staff on an ongoing basis.
Even though Trecor is operating in an inadequate building, Trecor received a superior rating in 1986-1987 and 1987-1988.
Trecor proposes to provide sufficient services, safeguards and staff. Trecor should be able to provide adequate quality of care in its proposed facility.
Section 381.705(1)(e), Florida Statutes.
None of the applicants provided sufficient proof to conclude that they will provide joint, cooperative or shared health care resources sufficient to provide them with an advantage over the other applicants.
Section 381.705(1)(f), Florida Statutes.
None of the applicants proved that there is any need in the service district for special equipment or services which are not reasonably and economically accessible in adjoining areas.
Section 381.705(1)(g), Florida Statutes.
None of the applicants proved that this criterion applies in this proceeding.
Section 381.705(1)(h), Florida Statutes.
All of the applicants' proposals will be accessible to all residents of the service district. Health Quest will, however, provide less access to Medicaid residents than the other applicants.
Trecor will attempt to initiate internship and training programs for area nursing and allied health programs, and provide clinical placements.
Health Quest participates in training programs for nurses from Sarasota Vocational/Technical school. A certified nursing aide program is also offered by Health Quest through Sarasota Vocational/Technical School.
All of the applicants will be able to attract and maintain the staff necessary to operate their proposed facilities.
HCR is proposing to provide the highest salaries and benefits for staff.
Health Quest already has staff for its existing 53 beds. Health Quest is adding, however, 60 nursing home beds to Regents Park. HCR failed to prove that all of the existing staff will be used to staff the proposed 60 nursing home beds and not the already approved 60 nursing home beds.
Section 381.705(1)(i), Florida Statutes.
Immediate Financial Feasibility.
Short-term financial feasibility is the ability of an applicant to finance a project.
Arbor.
The total projected cost of Arbor's proposed 60-bed addition is
$2,380,000.00. The total cost for its 120-bed facility is $4,580,000.00. Arbor's projected costs are reasonable.
Arbor is proposing to contribute 10% of the cost of its proposal and finance the remaining 90%.
Arbor has $39,000,000.00 in bank lines of credit, of which
$34,000,000.00 remain available for development of Arbor's proposed project.
Arbor also has sufficient money market funds to meet its projected equity contribution of 10%.
Arbor has demonstrated immediate financial feasibility of its proposed project.
Health Quest.
Health Quest indicated in its application that there were no capital costs associated with its proposal. This is not correct. It will have some minor costs for the addition of the seven new nursing home beds it is seeking.
Health Quest's proposal is the lowest in terms of additional capital costs which must be incurred. Most of the capital costs associated with the 53
nursing home beds it is seeking were already incurred when it built Regents Park. Health Quest did not provide proof of the cost of Regents Park.
The unaudited financial statements of Health Quest indicate that it experienced a loss of $3,200,000.00 in 1986 and a loss of $5,000,000.00 in 1987. Health Quest has net worth and equity of $300,000.00 on over $200,000,000.00 in assets.
The losses Health Quest has been experiencing have been the result of Health Quest's development activities.
Health Quest can finance its project with internal funds. The evidence failed to prove that Health Quest must liquidate assets to generate operating funds.
Health Quest demonstrated immediate financial feasibility of its proposed project.
HCR.
HCR's total estimated project costs for its 60-bed facility is
$2,657,000.00. This amount includes the cost of the portion of the project to be used for adult day care ($138,000.00). The costs to be incurred for the adult congregate living facility is $1,800,000.00. HCR's projected costs are reasonable.
HCR intends to contribute 25% of the total project costs and finance the remaining 75%.
HCR has sufficient funds on hand to fund 25% of its project costs. In fact, HCR has the ability to contribute 100% of the total project costs. HCR has lines of credit with banks and other sources of obtaining financing for the project, including a loan from its parent corporation.
HCR has demonstrated immediate financial feasibility of its proposed project.
Trecor.
The total cost of Trecor's proposed 60-bed nursing home addition is
$885,210.00. The total cost of replacing the existing Burzenski building is projected as $3,588,634.00 ($885,210.00 for the proposed addition; $1,400,000.00 debt on the existing building; and $1,303,424.00 for the replacement of the existing building).
Trecor is proposing to contribute 10% of the proposed project costs, or $88,521.00, and to finance the remaining 90%. To finance the entire project will require an equity contribution of over $300,000.00.
Trecor has experienced operating losses in 1986 and 1987 and has a negative net worth of $259,000.00. Trecor has a positive cash flow, however.
Trecor does not have sufficient equity to contribute 10% of the proposed project costs. The Board of Directors of Trecor has, however, adopted a resolution indicating Trecor's intent to provide the necessary contribution. Trecor can obtain the necessary funds from its owners if necessary.
NCNB has expressed an interest in financing the rest of the project. Although NCNB has not legally committed to such an arrangement, it is reasonable to conclude that a satisfactory loan agreement can be reached with NCNB or Barnett Bank.
Trecor has demonstrated immediate financial feasibility of its proposed project.
Long-Term Financial Feasibility.
Long-term financial feasibility is the ability of an applicant to operate a project at a profit, generally measured at the end of the second year of operation.
Arbor.
At the formal hearing Arbor presented an updated pro forma. Arbor suggested that the purpose of the updated pro forma was to reflect increased personnel costs and reduced utilization from 97% to 95%. According to Arbor, the changes reflect changes caused by inflation and "actual experience."
The updated pro forma submitted by Arbor includes substantial increases in salary expense ranging from 10% to 30% (and one increase of 50%). The updated pro forma also includes at least one position not included in the original pro forma filed with Arbor's application.
Arbor's original pro forma understated salary expenses. The updated salary expenses were foreseeable, and should have been foreseen, when Arbor filed its application.
The updated pro forma was accepted into evidence over objection.
In the updated pro forma, Arbor has projected a loss of $347,043.00 from revenue of $2,034,837.00 for the first year of operation and a profit of
$41,833.00 from revenue of $3,016,512.00 for the second year of operation.
Arbor has projected a payor mix of 45% Medicaid, 5% Medicare and 50% private pay. These projections are reasonable.
Arbor's projected fill-up rate is reasonable.
Arbor's projected charges are reasonable.
The evidence failed to prove that Arbor's projected revenue and expenses as contained in its original application are reasonable. The evidence also failed to prove that Arbor's projected expenses as contained in its updated pro forma are reasonable either.
Arbor has failed to prove that its project is feasible in the long term.
Health Quest.
Health Quest is operating at close to capacity at Regents Park and is already charging close to its projected patient charges. The facility has been operating at a loss. The facility experienced a profit only during its latest
month of operation. The addition of Medicaid beds will erode Health Quest's revenues to some extent.
Health Quest has projected a profit of $16,663.00 from revenue of
$1,771,303.00 for the first year of operation and a profit of $40,698.00 from revenue of $1,850,156.00 for the second year of operation.
Health Quest is projecting a payor mix of 16.7% Medicaid, 4.2% medicare and 79.2% private pay. These projections are reasonable.
Regents Park opened in November, 1986, and filled up rapidly. It has been operating at full occupancy and with a waiting list. Health Quest's estimated fill up rate is reasonable in light of this fact.
Health Quest has failed to prove that its project is feasible in the long term.
HCR.
HCR has projected a loss of $267,436.00 on $1,068,427.00 of revenue for its first year of operation and a profit of $62,729.00 on $1,772,399.00 of revenue for its second year of operation.
HCR has projected a payor mix of 42% Medicaid, 4% medicare and 54% private pay. These projections are reasonable.
HCR's projected fill-up rate to 95% occupancy is reasonable.
HCR's projected patient charges are reasonable.
HCR's projected revenue and expenses are reasonable.
HCR's project is feasible in the long term. (4). Trecor.
Trecor has projected a profit of $77,458.00 on revenue of
$2,481,229.00 for the first year of operation and a profit of $367,896.00 on revenue of $3,106,152.00 for the second year of operation. The pro forma submitted by Trecor is for the 120-bed nursing home facility and not just the proposed 60-bed project.
Trecor has a negative net worth and Trecor has been operating at a loss.
Trecor has projected a payor mix of 59% Medicaid, 3.5% medicare, 34% private pay and 3.5% V.A. These projections are reasonable.
Trecor has estimated it will achieve 50% occupancy in the first month of operation and an occupancy of 96% by the seventh month. This is a fill up rate of 2 residents a week. Arbor and HCR have projected fill up rates of 2 residents a month. Trecor does not expect to lose any patients during construction of its facility.
Trecor is currently at full occupancy and has a waiting list.
Trecor's projected fill up rate is achievable.
Trecor's projected patient charges are reasonable. They are the lowest of the competing applicants.
Trecor has failed to include some expenses in its projections. Trecor left $50,000.00 of administrative salaries out of its projections and FICA is underestimated because Trecor used the old rate. When these expenses are taken into account, Trecor's project is still financially feasible.
Trecor's projected revenue and expenses, except as noted above, are reasonable.
Trecor's project is feasible in the long term.
Section 381.705(1)(1), Florida Statutes.
Based upon the projected rates for nursing home services to be charged by the applicants, Arbor and Trecor will have the least adverse impact on patient charges, followed by HCR. Health Quest will have the greatest adverse impact on patient charges.
Generally, all of the applicants will enhance competition if their projects are approved.
Section 381.705(1)(m), Florida Statutes.
Arbor.
Arbor's building will contain 36,000 gross square feet, with 18,000 gross square feet attributable to the 60 nursing home beds it is seeking in this proceeding.
The cost of Arbor's proposed 60-bed addition is $2,380,000.00 ($132.22 per square foot) and the cost of its entire project is $4,580,000.00.
The projected cost of construction is $1,228,000.00, a cost of $68.22 per square foot.
Arbor's projected costs are reasonable.
Arbor's proposed building will provide 300 square feet per bed.
Arbor plans to build its prototype 120-bed nursing home facility. It has used its 120-bed nursing home plans for other Florida projects. These plans have been approved by the Department's Office of Licensure and Certification.
Arbors' building will comply with all code and regulatory requirements.
The building will be constructed on a 6.5 acre site which is appropriately zoned and of sufficient size.
The design of Arbor's proposed building and the proposed methods of construction are reasonable.
Health Quest.
Health Quest has already constructed the building in which its proposed 60 nursing home beds dire to be located. The building is already licensed. The building complies witch all code and regulatory requirements.
A total of 30,945 square feat will be devoted to the nursing home portion of Regents Park. This is the largest of the proposed facilities. The proposed building will have 515 square feet per bed.
There are no construction costs to be incurred for Health Quest's proposal. Construction costs have already been incurred to construct the facility in which Health Quest's proposed beds will be housed.
Health Quest's building design is of the highest quality.
HCR.
HCR is proposing to construct a 60-bed nursing home. Additional space for 31 adult congregate living beds and for an additional 60 nursing home beds will also be built.
The facility will include a dedicated 30-bed Alzheimer's unit. The inclusion of this unit requires more space.
The proposed HCR building will consist of 25,600 square feet for the 60-bed nursing home. This includes the $138,240.00 cost and the 2,300 square feet of the adult day care unit.
The projected cost of HCR's project is $2,657,000.00 or $103.79 per square foot.
The projected cost of constructing HCR's proposed building is
$1,536,000.00 or $60.00 a square foot.
HCR's projected costs are reasonable.
166. | HCR's | facility will consist of 426 square feet per bed. |
167. | HCR's | facility will comply with code and regulatory requirements. |
168. | HCR's | design and methods of construction are reasonable. |
169. | HCR's | facility will incorporate energy conservation measures. |
Trecor.
The Trecor proposal entails the addition of a 60-bed patient wing on the second floor of a two-story building. The first floor of the building will be constructed by Trecor to replace its existing building. Approval of the replacement facility is not part Trecor's proposal at issue in this proceeding.
The plans for the replacement building and the addition thereto have been developed together. The plans can be modified to insure that all of the proposed services can be accommodated in the building.
The proposed Trecor building will be constructed in phases. First, the portion of the new building which will house the 120 nursing home beds will be constructed. Patients will then be transferred to the newly constructed facility. All of the existing building except the kitchen and administration facilities will then be demolished. Patients will be fed out of the existing kitchen and the administrative functions will be handled form the old administrative facilities. The new kitchen, dining and administrative offices will then be constructed. When this portion of the building is completed, the old kitchen and administrative offices will be demolished. Although inconvenient, Trecor should be able to continue to provide quality of care during the construction period.
The other applicants have raised a number of issues concerning the Trecor building. The issues do not, however, involve violations of code or regulatory requirements for nursing home facilities.
Trecor's building will contain a total of 31,398 square feet. This total includes 19,337 square feet attributable to the existing 60 nursing home beds and 12,061 square feet attributable to the 60 nursing home beds at issue in this proceeding. The proposed building is relatively small. Trecor's architect did a very good job of properly using the relatively small parcel of real estate he had to work with. The small size of the building, however, accounts for the lower cost of the Trecor proposal. The evidence failed to prove that Trecor cannot provide adequate care, despite the building's size.
The cost of Trecor's proposed 60-bed addition is $885,210.00 ($73.39 per square foot) and the cost of its replacement facility is $1,303,424.00.
The projected cost of construction for Trecor's proposed 60-bed addition is $592,500.00, a cost of $49.13 per square foot.
Questions have been raised concerning the project development costs and the estimated architecture/engineer fees for Trecor's project. Trecor did not include all of the expenses for these items in the projected costs of its proposed 60-bed addition because the costs were included as part of building the replacement facility. Some of those costs could have been included as part of the cost of the proposal being reviewed in this proceeding. If those costs had been included, their inclusion would not affect the conclusions reached in this proceeding concerning the reasonableness of Trecor's project.
Trecor's projected costs are reasonable.
Trecor's proposed building will provide 201 square feet for the proposed 60 nursing home beds, 322 square feet for the existing 60 nursing home beds and 261 square feet for the total 120 nursing home beds.
Trecor's building will comply with all code and regulatory requirements.
The Trecor facility will be located on 1.97 acres.
The design of the Trecor building and the proposed methods of construction are reasonable.
Trecor's facility will incorporate energy conservation measures.
Section 381.705(1)(n), Florida Statutes.
All of the applicants have a history of providing care to Medicaid patients. Health Quest, however, does not provide care to Medicaid patients at Regents Park.
If Health Quest's application is approved, Regents Park will become Medicaid certified.
The projected Medicaid of the applicants is as follows:
Arbor: | 45% |
Health Quest | 16.7% |
HCR | 42% |
Burzenski | 59% first year; 60% second year |
All of the applicants except Health Quest are proposing to provide at least 42% Medicaid, which is the average Medicaid provided in Sarasota County.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida statutes (1987).
The parties stipulated that the issue in this case should be resolved based upon an evaluation of the proposals of the four competing applicants pursuant to the criteria of Sections 381.705(1) and (2), Florida Statutes. The parties stipulated that the criteria of Sections 381.705(1)(d), (j), (k) and (2)(b), Florida Statutes, have been met by all of the applicants or do not apply to the proposals subject to review in this proceeding. The parties also stipulated that the state health plan has been met by all of the applicants or that it does not apply. The decision as to which applicant should be awarded a certificate of need for 60 nursing home beds for Sarasota County must be based upon a balanced consideration of all of the remaining statutory and rule criteria applicable. North Ridge General Hospital, Inc. v. Capital NME Hospitals, Inc., 478 So. 2d 1138 (Fla. 1st DCA 1985); and Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So. 2d 83 (Fla. 1st DCA 1985).
The burden of proving entitlement to a certificate of need is on the party proposing such entitlement. See Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).
The parties have raised several issues concerning the completeness of the certificate of need applications of various applicants. The arguments concerning these issues are rejected based, in part, on the stipulations of the parties. The parties stipulated that the determination of which applicant should be awarded a certificate of need in this proceeding should be based upon the portions of Sections 381.705(1) and (2), Florida Statutes, the parties agreed were applicable in these proceedings. The concerns raised concerning the completeness of applications are contrary to this stipulation. Additionally, the Department deemed the applications of the all four applicants to be complete in 1987 shortly after the applications were filed. To now declare an application to be incomplete would be improper.
Section 381.705(1)(a), Florida Statutes, requires that an application for a certificate of need be evaluated with respect to the "need for health care facilities and services. . . in relation to the applicable district plan and state health plan . . . ." The parties stipulated that the state health plan had been met by the parties or did not apply. The parties stipulated that this criterion otherwise applies to these proceedings. In its proposed recommended order, however, Health Quest raised the question of whether the district health plan applicable to Sarasota County has been properly adopted pursuant to Section 381.703(1)(b)1, Florida Statutes, by the Department. Based upon the stipulation of the parties it is concluded that Health Quest's argument is contrary to its stipulation. Health Quest should have specified that other sections of Chapter 381, Florida Statutes, other than the sections stipulated to by the parties, apply to this proceeding or indicated it did not agree that all of Section 381.705(1)(a), Florida Statutes, except the portion dealing with the state health plan, applies in these cases.
Based upon the evidence presented in this case, Arbor's proposal and Trecor's proposals comply with the district health plan. Health Quest's proposal does not comply with the guidelines concerning the provision of Medicaid care and accessibility to all residents. HCR's proposed facility is for only 60 nursing home beds and not 120 beds.
The parties also agreed that there is a need for an additional 75 community nursing home beds for Sarasota County for the planning horizon applicable in these cases. Since all of the applicants are seeking approval of
60 nursing home beds, there is sufficient need for approval of only one of the applications.
Health Quest has argued that it should be awarded the remaining 15 beds if its proposal is not approved. The evidence failed to prove that such an award of beds should be recommended in this case.
Health Quest also suggested that its proposal should be approved because of the possibility that its sheltered nursing home beds will be restricted to residents of its adult congregate living facility if they are not converted to nursing home beds. Health Quest failed to prove that this possibility is sufficient to warrant approval of its proposal.
HCR presented evidence concerning Alzheimer patients and other dementia patients. HCR failed to prove, however, that Alzheimer and other dementia patients are not being adequately served by existing providers.
Section 381.705(1)(b), Florida Statutes, requires a consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of "like and existing health care services." The evidence in this case failed to prove that like and existing services in Sarasota County are not available, efficient, appropriate, accessible, adequate or providing quality of care, except to the extent that existing services cannot meet the need for 75 additional nursing home beds needed for Sarasota County. Since all of the applicants are proposing to add 60 nursing home beds, no advantage is gained by any applicant under this criterion.
Section 381.705(1)(c), Florida Statutes, requires that an applicant be able to provide quality of care. The evidence proved that all of the applicants can provide quality of care.
The parties stipulated that Section 381.705(1)(d), Florida Statutes, does not apply to these proceedings.
Section 381.705(1)(e), Florida Statutes, provides for a consideration of the probable economies and improvements in services that may be derived from the operation of joint, cooperative, or shared health care resources. The weight of the evidence failed to prove that any applicant meets this criterion to any greater extent than the other applicants.
Section 381.705(1)(f), Florida Statutes, provides for a consideration of the need in the service district of an applicant for special equipment and services which are not reasonably and economically accessible in adjoining areas. The weight of the evidence failed to prove that there is a need in Sarasota County for special equipment and services not reasonably and economically accessible in adjoining areas.
Section 381.705(1)(g), Florida Statutes, provides for a consideration of the need for research and educational facilities. The weight of the evidence failed to prove that this criterion applies to these proceedings.
Section 381.705(1)(h), Florida Statutes, requires a consideration of the availability of resources, including health manpower, management personnel, and funds for capital and operating expenses. The weight of the evidence proved that all of the applicants meet this portion of Section 381.705(1)(h), Florida Statutes. Section 381.705(1)(h), Florida Statutes, also requires a consideration of the extent to which the proposed facility will be accessible to all residents of the service district. Health Quest's proposed facility will not meet this portion of the criterion as well as the other applicants. To the extent applicable, the other considerations of Section 381.705(1)(h), Florida Statutes, have been met by all of the applicants.
Section 381.705(1)(i), Florida Statutes, requires a consideration of the immediate and long-term financial feasibility of a project. All of the applicants proved that their proposals will be financially feasible in the short-term. HCR and Trecor proved that their proposals will be financially feasible in the long-term. Arbor and Health Quest, however, failed to prove that their proposals will be feasible in the long-term.
The parties stipulated that Sections 381.705(1)(j) and (k), Florida Statutes, do not apply.
Section 381.705(1)(1), Florida Statutes, requires a consideration of the probable impact of a project on the cost of providing health services proposed by the applicant. The weight of the evidence proved that all of the applicants will generally enhance competition. The evidence also proved that Arbor and Trecor will have the least adverse impact on patient charges, HCR will have the next least adverse impact and Health Quest will have the worst adverse impact on patient charges.
Section 381.705(1)(m), Florida Statutes, requires a consideration of the costs and methods of the proposed construction. The weight of the evidence proved that all of the applicants will meet this criterion.
Finally Section 381.705(1)(n), Florida Statutes, requires a consideration of the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. All of the applicants meet this provision. Health Quest, however, has not demonstrated its willingness
to provide significant Medicaid care at its proposed facility. The other proposals are proposing to provide at least the average Medicaid care currently provided in Sarasota County. Trecor proposed to provide the highest amount of Medicaid care.
In addition to the criteria discussed, supra, projects which involve a capital expenditure for new health services must meet the criteria of Section 381.705(2), Florida Statutes. To the extent that these criteria apply in these proceedings, all of the applicants proved that they meet the criteria.
Based upon the foregoing, it is concluded that the proposals of HCR and Trecor meet the criteria of Sections 381.705(1) and (2), Florida Statutes. Arbor and Health Quest have failed to prove that their proposals comply. Arbor and Health Quest have both failed to prove that their proposals are financially feasible in the long-term. Additionally, Health Quest has failed to prove sufficient dedication to the care of Medicaid patients to warrant approval of its proposal.
Based upon a balanced consideration of the applicable criteria as applied to HCR and Trecor, it is concluded that the proposal of Trecor should be approved. Trecor's proposal is the most economical ($3,588,634.00 for a 120- bed nursing home; $885,210.00 for the 60-bed proposal under consideration in this proceeding), its proposal is for a 120-bed nursing home, it will have the least impact on patient charges in Sarasota County and it proposes the highest Medicaid care. HCR's proposal is more expensive ($4,457,000.00 for a 60-bed nursing home and 31 sheltered beds; $2,657,000.00 for the proposal under consideration in this proceeding), its proposal is for only a 60- bed facility and its patient charges are higher.
The same conclusion would be reached if it was assumed that Arbor and Health Quest comply with all of the criteria of Sections 381.705(1) and (2), Florida Statutes, and a comparison is made of all four applicants. Arbor's proposal is more expensive than Trecor's ($4,580,000.00 for a 120-bed nursing home; $2,380,000.00 for the proposal under consideration in this proceeding) and it proposes less care for Medicaid patients. Health Quest failed to prove what its proposal (for the proposed conversion or for the 120-bed facility it ultimately plans to operate) will cost. Therefore, a comparison of the ultimate cost of its planned facility cannot be made with the other proposals. Although it is true that only the proposed 60-bed proposals of the applicants are technically at issue in this proceeding, the Department should take into account the total project. Even ignoring the total cost of Health Quest's proposed facility, Health Quest's proposal should not be approved instead of Trecor's because of its inadequate care of Medicaid patients.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a Final Order granting Trecor's
application for certificate of need number 5443 and denying Arbor's application
for certificate of need number 5841, Health Quest's application for certificate of need number 5442 and HCR's application for certificate of need number 5437.
DONE and ENTERED this 14th day of March, 1989, in Tallahassee, Florida.
LARRY J. SARTIN
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1989.
APPENDIX TO RECOMMENDED ORDER, CASE NOS. 88-1945; 88-1949; 88-1950
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
Arbor's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 10-13.
2 1 and 29-33.
3 15-21 and hereby accepted.
4 19-20, 34 and 36.
5 22-25.
6 37-40.
7 26-27.
28, 41 and 44-47. Trecor applied for a certificate of need in January, 1987, not May, 1987.
Hereby accepted. Not all of the applicants in this proceeding, however, have met the minimum criteria for the issuance of a certificate of need.
Not supported by the weight of the evidence and a statement concerning the proceedings.
51. The last two sentences are argument.
51. The fifth through ninth sentences are argument. The evidence proved that Health Quest is adding 60 nursing home beds to its existing facility. Therefore, if its application in this case is approved it will have a 120-bed nursing home facility.
51. The last five sentences are statements of law and argument.
Statement of law or not supported by the weight of the evidence.
15 64-66.
16 67-69 and 73.
74 and hereby accepted. The last two sentences are not supported by the weight of the evidence.
43 and 81. The fifth, sixth and eighth sentences are not supported by the weight of the evidence. The third, fourth and seventh sentences are hereby accepted.
Although this proposed finding of fact, except the last sentence, is generally correct, this is not the only factor to consider in determining whether an applicant can provide quality of care.
Argument, not relevant to this proceeding or not supported by the weight of the evidence.
52-55 and hereby accepted. The last sentence, except the reference to the state health plan, is hereby accepted. The second, sixth, ninth, tenth and eleventh sentences are not supported by the weight of the evidence or are argument.
See 52-56. Argument.
56 and hereby accepted.
85, 87-88 and hereby accepted. The last sentence is not supported by the weight of the evidence.
51, 60-61 and 86. The second, third, sixth, eighth, ninth and tenth sentences are not relevant to this proceeding, not supported by the weight of the evidence or argument.
26 92 and 114.
27 95-97 and 106-107.
28 98 and 100.
109-111. The last five sentences are argument and not supported by the weight of the evidence. See 111-113.
97 and 107. Short-term financial feasibility of Health Quest is not moot and Trecor can finance its project with the assistance of its shareholders.
Hereby accepted. The last sentence is not supported by the weight of the evidence.
115 and 118. The last four sentences are not supported by the weight of the evidence or are argument.
119-120. The last two sentences are not relevant to this proceeding or are not
supported by the weight of the evidence. See 123.
34 130 and 134.
125, 127 and 132. The fifth sentence is not supported by the weight of the evidence.
Not supported by the weight of the evidence. The last sentence is hereby accepted.
136-137 and 143. The first and last sentences are not supported by the weight of the evidence.
38-39 Not supported by the weight of the evidence, argument, not relevant to these proceedings or taken into account in determining the weight to be accorded to testimony.
40 Hereby accepted. The first and last sentences are not supported by the weight of the evidence.
41 139-141.
42 See 97, 103, 107, 113, 124, 129, 135 and
145. Arbor has not proven that it is financially feasible in the long term. The last three sentences are not supported by the weight of the evidence.
43, 46 and 56 Statements of law.
146 and hereby accepted.
Hereby accepted.
47 148 and 153-155.
48 157-158, 160 and 175.
49 161-163 and 175.
171, 175, 180 and hereby accepted. The sixth, ninth and tenth sentences are not supported by the weight of the evidence.
171. The last sentence is not supported by the weight of the evidence.
52-54 Not supported by the weight of the evidence, argument or not relevant to this proceeding.
55 185 and 187-188. The last sentence is argument.
57-58 These proposed findings of fact are contrary to the stipulation of the parties. The parties stipulated prior to commencement of the formal hearing in this case that the criteria to be considered in determining which applicant was entitled to a certificate of need were contained in Section 381.705, Florida Statutes.
Additionally, the Department accepted all of the applicants' certificate of need applications as being complete. It would not be proper for the Department to now disqualify an applicant on the
grounds that its application is not complete.
Health Quest's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 1.
2 32, 34, 37 and 41.
3 2.
4 3.
4 and 6.
7. Not all of the applicants filed petitions.
7 48.
8 15-16.
9 67-68.
10 17-19.
11 21.
12 19.
13 58-59. See 57. The weight of the evidence did not prove that Regents Park will be closed to the public "unless Health Quest's application for conversion to community status is approved."
14-15 Not supported by the weight of the evidence and not relevant to this proceeding.
16 See 36. Not supported by the weight of the evidence.
17-19 Not supported by the weight of the evidence or not relevant to this proceeding.
20 70 and hereby accepted. 21, 24, 27, 30-48,
52, 54-57, 61, 64,
70, 77, 88-89, 93,
95, 97, 107-108,
110-111, 113, 118,
124, 126, 128-129,
132, 135-136 and
138-139. Hereby accepted.
22 Hereby accepted and summary of testimony. The last two sentences are not supported by the weight of the evidence. See 91.
23 72.
25-26 88 and hereby accepted.
56 and hereby accepted.
Not relevant to this proceeding.
49 Hereby accepted. The last two sentences are not relevant to this proceeding, are based upon hearsay and constitute opinion testimony from a nonexpert witness.
50 69.
51 Not relevant to this proceeding or based upon hearsay.
53 126 and 128.
58 Hereby accepted. The last sentence is not supported by the weight of the evidence.
59 157.
60, 65-67, 71, 91,
112, 114-116,
121-122 and 125 Not supported by the weight of the
evidence.
62 Not relevant to this proceeding.
63 51 and 185-186.
68 100-101.
69 102.
72 51. The last sentence is rejected. The parties stipulated prior to commencement of the formal hearing in this case that the criteria to be considered in determining which applicant was entitled to a certificate of need were contained in Section 381.705, Florida Statutes. The parties did not indicate that Section 381.703(1)(b)1, Florida Statutes, was at issue in this proceeding or that Section 381.705(1)(a), Florida Statutes, does not apply.
73-76 Not relevant to this proceeding. The issue is not just whether nursing home services are available to all residents of the service area. Also at issue is whether each applicant is proposing to serve all of the residents of the service area. Health Quest's proposal does indicate Health Quest intends on serving a significant portion of Sarasota County's Medicaid population.
78 60-61. The portion of this proposed finding of fact prior to subparagraph a, the portion of subparagraph a appearing on page 19 of the proposed recommended order and subparagraphs b-d are rejected as argument, statements of law or as not being supported by the weight of the evidence.
79-82 Although generally correct, these proposed findings of fact are argument.
83 Not relevant to this proceeding.
84-86 Summary of testimony and argument.
87 Hereby accepted. The last sentence is not relevant to this proceeding or supported by the weight of the evidence.
90, 92 Not relevant to this proceeding.
94 Summary of testimony and argument.
96 Hereby accepted. The last sentence and
the last half of the second sentence are rejected as not being relevant to this proceeding.
98-106 These proposed findings of fact were taken into account in determining the weight to be given testimony and other evidence.
109 Although the first sentence is correct, the rest of the proposed finding of fact is not relevant to this proceeding or not supported by the weight of the evidence.
117, 119-120 Not relevant to this proceeding.
123 108. The portion of this proposed finding of fact contained on page 30 of the proposed recommended order is primarily argument and not supported by the weight of the evidence.
127 143.
130-131 and 133-134 Not supported by the weight of the
evidence, cumulative or not relevant to this proceeding.
137 The first sentence is hereby accepted. The rest of the proposed finding of fact is not supported by the weight of the evidence, argument or not relevant to this proceeding.
Summary of testimony. Not supported by the weight of the evidence.
The first two sentences are hereby accepted. The rest of the proposed finding of fact is argument and not supported by the weight of the evidence.
HCR's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 48.
2, 4-9, 13-14, 16,
19-20, 22-23, 27,
30-32, 35, 41-42,
45, 47, 49-51, 53,
63-67, 71 and 75 Hereby accepted.
3, 15 and 33 Not supported by the weight of the
evidence.
Hereby accepted. The last sentence, as it applies to Sarasota County, is not supported by the weight of the evidence.
Although generally true, this proposed finding of fact, as it applies to Sarasota County, is not supported by the weight of the evidence.
12 55.
17 37-4 and 55.
18 Hereby accepted, except that the first sentence is not supported by the weight of the evidence.
21 51 and 86.
24 51. The parties stipulated that the state health plan has been met by all of the applicants.
25 22-25.
26 76-78 and hereby accepted.
77 and hereby accepted.
78 and hereby accepted.
34 106-107.
36 Although generally true, the evidence failed to prove that HCR would provide these benefits without cost to its proposed Sarasota facility.
37 131-132.
38 133.
39 134-135.
40 89-90.
43 39-40, 163-164 and 166.
44 152, 167-170, and 180.
46 169-170.
48 165-166.
52 Hereby accepted. The weight of the evidence failed to prove that appropriate services for "AD patients" are not adequately available.
54 The parties stipulated that the state health plan has been met by all of the applicants.
55 2-3.
56-58 These proposed findings of fact are contrary to the stipulation of the parties. The parties stipulated prior to commencement of the formal hearing in this case that the criteria to be considered in determining which applicant was entitled to a certificate of need were contained in Section 381.705, Florida Statutes.
Additionally, the Department accepted all of the applicants' certificate of need applications as being complete. It would not be proper for the Department to now disqualify an applicant on the grounds that its application is not complete.
59 148-149.
60 Taken into account in determining the weight to be given to testimony. Not supported by the weight of the evidence.
61 123.
62 Hereby accepted except the last two sentences which are not supported by the weight of the evidence.
68-69 115-117.
70 Not relevant to this proceeding.
72 41, 45-47, 175-176, 180 and hereby
accepted.
Hereby accepted except the third through fifth sentences are not supported by the weight of the evidence.
Not supported by the weight of the evidence and not relevant to this proceeding.
Hereby accepted except the last sentence is not supported by the weight of the evidence.
The first sentence is hereby accepted. The rest of the proposed finding of fact is not supported by the weight of the evidence.
Taken into account in determining the weight to be given testimony and other evidence.
Not relevant to this proceeding.
80-81 Not supported by the weight of the evidence.
109-110. The last three sentences are not relevant to this proceeding.
Hereby accepted, except for the first two sentences, which are not supported by the weight of the evidence.
Hereby accepted except the third and last sentences are not supported by the weight of the evidence.
Not supported by the weight of the evidence. See 136.
Not relevant to this proceeding.
Trecor's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1-6, 20-24, 27, | ||
29-32, 35, 37-39 | ||
and 56. | Hereby | accepted. |
7 | 28 and | 41-42. |
8 | 41, 43 | and 81. |
9 | 26-27. | |
10 | 41, 44 | and 81. |
11 | 44-45. | |
12 | 46 and | 171. |
13 | 173. | |
14 46, 171-172 and 174.
15-16 173. The last sentence of proposed finding of fact 16 is not supported by the weight of the evidence.
17 181.
18 54-55 and hereby accepted.
19 79.
25 40, 47, 109, 111-112 and hereby accepted.
26 175 and 177.
28 178 and hereby accepted.
33 184 and hereby accepted.
34 138 and 142.
36 139-141.
40 50.
41 51.
42 51. The last three sentences are not supported by the weight of the evidence. Although the Arbor site was not disclosed, the weight of the evidence supports a conclusion that Arbor's proposal meets this portion of the district plan.
43-47 51.
48 51. The last sentence is not supported by the weight of the evidence.
49-50 51 and hereby accepted.
51 51 and hereby accepted. The last sentence is not supported by the weight of the evidence.
52-53 51.
Argument.
51 and hereby accepted.
The Department's Proposed Findings of Fact
Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection
1 48.
2-3 49.
4 Not relevant to this proceeding.
5-6 Conclusions of law.
Not supported by the weight of the evidence.
Contrary to a stipulation of the parties that all of the parties meet the state health plan to the extent that it is applicable.
See 63.
10, 13, 15 and 17 Hereby accepted.
11 See 64-84 concerning Section 381.705(1)(c), Florida Statutes. The parties stipulated that Section 381.705(1)(d), Florida Statutes, had been met or did not apply.
12 86 and 129.
14 Not relevant in this de novo proceeding and not supported by the weight of the evidence.
16 See 60-62.
COPIES FURNISHED:
Steven W. Huss, Esquire
1017 Thomasville Road, Suite C Tallahassee, Florida 32303
Charles M. Loeser Assistant General Counsel Health Quest Corporation
315 West Jefferson Boulevard South Bend, Indiana 46601
James M. Barclay, Esquire
231 A East Virginia Street Tallahassee, Florida 32301
Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32308
Jay Adams, Esquire Jay Adams, P.A.
1519 Big Sky Way Tallahassee, Florida 32301
Theodore E. Mack Assistant General Counsel Department of Health and
Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
Sam Power, Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
| Issue Date | Proceedings |
|---|---|
| Mar. 14, 1989 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 10, 1989 | Agency Final Order | |
| Mar. 14, 1989 | Recommended Order | Comparative review of applications for 60-bed nursing home Certificate Of Need for district 4. One application approved. |
