STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CLEARWATER LAND COMPANY, d/b/a ) REGENCY OAKS NURSING CENTER, )

)

Petitioner, )

)

vs. ) CASE NO. 94-2404

)

AGENCY FOR HEALTH CARE ) ADMINISTRATION, BEVERLY SAVANA ) CAY MANOR, INC., )

)

Respondent. )

) BEVERLY SAVANA CAY MANOR, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-2974

)

AGENCY FOR HEALTH CARE ) ADMINISTRATION, and CLEARWATER ) LAND COMPANY, d/b/a REGENCY OAKS ) NURSING CENTER, )

)

Respondents. )

)

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 consolidated cases on December 7, 8, 14, 15 and 19, 1994, in Tallahassee, Florida.

APPEARANCES

For Petitioner, Robert Griffin, Esquire Clearwater Land Charles A. Stampelos, Esquire

Co.: MCFARLAIN, WILEY, CASSEDY & JONES, P.A.

215 S. Monroe Street, Suite 600 Tallahassee, Florida 32301

For Petitioner, Douglas L. Mannheimer, Esquire Beverly Savana Michael Manthei, Esquire

Cay Manor, Inc.: BROAD & CASSEL

215 South Monroe Street, Suite 400 Tallahassee, Florida 32302

For Respondent, Samuel D. Bunton, Esquire

Agency For Health Agency For Health Care Administration Care The Atrium Building, Suite 301 Administration: 325 John Knox Road

Tallahassee, Florida 32303 STATEMENT OF THE ISSUES

The issue for resolution is which of two competing certificate of need applications should be approved for nursing home beds in District 5, subdistrict 2, Pinellas County, Florida.

PRELIMINARY STATEMENT

The Agency For Health Care Administration (AHCA) published a fixed need for nursing home beds for Pinellas County for the batching cycle at issue. The fixed need was not challenged. After review of eighteen applications, AHCA approved Beverly's CON application #7508, seeking 66 beds from the fixed need pool, and five other applications for 13 beds each (CON Nos. 7510, 7513P, 7517, 7518 and 7521P). The remaining applications, including that of Clearwater Land Company, were denied. Petitions challenging these actions were voluntarily dismissed prior to hearing, with the exception of the petitions in the above- styled consolidated cases. This left two applicants, one preliminarily approved and the other preliminarily denied, competing for 68 beds remaining in the fixed need pool. AHCA disposed of the unchallenged actions in a final order entered on December 16, 1994 (DOAH Case Nos. 94-2405, 94-2406, 94-2407, 94-2408 and 94-

2973).

At the final hearing, Clearwater Land Company presented these witnesses: Neil Ezell, Stewart Sandler, M.D., Irene Rich, R.N., Mark Richardson, Richard Knapp and Bo Russ. These Clearwater Land Company exhibits were received in evidence: Nos. 1 - 6 and 8 - 11.

Beverly presented these witnesses: James R. Pietrzak, Skyler Hollingsworth, Gene Clarke, Scott Tabakin, John R. Fletcher, Marie Cowart, Cheryl Kelsch, Kelly Gill and Armand Balsano. Beverly's exhibits received in evidence were: Nos. 1 - 13, 15 - 25, 27, 27a, 27b, 28a, 29a, 32 and 33.

AHCA presented neither witnesses nor exhibits, but adopted the evidence presented by Beverly.

The transcript of hearing was filed on March 1, 1995. As agreed by the parties, proposed recommended orders were filed on April 14, 1995. Beverly also filed a supplemental memorandum of law. AHCA joined in Beverly's proposed recommended order and memorandum.

The findings of fact proposed by the parties are addressed in the attached appendix.

FINDINGS OF FACT

The Parties

1. The Agency For Health Care Administration (AHCA) is responsible for administration of the certificate of need (CON) program pursuant to section 408.034, Florida Statutes.

2. Clearwater Land Company (CLC) is a Florida corporation which owns, operates, and is the license holder of the Regency Oaks Continuing Care Retirement Community (Retirement Community) and Regency Oaks Nursing Center (Regency Oaks) located in Clearwater, Florida. The Johnson Ezell Corporation is a closely held private corporation owned by two shareholders who are also shareholders of CLC. Johnson Ezell provides management, financial services, data processing services, collective purchasing, and other aspects of management for CLC.

   
   

3. CLC and Johnson Ezell Corporation are affiliates; two shareholders of Johnson Ezell comprise two out of the four shareholders of CLC. Johnson Ezell is also the contract manager of CLC.

   
   

4. Three of the four shareholders of CLC own 100 percent of two other large continuing care retirement communities (CCRC) in Florida. One of these communities, located in Port Charlotte, is known as South Port Square. A second retirement community, Lake Port Square, is in the mid-development stage in Leesburg, Lake County, Florida. Typically, CCRCs offer a broad spectrum of services or a continuum of care ranging from independent living apartments, to assisted living, to skilled nursing which often includes home health care.

   
   

5. South Port Square has 440 independent living apartments in which the holders of continuing care agreements reside. South Port also has a 120-bed community skilled nursing facility, originally CON approved in 1984. There are

   140 additional units of assisted living. The first phase of the 240 independent living units opened in October of 1987, and the second and final phase of 200 continuing care apartments opened in October of 1990. Lake Port Square currently has 200 continuing care apartments with 205 additional apartments currently under construction. Lake Port also has a 60-bed skilled nursing facility which was originally licensed as a sheltered nursing home facility. It is now a licensed community nursing home. Lake Port also has 35 units of assisted living.

   
   

6. Beverly Savana Cay Manor, Inc., is a wholly-owned subsidiary of Beverly Enterprises-Florida, Inc., which is a wholly owned subsidiary of Beverly Enterprises, Inc. The Beverly family of companies operates 838 nursing homes in

   48 states. It is the largest provider of long-term care services in the country. Beverly Savana Cay Manor will receive substantial financial, managerial, operational and program support from Beverly Enterprises Florida's regional office.

   
   

7. These are specific services which will be available to Beverly's proposed project from its parent's Florida regional office: A nurse consultant who is a former director of nursing will monitor the overall performance of the nursing staff and will assist in maintaining quality assurance and proper staffing patterns; a registered dietician will provide consulting dietary services; and a financial consultant will monitor and assist with the orientation of staff on all financial matters, including implementation of the billing system for Medicare and Medicaid. An area manager who is a licensed nursing home administrator will coordinate the support services.

   
   

8. Other consulting services available through the Florida regional office include: an activities consultant, a trained social services consultant, a rehabilitation program coordinator, a rehabilitation clinical coordinator, an accounting-finance department, and a quality assurance department that conducts inspections and reviews the facility's compliance with governmental requirements. The regional maintenance department will oversee the care and

   maintenance of the physical plant. The regional purchasing department coordinates purchases of food, chemicals, and other items more economically purchased in large volumes. The human resources department assists in the implementation of uniform personnel and wage policies, the training of supervisory and managerial personnel, and the monitoring of facility participation in government programs.

   
   

   CLC Project: Regency Oaks

   
   

9. CLC filed two CON applications: In CON Application No. 7503 (now withdrawn), it requested approval of a new 120-bed community nursing home through the conversion of 60 sheltered nursing home beds and the addition of 60 community nursing home beds. CLC also filed CON Application No. 7503P, the subject of this de novo review, to convert Regency Oaks Nursing Center's 60 sheltered nursing home beds to 60 community nursing home beds. CLC's project calls for a reclassification of existing services and assets. There is no capital required, no renovation costs, and no new equipment. The project basically involves moving from one state classification category to another, i.e., sheltered nursing home beds to community nursing home beds.

   
   

10. The project under consideration involves Regency Oaks Nursing Center, a 60-bed facility which commenced operations and was licensed in August of 1991. Regency Oaks is a part of a 40-acre campus. The Regency Oaks Retirement Community has approximately 200 units located in a separate five-story structure which also commenced operations in August or September of 1991. There are an additional 201 independent living units in a separate phase that is also located in a separate five-story structure on the campus that is currently under construction. When fully developed, the retirement community's independent living units will be roughly equivalent in size and substantially the same as the operations at its sister communities at Lake Port and South Port.

    
    

11. Sheltered nursing home beds are often located in a CCRC. A continuing care provider is authorized to provide a certain number of sheltered nursing home beds based upon the number of independent living apartments that are being constructed, operated and licensed pursuant to Chapter 651, Florida Statutes. Chapter 651 first authorized CCRC's to apply for and receive sheltered nursing home beds in 1986.

    
    

12. A CCRC is regulated by statute and markets and provides services pursuant to a continuing care agreement in which the continuing care resident is provided with shelter, food, and some element of health care in exchange for a specified lump sum payment of money and the payment of a monthly maintenance or service fee. The business was largely unregulated until major revisions were incorporated into Chapter 651. Pursuant to section 651.118(4), Florida Statutes, Regency Oaks originally applied for and was granted a CON to construct a 60-bed sheltered nursing home based upon the ratio of one sheltered nursing home bed for every four residential units in the retirement community. The prevailing wisdom in the early 1980's, when Chapter 651 was enacted, held that the 1:4 ratio was appropriate. The underlying assumption was the utilization of the sheltered nursing homes by the residents in the retirement community on a 1:4 ratio should result in a fully occupied and financially feasible nursing center. The ratio also ensured that residents could gain access to nursing home care. In the last half of the 1980's the prevailing wisdom held that the 1:4 ratio was still appropriate but only after allowing for several years of "aging in place" by the residents of the retirement community. To provide needed occupancy during the initial years of operation, subsection 651.118(7) allows the sheltered nursing home to admit residents from outside the resident

    community for a period of up to five years from the date of the issuance of the original license. For the first five years of operation, the nursing home beds are available to residents and nonresidents of the senior living community.

    However, at the end of the five year period, the nursing home is not allowed to accept any additional patients from outside the senior living facility because residents alone are expected to need the beds. In 1986, CLC had no intention of converting its CON approved beds to community nursing home beds.

    
    

13. For several reasons, including the general health of retirement community residents and their willingness to pay for home health services in order to stay in their own apartment, the 1:4 ratio is no longer a reasonable projection of sheltered nursing home bed need.

    
    

14. In the last two years at Regency Oaks, there was an average daily census of 3.5 to 5 patients in Regency Oaks originating from the independent living facility. Of the 200 units, an average daily census of 5 patients converts to a 1:40 ratio rather than the 1:4 ratio that was included in the sheltered bed model. Currently over 90 percent of Regency Oaks' patient days are patients who do not live in the senior housing facility.

    
    

15. Without the approval of this project, by September 1996, Regency Oaks will no longer be able to admit outside community residents. Based upon current and projected ratios, this will have an impact on the ability of Regency Oaks to continue to operate in an economical and financially feasible manner. CLC's experience at South Port Square illustrates this problem. The first phase of South Port's independent living apartments has been in operation for 7.5 years. Phase Two has been in operation more than 4.5 years. The demographics of the population area served by Regency Oaks and South Port are almost identical. The South Port community has had 7.5 years to "age in place." For the first ten months of South Port's 1994 fiscal year, 27 percent of the patient days of the South Port's 120-bed skilled nursing center were attributable to contractual requirements of residents of the independent living apartments. Twenty-three percent of the patient days were attributable to campus residents (non- contractual) who were either private pay or some other source of payment. At the top end of the scale, Regency Oaks expects to experience between 25 percent to 30 percent, and up to 40 percent, of its admissions from independent living apartments on campus.

    
    

16. CLC does not intend to apply for new sheltered nursing home beds to complement the additional 201 independent living units now under construction. According to its qualified health care planning expert, Mark Richardson, at full build-out, CLC will need to hold (at the high end of the range) 30 beds to fulfill its contractual obligations to its life care residents. (Transcript, pp. 332-3) At full build-out, the approximately 400 independent living units will house 550 to 600 residents, all eligible for nursing home care, when needed, under their continuing care agreements.

    
    

    Beverly's Project: New Crown

    
    

17. Beverly proposes a new, 120-bed community nursing home in the Seminole Park area of Pinellas County (New Crown) using 66 beds from the fixed need pool and 54 beds made available from the delicensure of its existing Crown Nursing Center (Old Crown). Granted by CON No. 7505, Old Crown originally was constructed as a motel in the 1940's and has been a nursing home since the 1960's. Although Old Crown currently holds a superior license, the facility is outmoded and is reaching the end of its useful life as a nursing home.

18. There is no room to expand or renovate the existing physical plant, and it is perpetually in need of costly repairs. It is not in compliance with modern building codes and is allowed to continue to operate only by virtue of grandfather clauses. Resident rooms are undersized, and corridors are only 5.5 feet wide rather than the 8 feet currently required. Room doors are narrower than those required in new facilities and will not accommodate moveable beds. Bathroom doors will not accommodate wheelchairs, and there is no central air conditioning.

    
    

19. The floor plan also is inconsistent with modern nursing home standards. The building is multistory with outside stairs. This configuration is highly undesirable because it restricts the freedom of movement of residents who are physically impaired, makes it difficult to monitor resident movement, requires extra nursing stations, and slows evacuation in an emergency. Old Crown has one four-bed ward and eight three-bed wards. Space limitations at times require that men and women reside in the same ward. There is no room for specialized services such as adult day care, subacute services or separate Alzheimer's care. Nursing stations are undersized and medical/chemical supplies must be kept in an outdoor shed. Laundry space is inadequate, and linens must be stored outside and in hallways. One room serves as the employee break room, the uniform storage room and the beauty parlor. The kitchen is too small and there is inadequate food storage. The dining area is located in the old motel lobby. Outdoor activities must be conducted in the back parking lot and there is no outdoor ambulation/recreation space. There is only one small space for physical, occupational and speech therapy, requiring that therapies sometimes be administered in hallways or bedside. This arrangement is particularly undesirable for residents receiving speech therapy, as they tend to be self- conscious about their inability to speak, eat and swallow. There is only one activities room, and it is located on the second floor. The second floor contains asbestos, and removal would require the evacuation of the entire second floor.

    
    

20. In contrast, New Crown will meet or exceed all existing licensure requirements for construction and safety codes. It will contain 53,310 square feet of space on a single story, and is designed to optimize operational efficiency, minimize institutional effects, and emphasize a home-like atmosphere. All areas within the facility will meet federal guidelines for handicapped accessibility and use. Corridors will be 8 feet wide, and the doors to resident rooms will accommodate moveable beds. These features will eliminate the movement, monitoring and safety shortcomings inherent in Old Crown's two- story motel floor plan. There will be plenty of storage, a modern kitchen and laundry facility.

    
    

21. Residents at New Crown will reside only in private and double occupancy semi-private rooms. Each room will feature private toilets, telephone, cable T.V., and individual thermostat controls. Homelike furnishings will be used throughout the facility. There will be two large day rooms adjacent to the nursing stations with access to three enclosed outdoor courtyards, a large restaurant-like dining area, a secured patio and an activity room. The day rooms will have aquariums, large screen televisions and VCRs. A large solarium/greenhouse will be located adjacent to the dining area.

    
    

22. AHCA's approval of Beverly's application for New Crown is expressly contingent on the approval of expedited CON application 7505 to delicense Old Crown. This CON has been granted. Beverly will not allow operation of the two facilities to overlap. Old Crown will remain fully operational until New Crown is operational and placement is made for every Old Crown resident. Beverly will

    transfer Old Crown residents to New Crown, and will assist residents who choose not to move to New Crown in making whatever other arrangements the resident chooses. No resident will be "put out on the street."

    
    

    Compliance With The Local Health Plan

    
    

23. The Health Council of West Central Florida, Inc. has identified three preferences, the first of which is a preference to new nursing homes which commit to serve Medicaid patients in proportion to the average number of Medicaid residents in existing nursing homes in the "health service area." That relevant average (subdistrict) is 55.32 percent.

    
    

24. Beverly commits to 56 percent total Medicaid days for New Crown; Old Crown is at 59.24 percent; and other Beverly facilities have a high record of Medicaid services (nationally at 68.5 percent, and in Florida an average of 66 percent). CLC commits to 31.58 percent, which is a reasonable expectation since the Medicaid days will be generated primarily, if not exclusively, from patients drawn from the community at large and not from the independent living facility. CLC's Regency Oaks market is dominated by residents and potential residents from a narrow service area with higher financial resources than the southern end of Pinellas County.

    
    

25. The second allocation factor gives a preference to applicants who propose specialized services, including adult day care, to meet identified needs.

    
    

26. Beverly has conditioned its application on the provision of a wide range of specialized services. New Crown will provide distinct subacute care in a 20-bed Medicare certified subacute unit with four ventilator-dependent beds, and comprehensive rehabilitation in a 3,404 square foot physical therapy site with physical therapy gym, hydrotherapy area, "activities of daily living" room and outdoor ambulation court. It also will provide adult day care services in a 987-square foot Adult Day Care Center, Alzheimer's care in an 18-bed Alzheimer's wing that includes separate dining/activity areas and an enclosed courtyard, respite care services, care to individuals with mental disorders, care to individuals who are HIV+ or who have AIDS, and hospice care. Beverly also will make a $10,000 grant to Florida State University School of Nursing for research into gerontological issues in the nursing home environment and will make its facility available to nursing students for clinical rotations.

    
    

27. CLC proposes intensive rehabilitation services, respite care, subacute care, hospice care and care to mental health patients. Its current facility has not provided respite care and it does not propose a separate unit for Alzheimer's patients.

    
    

28. The third local health plan allocation factor gives preference to applicants who demonstrate an intent to serve HIV-infected patients. Both applicants commit to provide AIDS and HIV-positive health care. Beverly has documented its experience with these patients at its Old Crown and other facilities. CLC simply has stated that it does not discriminate in admissions of these patients; it also asserts that it has no idea which, if any, of its patients have been HIV-positive or AIDS patients since that information is not disclosed by the patient.

    Compliance With The State Health Plan

    
    

29. The State Health Plan contains twelve allocation factors. Factor 1 gives preference to applicants locating in areas within subdistricts with occupancy rates exceeding 90 percent. Pinellas County's occupancy rate of 90.23 percent qualifies both Beverly and CLC.

    
    

30. Allocation Factor 2 gives preference to applicants who propose to serve Medicaid residents at the subdistrict Medicaid average. Exceptions are considered for applicants who propose the development of multi-level care systems. The applicants' Medicaid commitments are addressed above in paragraphs

    23 and 24. The applicants' experts disagree on whether the Regency Oaks facility is truly "multi-level," as contemplated by the exception. The availability of different levels of care: independent living, assisted living and nursing home, on a single campus does represent a "multi-level" care system.

    
    

31. State Health Plan Allocation Factor 3 gives preference to applicants proposing specialized services to special needs residents, including AIDS and Alzheimer's residents and the mentally ill. Both applicants, as discussed in paragraphs 26-28, above, have described in detail their proposals for specialized services. Beverly's experience in the past and specific plans for discrete subacute, ventilator-dependent and Alzheimer's units lend credibility to its commitment to those specialized services. CLC's commitment is more general. Its proposed staffing is too low to provide the level of care proposed for New Crown's subacute unit, but its staffing would be increased as needed by the patient population. Regency Oaks has 12 Medicare certified skilled nursing beds in the general nursing home population. None can accommodate a ventilator- dependent patient.

    
    

32. Allocation 4 encourages a continuum of services, including adult day care and respite care. Both applicants propose to meet this requirement of the State Health Plan. Again, Beverly's commitment is evidenced by a specific description of discrete programs, while CLC's plans are more general. CLC contends that there is "insufficient demand" in the area to support adult day care; Beverly proposes a 987 square foot "Adult Day Care Center" with its own staff, staff office and storage, to accommodate up to 8 guests, 8 a.m. to 6 p.m., five days a week. Day care guests will have an individual care plan prepared by professional staff and will have access to the full facility and its recreational, therapeutic and social services. Beverly will implement a respite program at New Crown and has such programs at its other facilities. CLC offers respite care but has never had a respite care patient.

    
    

33. Allocation Factor 5 gives preference to applicants proposing facilities which provide maximum comfort and quality of care. Both applicants qualify for this preference with outstanding designs and programs.

    
    

34. Both applicants propose therapeutic programs consistent with Allocation Factor 6. Specialized rehabilitation, restorative care and normalizing training are described in both applications and are committed to by the applicants. Both propose a more aggressive, intensive rehabilitation than other nursing homes in the area.

    
    

35. The highest Medicaid per diem rate in Pinellas County is $100.74 (January, 1994). Inflated forward to 1996, the planning horizon, that rate becomes $113.00. New Crown's proposed rate of $100.14, and Regency Oaks' proposed rate of $102.75 (for 1995) do not exceed that highest rate (even when

    Regency Oaks' rate is inflated 5 percent for 1996). Both applicants are entitled to the preference in Allocation Factor 7.

    
    

36. Both applicants qualify for the preference under Allocation Factor 8, as both enjoy the highest (superior) rating. Three of Beverly's four facilities, including Old Crown, currently hold superior licenses, and the fourth has been recommended for a superior license. Regency Oaks was eligible for a superior license shortly after issuance of its original license and actually received the superior license, after some logistical mix-up, in December of 1994.

    
    

37. State Health Plan Allocation Factor 9 gives preference to applicants proposing staffing levels which exceed the minimum staffing standards contained in licensure administrative rules. As a well-run existing facility Regency Oaks maintains appropriate staffing levels. The staffing proposed in its application omits one certified nurse assistant (CNA) on the 11:00 to 7:00 shift. The director of nursing monitors the patient population to assure that staff is added when needed. Beverly's proposed staffing plainly meets or exceeds standards, including statutory and regulatory requirements at all levels.

    
    

38. Both Beverly and CLC use professionals from a variety of disciplines and both are entitled to the preference described in State Health Plan Allocation Factor 10. Likewise, both applications describe, and the applicants' experience bears out, a respect for residents' rights and privacy and a well- designed quality assurance and discharge planning program, as required in Allocation Factor 11.

    
    

39. State Health Plan Allocation Factor 12 gives preference to applicants proposing lower administrative costs and higher resident care costs than the average nursing home costs in the district. As conceded by Beverly's expert health care planner, both applicants meet this preference criteria; however, Beverly's proposed administrative costs are lower, and patient costs are higher, than CLC's.

    
    

    Need and the Availability of Alternatives

    
    

40. Nursing home occupancy rates in District V, subdistrict 2, Pinellas County, currently exceed 90 percent, and the need for 68 more nursing home beds in this district is undisputed.

    
    

41. Evidence in this proceeding also established the need for such specialized services as subacute care (sometimes referred to as "step down" care), adult day care, HIV/AIDS care, Alzheimer's care and mental health care.

    
    

42. Both applicants propose to meet a portion of the numerical need: Beverly with 66 new beds; and CLC with 60 beds converted from sheltered to community beds. Beverly's project more closely meets the numerical need; CLC concedes that some, and perhaps as many as 30, of its beds will be utilized by the residents of its independent living community.

    
    

43. Both applicants propose outstanding programs for subacute care and other specialized services. As discussed above, Beverly's actual experience lends greater credibility to its commitment.

    
    

44. Maintenance of the status quo in either case is not a viable alternative. Old Crown is only 54 beds; as of 1996, none of Regency Oaks'

    sheltered beds will be available for new community admissions. Without approval of one application or the other, the 68 bed need will remain wholly unmet.

    
    

    Availability of Resources,

    Including Staffing and Short-Term Funds

    
    

45. Regency Oaks maintains a recruitment and staff development program designed to attract pools of qualified applicants for each personnel vacancy which occurs at the facility. This program has been effective in the recruitment and retention of high quality nurses and other professionals. Regency Oaks also maintains effective staff training and competency enhancement programs. The facility has a solid core staff in place.

    
    

46. The parties have stipulated that Beverly will be able to hire the staff it needs at the proposed salaries and that Beverly's proposed recruitment plan career ladder, incentives and opportunities for advancement and efforts to recruit disciplines in short supply are reasonable and capable of being accomplished by the applicant. New Crown has the advantage of access to a statewide network of consultants who will draw from the expertise and resources of the Beverly companies.

    
    

47. Since Regency Oaks is already built and in place, very little additional financial resources are needed in the short-term. The incremental project costs of $22,000 filing fee and $15,000 in consulting fees have already been expended. Whether it is a "zero cost" project or whether its cost should include the construction of the facility in 1991 for $2,634,441, as suggested by Beverly, CLC has the financial resources for short-term support of the project.

    
    

48. Beverly likewise will be able to finance its total project cost of

    $6,361,751. Beverly's parent company has committed its substantial resources, including $80 million cash on hand, to finance the project.

    
    

49. An issue arose in this proceeding regarding Beverly's failure to include on Schedule 2 of its application three nursing home facilities which it acquired on January 13, 1994.

    
    

50. Two facilities, Old Crown and Beach Convalescent Center, were transferred to Beverly from its sister corporation, Petersen Health Care, Inc. The third facility, Clewiston Health Care Center, was transferred to Beverly from its "grandparent," Beverly California Corporation. Change of ownership applications addressing the transfers were filed with AHCA on October 15, 1993. CLC contends that these inter-company transfers involved expenditures that were "capital projects" within the meaning of section 408.037(2)(a), Florida Statutes, and therefore, Beverly should have included them on its Schedule 2.

    
    

51. CLC introduced a closing statement and two deeds from the Beach and Old Crown change of ownership files in an attempt to suggest that Beverly had purchased the facilities in exchange for cash payments. Beverly established, however, that it gave no value of any kind in exchange for the transfers, which were accomplished simply by changing the corporate name on each facility's general ledger. Beverly prepared the documents in question only after the AHCA indicated that it would not approve the change of ownership applications until it received closing statements and deeds.

    
    

52. No long-term debt was transferred, and each transferred facility had a positive asset value net of accumulated depreciation and amortization. Consequently, the transfers resulted in permanent additions to Beverly's equity

    (i.e. plant, property and equipment) valued at $3,882,033. Future Beverly audited financial statements will reflect the transfers as additions to paid-in capital. The operational assets of each facility far exceeded the operational liabilities (e.g. accounts payable) of each facility, and Beverly received net working capital in the total amount of $600,116.

    
    

53. For reimbursement purposes, the transfers were treated as "related party transfers" and did not result in any change in Medicare or Medicaid reimbursement rates. Beverly California Corporation paid all the incidental expenses associated with the transfers such as application and legal fees. Beverly would not capitalize these expenses.

    
    

54. Contrary to CLC's contention, Financial Accounting Standards Board (FASB) statements 11 and 14 do not require that these transfers be treated as "capital expenditures." FASB Statement 11 deals with accounting for contingencies, and does not offer any insight into the proper characterization of the intercompany transfers at issue here. FASB Statement 14 requires that financial statements of a business enterprise include information about its "segments," i.e., operations representing at least 10 percent of the company's total revenues. There is no evidence that Beverly is a "segment," nor does FASB

    14 define "expenditure" or "capital expenditure." FASB Statement 14 mentions capital expenditures only once. Paragraph 27 is titled "Other Related Disclosures." Paragraph 27(b) requires that "information for reportable segments shall be made as follows: . . . Disclosure shall be made of the amount of each reportable segment's capital expenditures, i.e., additions to its property, plant and equipment." (Transcript, pp. 623)

    
    

55. This passing reference does not define capital expenditures for all purposes, or require that all additions to plant property and equipment be characterized as capital expenditures. Paragraph 27(b) of FASB Statement 14 merely advises accountants that the financial statement of a company must disclose the capital expenditures --- as opposed to expense items --- that a reportable segment of the company has made. Read in context, the reference to additions to plant, property and equipment is meant only as an example of transactions that, under circumstances not defined in FASB 14, might involve a capital expenditure. In the universe of additions to plant property and equipment, some may involve capital expenditures. However, the transfers here at issue demonstrate that a company can obtain additions to plant, property and equipment without incurring any expenditure at all.

    
    

56. FASB Statement 6, at paragraph 66, provides that an increase in the equity of a business entity resulting from the transfer to it of something of value to obtain or increase an equity interest in the entity is considered an investment by owners, not an expenditure by the receiving entity. Health Care Financial Management Association Principles and Practices Board Statement No. 12 similarly would characterize the transfers at issue as equity investments by affiliated companies, not expenditures. This is the proper characterization of the transactions between Beverly and its affiliated companies. The equity contributions of its affiliated companies made Beverly a financially stronger and wealthier entity that was more capable of undertaking the proposed project, and did not involve an expenditure of any kind on the part of Beverly, and therefore cannot be characterized as "capital projects" according to credible, competent expert opinion.

    
    

57. AHCA's sample Schedule 2 form does not provide a place to list the receipt of equity, but rather asks only for "expenditures." Had Beverly incorrectly included the transfers as "expenditures" in its Schedule 2, it would

    have had to show them as negative expenditures, thereby reducing the total amount of reported capital projects and improving Beverly's reported financial position. Upon inquiry, AHCA properly advised Beverly that since the transfers did not involve any expenditures by the applicant, it should not disclose them.

    
    

    Accessibility To All Residents of the Service District

    
    

58. Regency Oaks has never turned away a Medicaid or other patient based on payor status and affirmatively accepts patients regardless of ability to pay. Regency Oaks also accepts AIDS/HIV patients, Alzheimer's and other specialty needs patients.

    
    

59. Beverly also has this type of "open door" policy. Its experience, however, as discussed above, has been more successful in attracting and serving Medicaid patients and patients with special needs.

    
    

60. As an integral part of a beautifully designed, upscale retirement community, Regency Oaks has not drawn the payor mix that Old Crown and its sister facilities have served. As the residents of the independent living units age in place and increase in number with completion of the additional units, accessibility to all residents of the service district is diminished, not enhanced, if the conversion from sheltered to community beds is approved for Regency Oaks.

    
    

    Long Term Financial Feasibility

    
    

61. Review of financial feasibility of Regency Oaks is simplified by the fact that it has actual operating experience to support its projections. Opened in Fall 1991, the nursing home, as typically expected, showed losses for the first few years. It turned a profit in 1993.

    
    

62. Regency Oaks has the necessary resources to continue to operate the continuing care apartments as well as the nursing home with net operating income, including net operating income from the completion and opening of the new 200 independent living units and further supplemented by the resources of the shareholders of CLC.

    
    

63. The four CLC shareholders are personal guarantors on the mortgage indebtedness of all the property at Regency Oaks. Their net worth is in excess of $60 million and cash reserve is greater than $10 million.

    
    

64. If the CON is approved and Regency Oaks is permitted to accept community bed patients it will be financially healthy. If, however, the facility is restricted in 1996 and the beds will be filled only from its continuing care units, the nursing home will become financially stressed. Neil Ezell, the corporate representative of CLC and chief financial officer for the Johnson Ezell Corporation, acknowledges the difficulty in making a profit in a smaller 60-bed nursing home because of the high fixed administrative costs.

    
    

65. If the high-end estimate that 30 beds will be filled from the continuing care facility is accurate, Regency Oaks will be operating at 50 percent capacity in 1996 or shortly thereafter. The contractual obligations to Regency Oaks residents would still be honored in some fashion, but with substantial difficulty.

66. Absent CON approval, Regency Oaks' cost per patient day will increase and will negatively impact Medicare since Medicare is a cost-based reimbursement system for skilled nursing facilities.

    
    

67. Beverly's proposal for a new 120-bed facility at New Crown is financially more efficient than either Regency Oaks or the existing 54-bed Old Crown facility, even considering the $6,361,751.00 total project cost. The old facility is too dated and too small to be efficiently operated much longer. The 120-bed proposal meets the need for new beds and effectively puts to rest the old well-used beds.

    
    

68. The patients at New Crown will come from the community at large and will also be transferred from the existing Crown facility. The projected utilization is reasonable and the projected pre-tax net income of approximately

    $299,000.00 at the end of the second year is likewise realistic. The proposal is financially feasible.

    
    

    SUMMARY OF FINDINGS AND BALANCING THE CRITERIA

    
    

69. Both applicants presented outstanding proposals. There is no question that they have provided, and will continue to provide, superior quality of care in attractive, well-equipped and well-staffed facilities. Beverly's proposal enjoys the financial "economies of scale" advantage of a larger facility; CLC's proposal is financially appealing because it requires little or no additional start-up expenditures.

    
    

70. Beverly effectively countered CLC's assertions that the application was defective for failure to include the three recently-acquired facilities as "capital expenditures". Beverly also appropriately addressed CLC's claim that it failed to consider the transfer of Old Crown residents in its projected utilization of beds at the new 120-bed facility.

    
    

71. Approval of Beverly's application for 120 beds will not result in approval of an excess of beds left in the fixed need pool. Approval is conditioned on approval of delicensure. The old and new facilities will not be concurrently licensed. It strains common sense to find that the concurrent approval and delicensure process should somehow result in creating a need in some future planning horizon, rather than the immediate planning horizon.

    
    

72. Both applicants avow their commitment to serve Medicaid and specialty needs population and to remain accessible to persons regardless of ability to pay. Beverly's commitment is underscored with an existing record of service and with its willingness to accept conditions of approval.

    
    

73. More troubling than the Medicaid and special needs accessibility issue, however, is the concern that CLC's existing 60-bed facility at Regency Oaks will, upon conversion, fall substantially short of meeting the need for 68 beds. Its continuing care community is expanding and the demand for nursing home beds by that population will increase. Somewhere between 10 and 30 beds will be filled, leaving only 30 to 50 beds available to the population at large.

    
    

74. CLC's financial dilemma is the result of a considered decision to build 60 sheltered nursing home beds to support a 200 unit continuing care facility. The only explanation in the record for exceeding the 1:4 ratio is that initially the plan was for 240 units. Even with 50, rather than 60 sheltered beds, the facility would have problems, since the prevailing wisdom based on actual utilization experience is that far fewer sheltered beds are

    needed. Although the anticipated financial dilemma will have some impact on Medicare reimbursement in the Regency Oaks' facility, there is no major health care planning impact from denial of the conversion. The impact is facility- specific and was at least partially foreseeable five years ago. That is, the statute, then as now, provided a fixed 5-year period for the use of sheltered care beds by the community at large.

    
    

75. Balancing of the criteria and weighing the evidence results in a finding that Beverly's, rather than CLC's, application should be approved.

    
    

    CONCLUSIONS OF LAW

    
    

76. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to sections 120.57(1), Florida Statutes and 408.039(5), Florida Statutes.

    
    

77. As applicants for a CON, CLC and Beverly bear the burden of establishing by competent substantial evidence their entitlement to approval for community nursing home beds in Pinellas County. Rainbow Community Hospital v. Department of Health and Rehabilitative Services, 453 So.2d 1200 (Fla. 1st DCA 1984). Specifically, they must meet the relevant criteria set forth in section 408.035, Florida Statutes, and Rule 59C-1.036, F.A.C., based on a balanced consideration of all matters enumerated therein. Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985); Department of Health and Rehabilitative Services v. Johnson & Johnson, 447 So.2d 361, 363 (Fla. 1st DCA 1984). The weight to be given to each criteria is not fixed, but varies depending on the facts of each case. North Ridge General Hospital v. NME Hospitals, 478 So.2d 1138 (Fla. 1st DCA 1985).

    
    

78. Prior to applicants submitting CON applications in this batch, the Agency established a fixed need pool for 133 additional community nursing home beds in District 5. By stipulation, the Agency approved five 13-bed CON applications, none of which were challenged by CLC and Beverly. As a result, the original published fixed need pool of community nursing home beds has been reduced from 133 to 68. This is consistent with Agency precedent. See Adventist Health Systems/Sunbelt, Inc., d/b/a East Pasco Medical Center v. State of Florida, Agency for Health Care Administration, 16 F.A.L.R. 4050 (AHCA Oct. 27, 1994).

    
    

79. CLC's and Beverly's applications are competing for those remaining 68 beds. There is no assertion that "not normal" circumstances support an award of more beds than are available in the fixed need pool. See generally, Humana, Inc. v. Dept. of Health and Rehabilitative Services, 492 So.2d 388, 392 (Fla. 4th DCA 1986).

    
    

80. CLC's proposed conversion of 60 sheltered beds is plainly within the

    68 bed limit. CLC suggests that approval of Beverly's application for 120 beds, including the delicensure of 54 beds at Old Crown and the addition of 66 new beds, violates established precedent.

    
    

81. Beverly Enterprises-Florida, Inc. v. Agency for Health Care Administration, 16 FACR 3964 (Final Order entered October 17, 1994) rejected the Hearing Officer's conclusion that beds may be approved in excess of the numeric need. This case, however, involved the award of beds in a geographically underserved area and the Final Order merely recited rule 59C-1.036(2)(g), F.A.C., which provides that even in underserved areas an applicant must meet the established bed need criteria.

82. Closer on point is Central Florida Hospital v. Daytona Beach General Hospital, 475 So.2d 974 (Fla. 1st DCA 1985), involving a transfer of beds within the same subdistrict. This case supports the principle (followed by the Agency and its predecessor, HRS) that the use of existing beds within a subdistrict to accomplish a CON-reviewable project in the same subdistrict neither increases nor decreases the subdistrict bed inventory. In the absence of a rule or other specific prohibition, common sense and agency precedent support the notion that an applicant can combine its own to-be-delicensed beds with new beds from the fixed need pool in a single application.

    
    

83. A second threshold issue raised by CLC is whether Beverly's application properly listed all of its capital projects for an appropriate agency review of its financial feasibility. Beverly's application is complete and properly lists the applicant's projects "approved via authorization to execute" as of November 1, 1993. It should not have included in its capital projects listing the intercompany transfers of the Beach, Old Crown and Clewiston facilities. Section 408.037(2)(a), Florida Statutes requires that each CON application contain

    
    

    1. complete listing of all capital projects, including new health facility development proj- ects and health facility acquisitions applied for, pending, approved, or underway in any state at the time of application . . . .

       
       

       At the time Beverly filed its application, Rule 59C-1.008(5)(h), F.A.C. provided that

       
       

       [t]o comply with Section 408.037(2)(a), F.S. requiring a listing of all capital projects as defined in rule 59C-1.002(9), F.A.C., the applicant shall, consistent with the applicant's capitalization policies, provide the total approximate amount of capital projects approved via authorization to execute or underway at the time of the letter of intent deadline or state there are none.

       
       

       In turn, the version of Rule 59C-1.002(9), F.A.C. then in effect defined "capital project" as

       
       

       a project involving one or more expenditures which has received final approval via authorization to execute for which capitalization will be required under generally accepted accounting principles. (emphasis supplied).

       
       

       By adopting this definition, AHCA has made it clear that to be considered a "capital project" within the meaning of section 408.037(2)(a), a project first must involve an "expenditure approved via authorization to execute."

       
       

84. Beverly adequately established that the acquisition of the Beach, Old Crown and Clewiston facilities did not involve expenditures. Moreover, the cutoff date for capital projects reporting was the letter of intent deadline of November 1, 1993. As of that date, the applicant did not own the three facilities.

85. With the exception of CLC's less than average Medicaid services, both applicants substantially meet the statutory and regulatory criteria for approval. On balance, Beverly's application is preferred, as described in the findings of fact.

    
    

86. As a continuing care facility, Regency Oaks was entitled to approval of one shelter nursing home bed for every four proposed residential units. It was approved for 60 sheltered beds. Section 651.118, Florida Statutes (1994), provides, in pertinent part:

    
    

    651.118 Agency For Health Care Administration; certificates of need; sheltered beds; community beds.-

    1. The provisions of this section shall control in the case of conflict with the pro- visions of the Health Facility and Services Development Act, ss. 381.701-381.715; the provisions of chapter 395; or the provisions of parts II and III of chapter 400.

    2. The Agency For Health Care Administration shall issue a certificate of need to any holder of a provisional certificate of authority pursuant to s. 651.022 to construct nursing

       home beds for the exclusive use of the prospective residents of the proposed continuing care facility if the holder of the provisional certificate of authority meets the agency's applicable review criteria, utilizing the bed need provisions of subsection (4).

    3. Nursing home beds located within a continuing care facility for which a certificate of need is issued pursuant to subsection (2) shall be known as sheltered nursing home beds.

    4. The Agency For Health Care Administration shall approve one sheltered nursing home bed for every four proposed residential units, including those that are licensed under part III of chapter 400, in the continuing care facility unless the provider demonstrates the need for a lesser number of sheltered nursing home beds based on proposed utilization by prospective residents or demonstrates the need for additional sheltered nursing home beds based on actual utilization and demand by current residents.

    5. Construction on any sheltered nursing home beds shall not begin until the holder of the provisional certificate of authority has been issued a certificate of authority pursuant to s. 651.021 and a certificate of need from the Agency For Health Care Administration.

    6. Unless the provider already has a component which is to be a part of the continuing care facility and which is licensed pursuant to chapter 395, or part II or part III of chapter 400 at the time of construction of the continuing care facility, the provider shall construct the nonnursing home portion

       of the facility at the same time. If a provider construct less than the number of residential units approved in the certificate of authority, the number of licensed sheltered nursing home beds shall be reduced by a proportionate share.

    7. Notwithstanding the provisions of subsection (2), at the discretion of the continuing care provider, sheltered nursing home beds may be used for persons who are not residents of the facility,

       and who are not parties to a continuing care contract, for a period of up to 5 years from the date of issuance of the initial nursing home license.

    8. A provider may petition the Agency for Health Care Administration to use a designated number of sheltered nursing home beds to proved extended congregate care as defined in s. 400.402(11) if the beds are in a distinct area of the nursing home which can be adapted to meet the requirements for extended congregate care. The provider may subsequently use such beds as sheltered beds after notifying the agency of the intended change.

    9. This section shall not preclude a continuing care provider from applying to the Agency for Health Care Administration for a certificate of need for community nursing home beds or a combination of community and sheltered nursing home beds. Any nursing home bed located in a continuing care facility that is or has been issued for nonrestrictive use shall retain its

    legal status as a community nursing home bed unless the provider requests a change in status. Any nursing home bed located in a continuing care facility and not issued as a sheltered nursing home bed prior to 1979 shall be classified as a community bed. The Agency for Health Care Administration may require continuing care facilities to submit bed utilization reports for the purpose of determining community and sheltered nursing home bed inventories based on historical utilization by residents and nonresidents.

    * * *

    *NOTE: The Agency for Health Care Administration was substituted for DHRS in 1994. (see Chapter

    94-206, Laws of Florida)

    
    

87. CLC has a real dilemma. The statutory ratio is an overestimate of need, according to the applicant's experience in operating continuing care facilities. Whether that was foreseeable in 1991 is not a matter of record in this proceeding. Regency Oaks needs to continue to fill its nursing home beds from the community at large after the 5-year deadline in order to remain financially healthy. It cannot, however, effectively meet the need for 68 community nursing home beds in the 1996 planning horizon because of its continuing care contracts. As many as 30 beds will be required to satisfy that commitment. As an alternative to its conversion application, it may be possible for CLC to obtain an extension of the 5-year deadline based on its statutory entitlement to additional sheltered beds to complement the independent living

    units under construction. The extension would be in lieu of actually building new nursing home beds. Or it might invoke section 651.118(8), Florida Statutes.

    
    

88. Whether this or other viable alternatives exist for CLC, Beverly's proposal provides greater accessibility to "all residents of the service district," and should be awarded the CON.

RECOMMENDATION

Based on the foregoing it is hereby RECOMMENDED:

That the agency enter its Final Order denying Clearwater Land Company's application for CON #7503P and approving Beverly Savana Cay, Inc.'s application for CON #7508, conditioned upon 56 percent of patient days of care to Medicaid residents, and appropriate specific conditions for a ventilator-dependent unit, respite care, adult day care, Alzheimer's unit, and AIDS/HIV+ care.

DONE and ORDERED this 30th day of June, 1995, in Tallahassee, 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 30th day of June, 1995.

APPENDIX

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

Clearwater Land Company's Proposed Findings

1. and 2. Adopted in paragraph 2.

1. Adopted in paragraph 3.

2. and 5. Adopted in paragraph 4.

6. and 7. Adopted in paragraph 5.

1. Adopted in paragraph 9.

2. and 10. Rejected as unnecessary.

1. Adopted in paragraph 24.

2. Adopted in paragraph 9.

3. Adopted in paragraph 72.

4. Adopted in substance in paragraph 24.

5. Adopted in paragraph 10.

6. Adopted in paragraph 11.

7. - 19. Adopted in paragraph 12.

1. Adopted in substance in paragraph 13.

2. Adopted in substance in paragraph 14.

3. Rejected as unnecessary.

4. and 24. Adopted in paragraph 15.

1. Adopted in paragraph 64.

2. and 27. Adopted in substance in paragraph 13.

1. Covered in Preliminary Statement.

2. Covered in Conclusions of Law, paragraph 79.

3. and 31. Rejected as unnecessary.

1. Rejected as contrary to the evidence and law.

2. Rejected as contrary to the greater weight of evidence.

3. and 35. Adopted in substance in paragraphs 17 and 22.

1. Adopted in substance in paragraphs 23 and 24.

2. Adopted in substance in paragraph 27.

3. Adopted in substance in paragraph 28.

4. and 40. Adopted in paragraph 29.

1. Adopted in paragraph 30.

2. Adopted in paragraph 31.

3. Adopted in substance in paragraph 32.

4. Adopted in paragraph 33.

5. Adopted in paragraph 34.

6. Adopted in paragraph 35.

7. Adopted in paragraph 36.

8. Adopted in substance in paragraph 37.

9. and 50. Adopted in paragraph 38.

1. Adopted in paragraph 39.

2. - 55. Rejected as cumulative and unnecessary.

56. and 57. Adopted in substance in paragraphs 47 and 64.

58. and 59. Rejected as unnecessary.

1. Rejected as contrary to the weight of evidence.

2. Rejected, as to the comparative conclusion; otherwise accepted generally.

3. - 64. Rejected as unnecessary and cumulative.

1. Adopted in paragraph 62.

2. - 71. Rejected as unnecessary.

1. Adopted in substance in paragraph 64.

2. Adopted in substance in paragraph 64, except as to the impact if Beverly is approved. That finding is rejected as unsupported by the evidence.

3. and 75. Adopted generally in paragraphs 64 and 65.

1. Accepted, as to no impact on existing providers; rejected, as to impact by Beverly.

2. Adopted in paragraph 67 (as to Beverly's cost).

3. - 82. Rejected generally as contrary to the greater weight of evidence.

1. Adopted in paragraph 10.

2. - 86. Rejected as unnecessary.

1. Rejected as contrary to the greater weight of evidence.

2. - 94. Rejected as unnecessary or cumulative. Findings regarding the high quality of care and range of services are addressed above.

95. and 96. Adopted in part in paragraph 37; the one staffing omission was conceded by CLC's director of nursing.

97. - 99. Adopted in substance in paragraph 45.

100. - 117. Rejected as unnecessary or cumulative.

118. Addressed in Preliminary Statement.

Beverly's Proposed Findings

1. Addressed in Preliminary Statement.

2. and 3. Rejected as unnecessary.

1. Adopted in paragraph 17.

2. Adopted in paragraph 18.

3. and 7. Adopted in paragraph 19.

1. Adopted in paragraph 20.

2. Adopted in paragraph 21.

3. Adopted in paragraph 26.

4. Adopted in paragraph 22.

5. Adopted in substance in paragraphs 9 and 12.

6. Adopted in paragraph 6.

7. Adopted in paragraph 7.

8. Adopted in paragraph 8.

9. and 17. Rejected as unnecessary.

1. Adopted in summary in paragraph 70.

2. Adopted in paragraph 50.

3. Adopted in paragraph 51.

4. Adopted in paragraph 52.

5. Adopted in substance in paragraph 53, although the testimony was related to both Medicare and Medicaid reimbursement.

6. and 24. Adopted in paragraph 54.

1. Adopted in paragraph 55.

2. Adopted in paragraph 56.

3. Adopted in paragraph 57.

4. and 29. Rejected as unnecessary.

1. Adopted generally in paragraph 24.

2. Adopted generally in paragraph 26.

3. Adopted generally in paragraph 27.

4. Adopted generally in paragraph 28.

5. Rejected as unnecessary.

6. Adopted in paragraph 28.

7. Adopted in paragraph 29.

8. Adopted generally in paragraph 30, although "multi-level" was not defined, and CLC's assertion that it is a "multi-level" facility is generally accepted.

9. Adopted in paragraph 31.

10. - 64. Rejected as cumulative and unnecessary.

1. Rejected as to the characterization of CLC's rate; otherwise adopted in substance in paragraph 35.

2. Adopted in paragraph 36.

3. and 68. Rejected as cumulative and unnecessary.

69. and 70. Adopted in paragraph 38, except as to the conclusion that CLC does not meet the preference.

71. and 72. Adopted in part; rejected in part in paragraph 39.

1. Adopted in paragraphs 40 and 75.

2. - 100. Rejected as cumulative or unnecessary.

101. Adopted generally in paragraphs 72 and 73.

COPIES FURNISHED:

Robert Griffin, Esq. Charles A. Stampelos, Esq. MCFARLAIN, WILEY, CASSEDY

& JONES, P.A.

215 S. Monroe Street, Ste. 600 Tallahassee, FL 32301

Douglas L. Mannheimer, Esq. Michael Manthei, Esq.

BROAD & CASSEL

215 S. Monroe Street, Ste. 400 Tallahassee, FL 32302

Samuel D. Bunton, Esq. Agency for Health Care

Administration

The Atrium Building, Ste. 301

325 John Knox Road Tallahassee, FL 32303

Douglas M. Cook, Director Agency for Health Care

Administration 2727 Mahan Drive

Tallahassee, FL 32308

Jerome W. Hoffman, General Counsel Agency for Health Care

Administration 2727 Mahan Drive

Tallahassee, FL 32309

Sam Power, Agency Clerk Agency for Health Care

Administration

Fort Knox Bldg. 3, Ste. 3431

2727 Mahan Drive

Tallahassee, FL 32308-5403

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the Final Order in this case concerning their 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.

Docket for Case No: 94-002404CON

Orders for Case No: 94-002404CON