STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ST. JOHNS HOME HEALTH AGENCY, INC., )

)

Petitioner, )

)

vs. ) CASE NOS. 93-1636

) 93-4876

AGENCY FOR HEALTH CARE )

ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled cases on January 25 and 26, 1994, in Tallahassee, Florida.

APPEARANCES

For Petitioner: R. Terry Rigsby, Esquire

Geoffrey Smith, Esquire Blank, Rigsby & Meenan

204 South Monroe Street Tallahassee, Florida 32301

For Respondent: J. Robert Griffin, Esquire

Agency for Health Care Administration Suite 301, The Atrium Building

325 John Knox Road Tallahassee, Florida 32303

STATEMENT OF THE ISSUES

These consolidated cases involve a Certificate of Need for Medicare- Certified Home Health Agency in Agency for Health Care Administration (AHCA) Service District 6 for the July 1994 planning horizon. DOAH Case No. 93-1636 is a challenge by St. Johns to AHCA's determination of a fixed need pool of zero for Medicare Certified Home Health Agencies in District 6 for the applicable 1994 planning horizon. DOAH Case No. 93-4876 is a challenge by St. Johns to AHCA's preliminary denial of St. Johns' application for Certificate of Need No. 7209 seeking approval to establish a Medicare Certified Home Health Agency in District 6.

PRELIMINARY STATEMENT

On February 5, 1993, AHCA published in the Florida Administrative Weekly a Notice of Fixed Need Pool for Medicare Certified Home Health Agencies. The need calculated for District 6 in the July 1994 planning horizon was zero, based upon the numeric need methodology in rule 59C-1.031(3), Florida Administrative Code. St. Johns filed a timely Petition for Formal Hearing challenging the published fixed need pool of zero.

On or about February 22, 1993, St. Johns filed its Letter of Intent to seek a Certificate of Need (CON) to establish a Medicare certified home health agency in Polk County, in AHCA planning District 6. St. Johns subsequently filed its CON application with AHCA and the local health council on or about March 24, 1994. The application, assigned CON Action No. 7209, includes all of the minimum content items required pursuant to section 408.037, Florida Statutes.

No competing CON applications were submitted for comparative review in the applicable batching cycle.

On July 7, 1993, AHCA issued a State Agency Action Report (SAAR) which advised St. Johns of AHCA's intent to deny the CON application. Thereafter, St. Johns filed a timely challenge to AHCA's intent to deny its CON application.

St. Johns' challenge to the fixed need pool and challenge to the denial of its CON application were referred to the Division of Administrative Hearings and were consolidated for final hearing.

At the final hearing St. Johns presented the testimony of Gene Nelson, tendered and accepted as an expert in health planning; Rebecca Nunez, a registered nurse, was tendered and accepted as an expert in nursing supervision and quality of care; and Warren Silverman, a certified public accountant, was tendered and accepted as an expert in accounting and health care finance. St. Johns also entered into evidence Exhibits 1-6, which included its CON application documents; the deposition testimony of Agency for Health Care Administration (AHCA) employees Alberta Granger, Jane Peck, and Helen Jess; and the deposition testimony of Ralph C. Nobo, Jr., M.D.

AHCA presented the testimony of Alberta Granger, tendered and accepted as an expert in health planning and CON administration; Jane Peck, an employee with AHCA's Office of Licensure and Certification; and Elfie Stamm, tendered and accepted as an expert in health planning.

Also received in evidence were documents from AHCA's licensure files (Joint Exhibits 1-13) and the State Agency Action Report (Joint Exhibit 14). St. Johns reserved its objection to the hearsay nature of the licensure file documents.

The transcript of hearing was filed on February 14, 1994, and the parties filed their proposed recommended orders on February 28, 1994. The findings of fact proposed by each party are addressed in the attached appendix.

FINDINGS OF FACT

1. St. Johns Home Health Agency, Inc. (St. Johns) is a Florida not-for- profit corporation. It operates medicare certified home health agencies in Agency for Health Care Administration (AHCA) planning district 11 (Dade and Monroe counties) and in district 10 (Broward County); and it recently was approved for and opened an agency in district 3, with an office in Hernando County.

2. St. Johns' application for CON proposes a fourth agency, in district 6, located in, and primarily serving Polk County. This, like St. Johns' other agencies, would be free-standing; that is, it would not be hospital-based or attached to another institutional health care facility. As the name implies, Medicare certified home health agencies primarily serve elderly Medicare patients and Medicare is the payor of first resort for those patients. Other home health agencies, for which CON's are not required, serve Medicaid and some other patients, but are not permitted to accept Medicare patients.

   
   

   The Fixed Need Pool

   
   

3. The fixed need pool published by AHCA on February 5, 1993 was calculated based on the formula in rule 59C-1.031(3), F.A.C. That rule was challenged by Principal Nursing Services, Inc. and during the proceeding in this case, the rule was invalidated in a final order by Hearing Officer, Diane Cleavinger, in Principal Nursing v. Agency for Health Care Administration, DOAH Case #93-5711RX (Final Order entered January 26, 1994).

   
   

4. Application of the formula in rule 59C-1.031(3), F.A.C. resulted in a fixed need of zero for the July 1994 planning horizon in district 6. This was not the only basis for AHCA's proposed denial of St. Johns' CON.

   
   

5. St. Johns' expert witness, Gene Nelson, conceded that the data which were input to the fixed need pool calculations were correctly applied without calculation errors or other errors. Mr. Nelson also agreed that the agency's reliance on population data from the Executive Office of the Governor was neither inappropriate nor inaccurate. St. Johns' challenge to the published fixed need pool is based on substantive criticism of the rule, itself, the same challenge that was presented successfully in the Principal Nursing case described above.

   
   

6. Gene Nelson calculated a need for 3.28, rather than zero agencies; and after subtracting the two agencies already approved for district 6, came up with a net need of 1.28 agencies. The only variation from rule 59C-1.031(3), F.A.C. in Gene Nelson's calculation was that he derived a cost-effective agency size of 19,000 by restricting the universe of home health agencies to non-hospital home health agencies in district 6, rather than statewide. If statewide data are employed, as called for in the rule, the cost-effective agency size is 88,000 visits, which when applied to a projected visit growth in district 6 of 62,349 visits, results in no net need for an additional agency.

   
   

7. Gene Nelson also criticized the rule's under-projection of visits and pointed out that actual visits in 1992 vastly exceeded the projected number of visits for 1994 in district 6, according to a later version of the report which underlies the agency's calculation of need.

   
   

8. The difficulty in projecting need for additional home health agencies is that any agency theoretically has an unlimited capacity. That is, simply by adding staff, an agency can expand to serve more and more patients. While there are no studies which support a certain ideal number of visits, AHCA has generally found that smaller agencies, with fewer visits, have a higher average cost per visit than those with more visits. However, the attempt to limit the number of agencies, thereby preserving the existing agencies' ability to expand to meet expanding need, is deemed anti-competitive by health planners. At the time of hearing, Medicare certified home health agencies were scheduled by statute to be deregulated, with no further CON review required, effective July 1, 1995.

   Non-rule Analysis of Need

   
   

9. St. Johns presented the deposition testimony of Ralph J. Nobo, M.D., an obstetrician and gynecologist from Bartow, Florida, who practices mostly in Polk and Hardee counties. Dr. Nobo recounted some anecdotes of his own difficulty from time to time in placing pregnant and postpartum patients in home health care agencies. He also related some second-hand and non-specific stories of similar difficulties experienced by a pediatrician colleague.

   
   

10. Dr. Nobo has little knowledge of the actual availability of home health agency services in his area, or of the location of those agencies' staff, as he relies on the hospital social worker to assist with referrals. It is unlikely that Dr. Nobo's or his colleague's patients would be eligible for Medicare (for ages 65 and over), the primary focus of St. Johns' proposed services.

    
    

11. There are twenty-three licensed, and two approved, Medicare certified home health agencies in district 6. The twenty-one agencies reporting in fiscal year 1991 reported a low of approximately 4500 visits, to a high of approximately 75,000 visits, for a total of 740,821 visits. There are four agencies based in Polk County, the proposed location for St. Johns. Any agency approved in district 6 is permitted to serve any county in that district. Eight of the twenty-one reporting agencies had less than the 19,000 visits determined by Gene Nelson to be a cost-effective size for agencies in district 6.

    
    

12. St. Johns proposes to serve HIV-infected persons, and its statement to that effect complies with the preferences in the district health plan and the state health plan. The evidence at hearing and in the application, however, does not specify that there is an unmet need for services to that population in the district. There are no specifics in the application as to the number or percentage of HIV patients that will be served by St. Johns, and whether other agencies are currently serving these patients. The tables and the pro forma in St. Johns' application do not specify the type of high technology services usually required by HIV-infected persons.

    
    

13. Medicaid and indigent patients comprise a relatively small percentage of patients served by Medicare-certified home health agencies. These patients are commonly served by agencies which do not require a CON, and even though St. Johns is willing to commit to 1.5 percent Medicaid and 1 percent indigent care visits, that commitment is not shown to be a disproportionate share of Medicaid and indigent patients as compared with other Medicare-certified agencies. There is no evidence that these patients are underserved in district 6, or if they are, that St. Johns will pick up a disproportionate share.

    
    

14. High technology services are also given a preference in the district and state health plans. St. Johns has made blanket assurances that those services will be provided, but fails to describe the specifics. That is, ventilator services, IV therapy, chemotherapy, and like services are generally considered "high tech". They are not found in the pro forma nor tables of the application, and the special staff required to administer these services are not described in the staffing pattern in the application. Moreover, there is no discussion nor evidence that existing agencies are not already providing the same services proposed by St. Johns.

15. In summary, St. Johns has failed to affirmatively demonstrate that a new Medicare-certified home health agency is needed in district 6, either through a reasonable numerical analysis or through an analysis of the unmet needs of any targeted population.

    
    

    Quality of Care

    
    

16. St. Johns has adopted and implements a detailed quality assurance program which includes audits, random sampling, extensive reporting procedures, chart and procedure reviews, continuing education for staff, and discipline of staff who violate the standards of care or the appropriate agency procedures.

    
    

17. AHCA's concern with regard to the quality of care to be provided by St. Johns is based on CON staff review of Medicare survey documents from AHCA's Office of Licensure and Certification. Federally-trained staff of AHCA perform the surveys of service providers pursuant to contract with, and on behalf of, the federal Health Care Financing Administration (HCFA).

    
    

18. The survey files related to St. Johns' existing agencies in south Florida reflect a series of deficiencies and plans of correction in 1992 and 1993. In February 1993, St. Johns' Broward county agency was recommended for certification termination. Out of the state's approximate 300 home health agencies only three or four are recommended for termination each year; thus, standing alone, St. Johns' survey record was appropriate cause for concern by the CON review staff.

    
    

19. However, at hearing St. Johns presented competent evidence that its deficiencies were in, most cases, promptly corrected and both parties' witnesses agreed that a May 1993 resurvey by AHCA found all deficiencies were corrected. The recently approved St. Johns agency in Hernando County had no deficiencies found in its initial survey.

    
    

20. It is not unusual for a home health agency to be cited for regulatory deficiencies during a survey. The survey documents alone are not evidence of poor quality of care. The two agencies operated by St. Johns in South Florida provide over a million visits a year. Occasional glitches in recordkeeping and even occasional staff errors in judgement can reasonably be expected with that high volume.

    
    

21. There is no evidence that in its ten years of operation St. Johns has been the subject of license discipline for any reason. In spite of AHCA's justified "concern", the gravity of the survey deficiencies was not so great as to result in a moratorium on new patients or other administrative action. St. Johns effectively, with competent evidence, countered AHCA's quality of care concerns and has demonstrated it meets CON criteria related to the quality of care.

    
    

    Financial Feasibility

    
    

22. As required, St. Johns' application for CON includes its two most recent audited financial statements. These are styled "Statement of Financial Condition", and are dated June 30, 1991, and June 30, 1992. These documents were prepared by Warren Silverman, a certified public accountant (CPA) with over

    30 years' experience in health care finance, including specialized experience in Medicare reimbursement. Mr. Silverman testified as an expert on behalf of St. Johns at the hearing in this proceeding.

23. The above-referenced financial statements reflect significant operating losses and negative fund balances for both fiscal years 1991 and 1992. Audited financial statements for large home health agencies do not generally reflect year end losses. The fund balance in 1991 was (458,753); the excess of expenses over revenues that year was 554,603 (reflecting a loss). The fund balance in 1992, was (3,617,784), and excess of expenses over revenues was 610,706 (an even greater loss than the prior year). Most of the expenses relate to salaries and contract services for health care professionals. There are some very small "paper" expenses; for example, depreciation in 1991 and 1992 accounted for only $15,850 and $35,688, respectively. Also significant is the decline in the asset, "cash in bank", from $553,458 in 1991, to $148,618 in 1992. To the extent that most expenses have to be paid from somewhere, the "cash in bank" was a likely source. There is no evidence or other explanation of how St. Johns managed to keep operating with its losses through fiscal year 1992.

    
    

24. The financial statements, prepared by Mr. Silverman, and in his opinion representing an accurate statement of the financial status of St. Johns, belie his testimony at hearing that the Polk County project is financially feasible in the long and short term.

    
    

25. Mr. Silverman based that conclusion on what he considers to be a good probability that in the future outstanding claims by St. Johns for additional Medicare reimbursement related to past years will be resolved in St. Johns' favor. In Mr. Silverman's experience as St. Johns' CPA, St. Johns has historically received 92 percent to 98 percent of its past claims for additional reimbursement. The elaborate Medicare reimbursement scheme requires after-the- fact adjustments of reimbursements, which reimbursements are made by HCFA's fiscal intermediary based on anticipated costs. The reimbursement scheme does not allow for a "profit", or payments in excess of detailed allowable costs.

    For any given fiscal year the provider agency and Medicare payor may have conflicting claims for reimbursement for under-compensation or for repayments of over-compensation. St. Johns has both; on one hand, it claims entitlement to additional reimbursement; on the other hand, there are claims against it for repayment of funds it has already received.

    
    

26. To the extent that St. Johns is ultimately able to prevail, it will be in good financial shape. If, however, some or all of the outstanding settlement issues are decided against St. Johns, it would suffer a reduction in cash flow; its pension plan and ability to provide quality care could be adversely affected.

    
    

27. As a highly competent CPA, Mr. Silverman could have reflected a positive outcome of the Medicare settlement negotiations or litigation on the financial statements if he could have determined that positive outcome with reasonable certainty. He could not make that requisite determination, and therefore did not "book" those possible revenues. The financial statements are his best judgement of the financial status of this client.

    
    

28. St. Johns has failed to demonstrate the availability of financial resources to support the proposed project, and its immediate and long term financial feasibility.

    CONCLUSIONS OF LAW

    
    

29. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding pursuant to sections 120.57(1) and 408.039(5), Florida Statutes.

    
    

30. St. Johns has the burden of establishing its entitlement to a CON for a Medicare certified home health agency in District 6. Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 348 So2d 349 (Fla. 1st DCA 1977). A CON application is evaluated according to the statutory criteria in section 408.035, Florida Statutes, and valid rules properly promulgated thereunder. A balanced consideration of applicable statutory and rule criteria must be made. Humana, Inc. v Department of Health and Rehabilitative Services, 469 So2d 889 (Fla. 1st DCA 1985). The weight to be given each criteria is not fixed, but varies depending on the facts of each case. Collier Medical Center, Inc., v Department of Health and Rehabilitative Services, 462 So2d 83 (Fla. 1st DCA 1985); Northridge General Hospital v NME Hospitals, 478 So2d 1138 (Fla. 1st DCA 1985); ABC Home Health Services v Department of Health and Rehabilitative Services, 12 F.A.L.R. 5009 (Dept. of Health and Rehabilitative Services 1990).

    
    

31. A formal administrative hearing is a de novo proceeding in which the hearing officer independently evaluates the evidence presented. Florida Department of Transportation v J.W.C. Co., Inc., 396 So2d 778 (Fla. 1st DCA 1981). Further, AHCA's preliminary decision to deny St. Johns' CON application is not clothed with a presumption of correctness. The formal administrative hearing is intended to formulate final agency action and not simply review action already taken by an agency. J.W.C., 396 So2d at 789; Mariott Retirement Communities, Inc., v Department of Health and Rehabilitative Services, 14

    F.A.L.R. 2673, 2706 (Dept. of Health and Rehabilitative Services 1992). The issue, therefore, is whether St. Johns has proven by a preponderance of the evidence that its CON application satisfies the applicable statutory and rule review criteria. Upon a review of the evidence, it is concluded that St. Johns has not met its burden of proving entitlement to award of a CON.

    
    

32. The issues presented by the parties for determination in this proceeding are whether St. Johns has demonstrated the need for a new Medicare certified home health agency, whether St. Johns has demonstrated that the proposed project is financially feasible in the short term and the long term, and whether St. Johns has demonstrated the ability to provide quality of care.

    
    

33. St. Johns presented no evidence to support its allegations regarding miscalculations, erroneous data or other inaccuracies in the fixed need pool projection. It relies instead on the invalidity of rule 59C-1.031, F.A.C. as determined by Hearing Officer Cleavinger in Principal Nursing Services v. Agency for Health Care Administration, DOAH No. 93-5711RX (Final Order entered 1/26/94). That final order has been stayed by the agency's appeal to the First District Court of Appeal. Rule 9.310(b)(2), Florida Rules of Appellate Procedure. The agency properly applied the rule and derived a zero net need for district 6. The rule is valid until the appellate court upholds the hearing officer's order. Board of Optometry v. Society of Opthalmology, 538 So2d 878, 889 (Fla. 1st DCA 1988).

34. With or without a valid need methodology rule, St. Johns must still prove need pursuant to the statutory review criteria in subsections 408.035(1)(a) and (b), F.S. (1993). There are existing Medicare-certified home health agencies in the district which, even applying St. Johns' expert's methodology, are under-utilized. The evidence presented by St. Johns to support its argument that another agency is needed was unpersuasive.

    
    

35. St. Johns did prove that it is, and can continue to be, capable of providing quality of care to its patients. As a very large agency providing services for ten years in South Florida, St. Johns' record is not unblemished. However, the survey documents, standing alone, when no discipline or termination action has been taken on those surveys, are insufficient to outweigh the credible, competent testimony of St. Johns' nurse supervisor.

    
    

36. Quality of care still can be compromised by a lack of adequate financial resources, particularly in the highly labor-intensive home health field. Sufficient ongoing operating funds are essential. St. Johns has operated at a loss for the last two reported fiscal years and its cash on hand, as reflected in its financial statements, is becoming depleted. An optimistic anticipation of relief though favorable Medicare settlement does not vitiate the bottom line drawn by St. Johns' expert accountant.

    
    

37. St. Johns otherwise proved its compliance with statutory review criteria and with relevant state and local plan preferences. On balance, and under the circumstances presented in this case, the affirmative findings are eclipsed by the negative findings relating to need and financial feasibility.

RECOMMENDATION

Based on the foregoing, it is, hereby, RECOMMENDED:

That a final order be entered denying St. Johns' petition regarding fixed need pool invalidity, and denying St. Johns' application for CON #7209.

DONE AND RECOMMENDED this 28th day of April, 1994, in Tallahassee, Leon County, Florida.

MARY CLARK

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 28th day of April, 1994.

APPENDIX TO RECOMMENDED ORDER, CASE NOS. 93-1636 AND 93-4876

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

Petitioner's Proposed Findings

1.-9. Addressed in preliminary statement.

1. Adopted in paragraph 3.

2. Adopted as a statement of St. Johns' position only in paragraph 5.

3. Rejected as argument, except for the proposition that, without the rule, St. Johns must still demonstrate need.

13.-15. Rejected as unnecessary.

16. Rejected as contrary to the weight of evidence. 17.-18. Rejected as description of testimony rather than

findings of fact.

19. Rejected as unsupported by the greater weight of evidence.

20.-29. Rejected as unnecessary.

30. Adopted in substance in paragraph 16. 31.-32. Rejected as unnecessary.

1. Adopted in substance in paragraph 11.

2. Rejected as unnecessary.

35.-37. Rejected as description of testimony.

1. Rejected as a conclusion unsupported by the weight of competent evidence.

2. Adopted in summary in paragraph 20.

3. Adopted in paragraph 16.

4. Rejected as unnecessary.

42.-51. Adopted in substance in paragraphs 18.-21.

1. Adopted in paragraph 22.

2. Adopted in substance in paragraph 24, as a statement of Silverman's opinion.

3. Rejected as unnecessary.

4. Adopted in part in paragraph 25; otherwise rejected as unnecessary.

5. Rejected as unnecessary.

57.-58. Adopted as a statement of Silverman's testimony in paragraph 25.

59.-62. Rejected as unnecessary.

1. Rejected as unsupported by the weight of evidence.

   
   

   Respondent's Proposed Findings

   
   

   1. Addressed in preliminary statement. 2.-5. Rejected as unnecessary.

6.-9. Adopted in paragraph 5.

10. Adopted in paragraph 3. 11.-13. Rejected as unnecessary.

1. Adopted in substance in paragraph 12.

2. Adopted in substance in paragraph 14.

3. Adopted in substance in paragraph 13. 17.-18. Rejected as unnecessary.

1. Adopted in substance in paragraph 14.

2. Adopted in substance in paragraph 15.

3. Adopted in substance in paragraph 10.

4. Rejected as unnecessary.

5. Adopted in substance in paragraph 17. 24.-25. Rejected as unnecessary.

26. Adopted in paragraph 18.

27.-30. Rejected as unnecessary, except as adopted in paragraph

17 as a statement of AHCA's concern.

31. Adopted in summary in paragraph 11. 32.-33. Rejected as unnecessary.

1. Adopted in paragraphs 23.-28.

2. Rejected as unnecessary.

3. Adopted in paragraph 13.

4. Adopted in conclusion of law #37.

COPIES FURNISHED:

R. Terry Rigsby, Esquire Geoffrey Smith, Esquire Blank, Rigsby, & Meenan

204 South Monroe Street Tallahassee, Florida 32301

J. Robert Griffin, Esquire

Agency for Health Care Administration Suite 301 - The Atrium Building

325 John Knox Road Tallahassee, Florida 32303

Sam Power, Agency Clerk

Agency for Health Care Administration Suite 301 - The Atrium Building

325 John Knox Road Tallahassee, Florida 32303

Harold D. Lewis, Esquire

Agency for Health Care Administration Suite 301 - The Atrium Building

325 John Knox Road Tallahassee, Florida 32303

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

ST. JOHNS HOME HEALTH AGENCY, INC.,

CASE NO.: 93-1636

Petitioner, CASE NO.: 93-4876 CON NO.: 7209

vs. RENDITION NO.: AHCA-94-103-POF-CON

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondent.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above- styled case submitted a Recommended Order to the Agency for Health Care Administration (AHCA) . The Recommended Order entered April 28, 1994, by Hearing Officer Mary Clark is incorporated by reference.

RULING ON EXCEPTIONS FILED BY ST. JOHNS

St. Johns excepts to the Hearing Officer's findings on the issue of need because AHCA has decided=9* not to challenge the conclusion that the numeric methodology in Section 59C-1.031(3), F.A.C. is invalid. 1/ The exception is granted only to the extent that lack of need under the rule formula is not weighed against St. Johns' application in this Final Order. The Hearing Officer made an extensive non-rule analysis of need (paragraph 9 through 15) and concluded that St. Johns failed to establish need for its proposal either "...through a reasonable numerical analysis or through an analysis of the un-met needs of any targeted population." Eight of the twenty-one existing home health agencies do less than the cost-effective level of visits even under St. Johns' analysis. See paragraphs 11 and 34. The Hearing Officer's findings on non-rule need are accepted.

St. Johns excepts to the finding that St. John failed to establish financial feasibility. The Hearing Officer rejected the optimistic opinion of St. Johns' accountant because it was inconsistent with financial statements prepared by the same accountant and because the opinion assumed that St. Johns would prevail in pending reimbursement and overpayment disputes with the federal government. The agency has no authority to reweigh the evidence; therefore, the exceptions are denied. Department of Business and Professional Regulation vs.

Patrict J. McCarthy, 1st DCA opinion of June 1, 1994, Case Number 93-1534.

FINDINGS OF FACT

The agency hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except as modified by the rulings on the exceptions.

CONCLUSIONS OF LAW

The agency hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except as modified by the rulings on the exceptions. Except for the calculation of need under Section 59C-1.031(3), F.A.C., I have considered the St. Johns' proposal for another home health agency in District 6 in light of all the applicable review criteria. St. Johns failed to establish need and financial feasibility. Even under St. Johns' analysis, eight of the existing twenty-one providers in the district are underutilized.

See paragraphs 11 and 34. On balance, I conclude that St. Johns' application for a CON should be denied.

Based upon the foregoing, it is

ADJUDGED, that the application of St. Johns Home Health Agency, Incorporated, for CON 7209 be DENIED.

DOME and ORDERED this 29th day of in Tallahassee, Florida.

Douglas M. Cook, Director Agency for Health Care

Administration

ENDNOTE

1/ See Principal Nursing vs. AHCA, Case Number 93-5711RX (DOAH 1/2/94)

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILTNG ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WTTH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

COPIES FUNRSIHED TO:

Mary Clark, Hearing Officer The DeSoto Building

1230 Apalachee Parkwy

Tallahassee, Florida 32399-1550

R. Terry Rigsby, Esquire BLANK, RIGSBY & MEENAN, P. A.

204 South Monroe Street Tallahassee, Florida 32302

J. Robert Griffin, Esquire Senior Attorney, Agency for Health Care Administration

325 John Knox Road

Atriuin Building, Suite 301 Tallahassee, Florida 32303-4131

Elizabeth Dudek (AHCA/CON) Alberta Granger (AHCA/CON) Elfie Stamm (AHCA/CON)

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above nained addresses by U.S. Mail this 1st day of July, 1994.

R.S. Power, Agency Clerk State of Florida, Agency for Health Care Administration

325 John Knox Road

The Atrium Building, Suite 301 Tallahassee, Florida 32303

(904)922-3808

Docket for Case No: 93-001636CON

Orders for Case No: 93-001636CON