STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VANTAGE HEALTHCARE CORPORATION ) d/b/a MANOR REHABILITATION AND ) SPECIALTY CARE CENTER AT )

MANATEE COUNTY, )

)

Petitioner, )

)

vs. ) CASE NO. 95-2296

)

AGENCY FOR HEALTH CARE ) ADMINISTRATION, and MANATEE ) SPRINGS NURSING CENTER, INC., )

)

Respondents. )

)

) MANATEE SPRINGS NURSING CENTER, ) INC., d/b/a MEDIPLEX REHAB - ) BRADENTON, )

)

Petitioner, )

)

vs. ) CASE NO. 95-3006

) VANTAGE HEALTHCARE CORPORATION ) d/b/a MANOR REHABILITATION AND ) SPECIALTY CARE CENTER AT )

MANATEE COU NTY, )

)

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 July 18, 19, 20 and 21, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner, Douglas L. Mannheimer, Esquire Vantage Healthcare Jay Adams, Esquire

Corporation (Beverly): BROAD & CASSEL

Post Office Drawer 11300 Tallahassee, Florida 32302

For Respondent, David C. Ashburn, Esquire Manatee Springs Michael Cherniga, Esquire Nursing Center, Inc. GREENBERG, TRAURIG, HOFFMAN, (Mediplex): LIPOFF, ROSEN AND QUENTEL

Post Office Box 1838 Tallahassee, Florida 32302

For Respondent, James H. Peterson Agency for Health Care Senior Attorney Administration (AHCA): Agency for Health Care

Administration

325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131

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 6, Subdistrict 2, Manatee County, Florida. Other ancillary issues are whether Mediplex timely filed a letter of intent to apply for a certificate of need, whether Mediplex impermissibly amended its application at hearing and whether Beverly impermissibly is proposing two projects (delicensure and creation of beds in addition to those in the fixed need pool).

PRELIMINARY STATEMENT

The Agency for Health Care Administration (AHCA) published a fixed need for

63 additional nursing home beds in Manatee County for the batching cycle at issue. After review of the three applications received, AHCA preliminarily approved the application of Manatee Springs Nursing Center, Inc., d/b/a Mediplex Rehab-Bradenton (Mediplex), for CON 7939; and denied the applications of Beverly for CON 7938 and Manatee Hospitals and Health Systems, Inc., d/b/a Manatee Memorial Hospital (Manatee Memorial), for CON 7937. The two denied applicants filed petitions for formal administrative hearing challenging the denials and challenging the award of CON 7939 to Mediplex. Mediplex filed a petition challenging the applications of Beverly and Manatee Memorial. Prior to the hearing, Manatee Memorial filed a notice of voluntary dismissal. This left two applicants, Mediplex, preliminarily approved, and Beverly, preliminarily denied, competing for the 63 beds available in the fixed need pool.

At the final hearing, Beverly presented these witnesses: Mia Moore, Cathy Machacyk, Ruena Norman, John Fletcher, Kelly Gill, Armand Balsano, and Cheryl Kelsch. Beverly's exhibits received into evidence were: Nos. 1-13, 15-19, 21, 22, 24, 26, 27, and 32-36.

Mediplex presented these witnesses: Anita Faulman, Lisa Faith Williams, Orlando Lopez-Isa, Catherine Carnahan, M.D., James Carnahan, M.D., Elizabeth Dudek, Rick D. Knapp, and Mark Richardson. Mediplex's exhibits received into evidence were numbers 1-7, including exhibits numbers 2, 2A and 2C.

AHCA did not present any witnesses, but AHCA exhibits 1 and 2 were accepted into evidence by stipulation of the parties.

A transcript of the proceeding was filed and, by agreement of the parties, proposed recommended orders were submitted on December 8, 1995. The attached appendix addresses the findings of fact proposed by the parties.

FINDINGS OF FACT

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

   
   

2. Vantage Healthcare Corporation is a wholly-owned subsidiary of Beverly Health and Rehabilitation Services, Inc., which is itself a wholly-owned subsidiary of Beverly Enterprises, Inc. Beverly Enterprises, Inc. is the largest provider of nursing home services in the nation. Vantage operates four nursing homes in the State of Florida, and has no facilities outside of Florida. The Beverly family of nursing homes comprises 67 nursing homes in Florida, with just under 8,000 nursing home beds.

   
   

3. Mediplex is a wholly-owned subsidiary of the Mediplex Group which, in turn, is a wholly-owned subsidiary of Sun Healthcare Group. The Sun Healthcare Group operates primarily in the northeast U.S. (Connecticut, Massachusetts, and Rhode Island) and the west (Denver and Seattle). Mediplex operates two facilities in Florida, one in Bradenton and another in West Palm Beach. Mediplex's Bradenton facility, the applicant in this proceeding, is an existing 120-bed nursing home located at 5627 Ninth Street East, Bradenton, Florida.

   
   

   Stipulations of the Parties

   
   

4. Through their joint prehearing stipulation the parties stipulated to the following matters:

   
   

   1. Applications and Omission Responses may be placed into evidence without first having been proven, but the contents of those documents shall be hearsay, except as otherwise provided herein, until properly corroborated.

   2. Audited financial statements contained in the Application and/or Omissions Responses shall be admissible into evidence without a foundation witness and the information contained therein shall not be considered hearsay.

   3. Each of the applicants has access to sufficient financial resources to be able to construct and implement its proposed project; i.e. the proposals are financially feasible in the short term.

   4. Each of the applicants' dietary plans is adequate, meets regulatory requirements and does not afford the basis for comparative review between the parties.

      1. Each applicants' Letter of Intent, Corporate Resolution, newspaper publication and Schedule 2 are adequate and correct in form and content and comply with applicable statutes and rules except to the extent disputed by Mediplex in its Motion for Summary Recommended Order Against Vantage Healthcare Corporation. Newspaper publications were timely made by all applicants. Applications and Omissions Responses of all parties were timely filed. It remains at issue whether all Letters of Intent were timely filed.

      2. The fixed bed need pool available to applicants in this application cycle was 63 beds.

      3. Like and existing health care facilities in District 6 generally provide quality care, are efficient, and are adequate. However, up to 63 additional nursing home beds are required because the high utilization of the like and existing services renders them, or will render them, unavailable and inaccessible. By entering into this stipulation, the parties are not stating that the particular facilities owned or operated by Beverly Enterprises, Inc., or any of its subsidiaries, or Mediplex, necessarily provide quality care, are efficient or are adequate and reserve the right to present evidence on these issues related to these facilities.

      4. There are no appropriate alternatives to nursing care for those persons who, because of physical and/or social conditions require nursing care.

      5. No applicant is proposing joint, shared or cooperative health care resources. Section 408.035(1)(e), Florida Statutes, is not applicable to this proceeding.

      6. No applicant is proposing special equipment or services not accessible in adjoining areas. Mediplex, however, currently provides special equipment and/or services which may not be available in adjoining service areas. Section 408.035(1)(f) is not applicable to this proceeding.

      7. No applicant is proposing to provide a substantial portion of their proposed services to persons who do not reside in the service area. Mediplex, however, currently serves a number of patients from outside the service area in its existing facility. Section 408.035(1)(k) is not applicable to this proceeding.

      8. Existing inpatient facilities generally are being used in an appropriate and efficient manner. By so stipulating, the parties are not stating that existing facilities, particularly those operated by Beverly Enterprises, Inc., or its subsidiaries, and the Mediplex cannot be used in a more appropriate or efficient manner or are currently being used appropriately or efficiently.

      9. Patients in Manatee County will experience serious problems in accessing nursing care without the addition of additional nursing care beds.

      10. Each of the parties can hire the staff listed on Schedule 6 of their applications at the salary listed therein. The parties are not stipulating that the levels of staffing proposed on Schedule 6 are adequate.

5. Additionally, at hearing, the parties stipulated to the following matters:

   
   

   1. Neither party has ever turned in a certificate of need for failure to complete a project.

   2. Neither Mediplex nor any Beverly entity has ever failed to obtain financing for an approved project.

   3. The proposed projects are consistent with the strategic development plans of the respective applications.

   4. Both applicants have true and accurate certification pages and corporate resolutions in their applications.

   5. Both applicants will go forth with the conditions which are stated in their applications.

   6. The applicants' cover pages are true and accurate.

   7. Each applicant paid an appropriate application fee to AHCA.

   8. Each applicant has operated in Florida for the years reflected in its application.

   9. Each applicant's project development and financing costs as reflected in its application is reasonable and accurate.

   10. Each applicant's proposed project completion forecast is reasonable.

       
       

       Beverly's Proposal

       
       

6. Beverly is proposing to construct a 105-bed freestanding nursing home in Manatee County to be comprised of 63 beds from the fixed need pool and 42 beds to be delicensed from a related facility, the Manatee Health Care and Rehabilitation Center. The proposed facility will consist of 53,310 gross square feet and have a total project cost of $7,363,760. Beverly's facility will be conditioned upon providing 50.2 percent of its patient days to Medicaid patients, having a 20-bed Medicare-certified skilled nursing and subacute care unit with the capacity to treat ventilator patients, having an adult day care program, providing respite care, and treating persons with associated mental health disorders, Alzheimer's disease, and persons who are HIV positive. Beverly will also contribute $10,000 to a gerontological research fund at Florida A & M University upon approval of this project.

   
   

7. Manatee Health Care and Rehabilitation Center is a three-story, 147-bed nursing home in Bradenton, Florida. It was constructed approximately thirty years ago and contains 3-bed wards on the second and third floors. Because of its age, the Manatee Health Care and Rehabilitation Center has very limited space for the provision of therapy. Three-bed wards are not considered state of the art and are difficult to manage. Residents prefer private and semiprivate rooms to three-bed wards. Gender separation and smoking preferences are much harder to accommodate with larger wards. Infection control problems are increased with larger residential units. In spite of these drawbacks, the facility has a superior license and enjoys continuous occupancy of over 90 percent.

   
   

8. Beverly has filed a certificate of need application to delicense 42 beds at Manatee Health Care and Rehabilitation Center. Those 42 beds would be used in conjunction with 63 beds from the available fixed need pool to allow for

   the construction of a new Beverly facility at an undetermined site in Manatee County. If both applications are approved (the one at issue and the delicensure application), Beverly will remove all patient rooms from the first floor of Manatee Health Care and convert that space to therapy treatment rooms and office space. The additional therapy space will allow Beverly to purchase and install additional therapy equipment. All of the three-bed wards on the second floor of Manatee Health Care will be converted to semiprivate rooms. Beverly's proposal is intended to benefit residents at the proposed facility and the residents at the existing Manatee Health Care and Rehabilitation Center.

   
   

9. Beverly's proposed new facility is designed in a "reverse T" configuration to minimize the distance from the resident rooms to the nursing stations, with each nursing station having direct visual control over all patient rooms on that station. It will have 36 semiprivate rooms and 33 private rooms. Designed to minimize an institutional effect and provide for a home-like setting, the proposal includes two large day rooms, four activity rooms, and five enclosed courtyards. The central courtyard has a solarium/greenhouse and a screened gazebo. Separate areas are designated for the adult day care program and the Alzheimer's treatment unit. There are a large occupational and physical therapy gym and dedicated treatment areas for speech therapy and activities of daily living therapy. There is also a central ambulation court for use in physical rehabilitation.

   
   

10. In a prehearing motion for summary recommended order and throughout the proceeding, Mediplex has contended that Beverly's application for delicensure and approval of new beds is technically defective as the proposal described in its letter of intent is really two projects, rather than the required single project.

    
    

11. The letter of intent describes the new facility to be comprised of 63 beds from the fixed need pool and 42 beds to be delicensed from the existing facility. The new facility is the subject of CON application number 7938, at issue in this proceeding. On January 20, 1995, subsequent to the application omissions filing deadline for CON number 7938, Beverly filed its application for CON number 7998 for delicensure of 42 beds at the existing facility. This latter application was denied and the proceeding to challenge that proposed agency action is in abeyance pending the outcome here. (Vantage Healthcare Corporation v. Agency for Health Care Administration; DOAH case number 95-3891)

    
    

12. Beverly will not delicense its beds at the existing facility unless its application for CON for the new facility is approved. The two applications are essential elements in a single expansion scheme. Beverly made full disclosure of its intent to AHCA and confirmed with AHCA the process it should follow to present its proposal within the formal regulatory framework. The process of creating a new facility with beds from the fixed need pool combined with delicensed beds from a separate facility has been approved by AHCA in the recent past in Clearwater Land Company v. Agency for Health Care Administration,

    17 FALR 3817 (AHCA 1995, DOAH Case No. 94-2404/94-2972). In the Clearwater case, however, the project involved delicensure of the entire old facility, a distinction that is significant with regard to financial projections as discussed below, but a distinction that is not fatal to the single project issue.

    
    

    Mediplex's Proposal

    
    

13. Mediplex proposes a 60-bed addition to its existing 120-bed facility, for an additional 14,984 gross square feet at the cost of $2,019,972.

14. Mediplex's Manatee Springs Nursing Center is located in the southeastern corner of Manatee County, in close proximity to hospitals in Manatee County and Sarasota. Eighty beds are active rehabilitation, sometimes called "subacute" beds, which are Medicare certified. Forty beds are long term, less intensive care beds.

    
    

15. Mediplex has a superior license and is accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF) and the Joint Commission on Accreditation of Healthcare Facilities (JCAHO). These accreditations are evidence of extraordinary commitment to quality of care.

    
    

16. The 60 beds sought by Mediplex are intended to be long term care beds, as the census in the facility's existing long term beds remains stable, with a

    98 to 100 percent occupancy on a day to day basis. Occupancy of the subacute care beds fluctuates, but generally more of these beds are empty.

    
    

17. Mediplex provides amenities that contribute to a home-like non- institutional environment, with design features to promote the privacy, individual choice and comfort of its residents. Design and location of the proposed addition will facilitate access to all services and amenities offered at the existing facility.

    
    

18. Mediplex residents, existing and future, will benefit from staffing levels and ancillary services that are unique in a nursing home setting. The facility has three full-time physicians, including the medical director, a full- time psychologist, case managers and numerous contract therapists.

    
    

    Mediplex's Letter of Intent

    
    

19. On October 31, 1994, Beverly filed its letter of intent for its proposed 105-bed facility. Consequently, pursuant to Rule 59C-1.008, Florida Administrative Code, a grace period was triggered for the filing of additional letters of intent. The deadline for the filing of grace period letters of intent was November 16, 1994. On November 15, 1994, Mediplex delivered its letter of intent to an overnight carrier, Airborne Express, for guaranteed delivery the following day to AHCA in Tallahassee and to the Local Health Council, the Health Council of West Florida, Inc.

    
    

20. On November 17, 1994, AHCA advised Mediplex that AHCA and the local health council did not receive Mediplex's letter of intent until that same day. AHCA also advised that it would accept the letter of intent if Mediplex could obtain correspondence from the overnight carrier explaining that the late delivery was the fault of the overnight carrier and not the fault of Mediplex.

    
    

21. Despite the fact that Mediplex's letter of intent was delivered to AHCA and the local health council one day following the grace period letter of intent deadline, AHCA determined that the letter of intent should be accepted because the late delivery was the fault of the overnight carrier and Mediplex had delivered the letter of intent in a timely manner to the overnight carrier.

    
    

22. AHCA has previously accepted items from certificate of need applicants which were delivered one day late when late delivery was the result of an overnight carrier failing to follow through on its guarantee. This policy has developed in the eleven years that Liz Dudek, Bureau Chief for Certificate of Need and Budget Review, has been involved in the program. It is common and reasonable for applicants to rely on next-day delivery services and it is

    reasonable for AHCA to accept filings in the unusual event that the carrier fails to timely deliver through no fault of the applicant.

    
    

    Relevant Preferences in the Local Health Plan

    
    

23. The August 1994 CON Allocation Factors Report for District VI identifies three allocation factors that are relevant to these nursing home applicants. Both Beverly's and Mediplex's proposals include agreed conditions for Medicaid utilization that meet or exceed the percentage of persons below 125 percent of the federal poverty level (15 percent in Manatee County) and the average number of Medicaid residents in existing nursing homes in the county (50.09 percent).

    
    

24. Beverly commits to 50.2 percent for its new facility and is already achieving 72.4 percent at the facility from whence 42 beds will be derived. Although its commitment meets the criteria, it arguably represents a decline from Beverly's current outstanding Medicaid service. Uncertainty regarding the siting of the new facility affects Beverly's assurance that 50.2 percent is merely a minimum and that it expects to achieve a higher percentage. Depending upon the geographical location of the new facility in Manatee County, it may or may not attract the same level of Medicaid residents as now benefit from the existing facility.

    
    

25. Mediplex commits to serve 51 percent Medicaid residents in 100 long- term beds.

    
    

26. The second allocation factor in the District VI Plan relates to proposals of specialized services (for example, adult day care) to meet identified unmet needs. Both applicants propose an array of services. Beverly's application includes specific plans for adult day care; Mediplex's application does not.

    
    

27. Both applicants are entitled to the preference in the third allocation factor, regarding demonstrated intent to serve HIV infected persons. Beverly has identified 3,400 patient days of nursing home care to patients with HIV/AIDS in all of its Florida facilities in 1994 and projected a substantial increase in 1995. Mediplex has served, and will continue to serve these patients, but does not maintain statistics on patient days. Mediplex's unique staffing, specifically including its full-time physicians, makes it ideally prepared to care for terminally ill patients.

    
    

    The State Health Plan

    
    

28. The first allocation factor under the State Health Plan provides a preference to applicants proposing to locate nursing homes in subdistricts with occupancy rates exceeding 90 percent. The occupancy rate in Manatee County for the applicable planning horizon is 94.63 percent, and both Beverly and Mediplex qualify for this preference.

    
    

29. The second State Health Plan factor, regarding service to Medicaid residents, is the same as the local health plan factor discussed in paragraphs

    23 - 25, above, and both applicants qualify.

    
    

30. Preference under the third factor is given to applicants proposing to provide specialized services to special needs residents, including AIDS and Alzheimer's residents and the mentally ill. Beverly has agreed to condition approval of its application on services to these special needs persons.

    Mediplex does not include such agreement in its application, but provides the services and plainly has the will and the means to continue to do so.

    
    

31. State Health Plan allocation factor four is similar to the local plan allocation factor discussed in paragraph 26, above. Beverly describes and intends to implement a specific program for adult day care and includes a dedicated unit in its architectural plans; it also conditions award of its CON on the provision of respite care.

    
    

32. Mediplex's application does not address day care, but states that the addition of 60 long term care beds will make it possible to implement a respite care program. Its existing 40 long term beds have been fully utilized, with no space to accommodate respite care which by its nature is short term.

    
    

33. Allocation factor five gives preference to applicants proposing to construct facilities which provide maximum resident comfort and quality of care. Both applicants are entitled to this preference with outstanding designs and programs. Beverly's new facility will provide more space per patient overall than Mediplex's addition, but the room sizes are approximately equal.

    
    

34. During the hearing, issues were raised with regard to whether portions of both Mediplex's and Beverly's designs met the requirements of the Americans with Disabilities Act (ADA). Credible conclusions by experts for both parties established that the apparent deficiencies were in the rough designs and that ADA requirements could be met by both facilities within their proposed spaces and costs.

    
    

35. Allocation factor six provides a preference for proposals of innovative therapeutic programs which have been proven to be effective in enhancing residents' physical and mental functioning level. Beverly proposes, and Mediplex already provides, a full range of high quality therapy services. While these services may be more extensive or intensive than those offered in other older nursing homes, the services are not novel or "innovative." Further, Mediplex's application for 60 new long term care beds does not contemplate intensive therapeutic services to the residents of those new beds, which services are already being provided in its existing program. Beverly's proposal more effectively advances the goal reflected in this factor since its new facility would substantially improve the rehabilitation services it now offers.

    
    

36. Preference in allocation factor seven is given to applicants proposing charges which do not exceed the highest Medicaid per diem rate in the subdistrict. Exceptions are considered for facilities proposing to serve upper income residents. Mediplex has now, and will have in the projected future, the highest Medicaid per diem rate in the subdistrict. It failed to prove at hearing its statement in its CON application that approval of the 60-bed addition would result in a lower Medicaid per diem rate for the facility. Beverly's current and projected rates are substantially lower than Mediplex's.

    
    

37. Beverly argues that Mediplex impermissibly amended its application at hearing when its expert testified that the projected Medicaid rate is $126 per day. While the financial data, as well as other parts of the application, included careless errors, the testimony explained the data provided and did not change the revenue and expense projections on Mediplex's Schedule Eleven.

38. Allocation factor eight provides a preference to applicants with a history of superior resident care in existing facilities, considering, among other circumstances, the current licensure ratings of facilities located in Florida.

    
    

39. Both applicants have a history of providing superior resident care. Approximately 75 percent of Beverly's many facilities in Florida enjoy a superior license rating. Of the four facilities owned by wholly-owned subsidiary, Vantage, two are superior, including the facility from which beds will be delicensed. Deficiencies have been quickly corrected when identified.

    
    

40. Mediplex has consistently maintained a superior rating at the facility it seeks to expand. Its ability to withstand rigorous accreditation scrutiny by the Joint Commission on the Accreditation of Health Care Organizations and by the Commission on Accreditation of Rehabilitation Facilities, and its designation as a Head Injury Rehabilitation Care Center by the Florida Division of Vocational Rehabilitation further attest to its unique quality.

    
    

41. State Health Plan allocation factor nine gives preference to applicants proposing staffing levels which exceed the minimum staffing standards contained in licensure administrative rules. Preference is also given in allocation factor ten to applicants who will use professionals from a variety of disciplines to meet residents' needs including social services, recreation, nutrition, physical and specialized therapy, mental health and spiritual guidance.

    
    

42. Beverly and Mediplex both clearly are entitled to these preferences as they both propose staffing levels which exceed the minimum standards of the agency's administrative rules. Both describe a multidisciplinary approach in serving residents; both employ or will contract with a full array of health care and geriatric care professionals.

    
    

43. Entitlement by both applicants to the preference in allocation factor eleven is similarly uncontested. This preference relates to a respect for residents' rights and privacy and well-designed quality assurance and discharge plans.

    
    

44. State Health Plan allocation factor twelve gives preference to applicants proposing lower administrative costs and higher resident care costs than the average costs in nursing homes in the district. Only Beverly achieves this.

    
    

45. The average administrative cost per patient day in District VI in 1993 was $24.74, and the average patient care cost per day was $47.48. To arrive at a reasonable comparison, the agency applies a five percent per year inflation factor through the applicants' second year of operation (here, 1998). This results in mid-year 1998 average patient care costs of $60.60 per day and administrative costs of $31.56 per day. For the target year Beverly proposes

    $22.27 administrative costs and $67.72 patient care costs.

    
    

46. Mediplex's projected resident care cost of $118.43 and administrative cost of $59.73, per day, are both almost twice the district averages. As described by Mediplex's consultant, these costs are reflective of the high level of patient care provided in its facility. Approval of the additional 60 long term care beds, which beds will ordinarily generate less costs, will spread the subacute beds' costs over a wider base, thereby benefiting those patients. The high level of care will also be available to the long term care patients.

    Balancing Criteria: Need and Financial Feasibility

    
    

47. As reflected above, there is little to recommend one application over the other when the criteria in the local and state health plans are considered. Beverly's new physical plant is preferable and its projected Medicaid rate and administrative costs (but patient costs, as well) are lower. Mediplex, however, enjoys an impeccable reputation for quality of care and provides the unique staffing to insure that its high level and quality of care are maintained.

    
    

48. Both applicants reasonably propose to meet the identified for additional community nursing home beds in Manatee County, Florida. There is a difference in how each proposes to meet that need.

    
    

49. Beverly suggests there is a need for subacute care beds and proposes to provide twenty such beds in its new facility. It is undisputed that patients are being discharged from acute care hospitals "quicker and sicker" and they sometimes require "step-down" or subacute level of care before returning to their homes or long term living arrangements. There is a trend in nursing homes to staff and equip facilities to meet this need.

    
    

50. Beverly projected the need for additional subacute beds in Manatee County based on a flawed analysis of existing inventory. It considered only fifteen of Mediplex's eighty subacute beds and failed to include subacute beds recently approved in two hospitals in Manatee County, Blake and Manatee Memorial. These hospitals, without their own subacute beds, would be actively referring patients to community nursing homes with subacute care capability.

    
    

51. There is no established definition of "subacute" and consequently no clear basis to establish an inventory of those beds in existing facilities. The facilities themselves define and identify them based on the acuity of services provided.

    
    

52. A basic precursory step to establishing a subacute care bed is obtaining Medicare certification for that bed. There are approximately 400 Medicare-certified beds in Manatee County. Although subacute care services may not be currently provided in each of those 400 beds, their Medicare certification provides the potential for such services.

    
    

53. There is an intuitive presumption of need for adult day care services, respite care services, services to Alzheimer's and HIV/AIDS patients, all services firmly committed to by Beverly. The state and local health plans address that need generally with the preferences described above.

    
    

54. In this proceeding, however, no empirical data was presented to justify this basis for favoring Beverly's application over Mediplex's. It is not known, for example, whether the services are already being provided in other facilities or through alternative programs less costly than nursing homes.

    
    

55. Mediplex established that its proposal for long term care beds more effectively meets existing need in Manatee County.

    
    

56. Mediplex's proposal is also substantially less costly: approximately

    $2 million versus Beverly's $7 million, for the net addition of approximately the same number of beds. It is reasonable to expect that the $5 million

    difference will impact the system at some point in time when the investment is recouped either from government reimbursement systems or from the total charge structure.

    
    

57. In reality, Beverly's project is more than $7 million when $442,000 is added for the delicensure application. And that delicensure process appears to cast a cloud on the validity of Beverly's financial feasibility projections.

    
    

58. The projections contemplate a net loss ($42,184) for the first year's operation of the new 105-bed facility, and net income of $211,779 for the second year of operations. Standing alone, these are reasonable and suggest the long term financial feasibility of the new facility. The projections do not reflect the effect of delicensure of the beds in the existing facility, however. The projections related to the existing facility are found in the delicensure application, reviewed and analyzed in CON application number 7998. After delicensure, the existing facility will still generate a smaller, but positive net income. Both facilities will make money, but not as much as the existing facility without delicensure. This underscores the concern that somewhere in the system the $7.5 million investment will be recouped. That is, it is not reasonable to expect that $7.5 million is being spent to make less profit than would have been made without the investment.

    
    

59. It is easier to establish the long term financial feasibility of Mediplex's project. It is an existing facility with robust financial performance and reasonable projections in the future.

    
    

60. On balance, the Mediplex proposal better fulfills the statutory and regulatory criteria for a certificate of need.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

62. As applicants for a CON, Beverly and Mediplex bear the burden of establishing by competent substantial evidence their entitlement to approval for community nursing home beds in Manatee 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, Florida Administrative Code, based upon 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). 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).

    
    

63. Beverly's and Mediplex's applications are competing for 63 community nursing home beds stipulated to be available from the fixed bed need pool. There is no assertion that "not normal" circumstances support the award of more beds than are available in the fixed need pool.

    
    

    Mediplex's Letter of Intent Was Properly Accepted by AHCA

    
    

64. Section 408.039(2)(a), Florida Statutes, provides that letters of intent for certificate of need projects are to be filed with AHCA and the appropriate Local Health Council 30 days prior to the filing of an application.

    Section 408.039(2)(b) requires AHCA to "provide a mechanism by which applications may be filed to compete with proposals described in filed letters of intent".

    
    

65. Pursuant to Section 408.039(2)(a), Florida Statutes, AHCA established October 31, 1994, as the deadline for letters of intent for applications in the batching cycle in which the instant applications were filed. Rule 59C- 1.008(1)(l), Florida Administrative Code. Pursuant to Section 408.039(2)(b), Florida Statutes, AHCA established November 16, 1994 as the deadline for "grace period" letters of intent for applications filed in the batching cycle in which the instant applications were filed. Rule 59C-1008(1)(g), Florida Administrative Code.

    
    

66. The grace period letter of intent deadline established pursuant to Rule 59C-1.008(1)(g), Florida Administrative Code and Section 408.039(2)(b), Florida Statutes, is not a jurisdictional deadline but is more akin to a statute of limitations. Consequently, it is subject to equitable tolling. See, Machules

    v. Department of Administration, 523 So.2d 1132, 1133, note 2 (Fla. 1988), which noted that a 20-day appeal period established pursuant to a Department of Administration rule was not jurisdictional but was "more analogous to statute [sic] of limitations which are subject to equitable considerations such as tolling".

    
    

67. Equitable tolling of the grace period letter of intent deadline in this case is appropriate. The 1-day late filing of Mediplex's letter of intent with AHCA and the local health council was not the applicant's fault, but instead the fault of the overnight carrier to which Mediplex had timely delivered its letters of intent. AHCA appropriately advised MSNC that its letter of intent would be accepted upon a demonstration that the late delivery of the letter of intent was the fault of the overnight carrier.

    
    

68. AHCA's acceptance of the letter of intent is supported by past AHCA practice. See, Public Health Trust of Dade County v. Department of Health and Rehabilitative Services, 10 FALR 2499, 2503 (HRS 1987) stating where AHCA's predecessor "has accepted Letters of Intent received after the due date, if it was documented that an agent, such as Federal Express, was negligent in the timely delivery of the Letter of Intent"); First Hospital Corporation v. Department of Health and Rehabilitative Services, 6 FALR 1287, 1295 (HRS 1983) where AHCA's predecessor determined that it should accept letter of intent and application where letter of intent was filed one day late, recognizing that, "[i]t is always within the discretion of...an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it" (citations omitted); and Mederi of Alachua County, Inc. v. Department of Health and Rehabilitative Services, 13 FALR 3500, 3505 (HRS 1991) citing an example where AHCA's predecessor "waived enforcement of the rule and accepted an untimely CON application in the same batching cycle in another district because the zip code provided by HRS in the CON application package was incorrect, causing a delay in delivery by Federal Express". These cases reflect the agency's change of policy from an earlier case in which it denied letters of intent that were mailed by express mail but were delivered two days late. Beverly Enterprises - Florida, Inc., etc. v. Department of Health and Rehabilitative Services, 5 FALR 1846-A (HRS 1983). (But see also, Lakeview Center, Inc. v. Department of Health and Rehabiltative Services, DOAH Case No. 82-0994, 1982, wherein the agency considered an application after the letter of intent was late, but timely mailed. As noted in Beverly, supra, this case arose before the rule was adopted.)

    Mediplex Did Not Amend Its Application

    With Respect to Its Projections of Medicaid Reimbursement and Medicaid Patient Days

    
    

69. At the final hearing, Beverly's counsel contended that Mediplex's financial expert's testimony with respect to projected Medicaid reimbursement and projected Medicaid patient days for its proposed 60-bed addition constituted amendment to Mediplex's application. The objection was properly denied at hearing since the testimony to which the objection was made did not change, but instead simply explained, revenue and expense projections provided within the application and was consistent with the information provided in Schedule 11, Appendix 6.

    
    

70. After disposing of the threshold procedural impediments, there is little doubt that either applicant could effectively meet the identified need for community nursing home beds in Manatee County. But, as found above, these are competing applications and after weighing and balancing the criteria, the Mediplex application is favored.

RECOMMENDATION

Based on the foregoing, it is hereby recommended that the agency enter its final order awarding CON number 7939 to Mediplex (Manatee Springs Nursing Center, Incorporated).

RECOMMENDED this 22nd day of January, 1996, in Tallahassee, Florida.

MARY W. 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 22nd day of January, 1996.

APPENDIX

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

Beverly's Proposed Findings of Fact

1-3. Adopted in paragraphs 1 - 3, respectively.

4. Adopted in paragraph 6. 5&6. Adopted in paragraph 9.

1. Addressed generally in Paragraphs 33 and 34.

2. Adopted in paragraph 7.

3. Adopted in paragraph 8.

4. Adopted in paragraphs 10 - 12.

5. Adopted in paragraphs 13 and 25.

6. Adopted in substance in paragraph 16.

7. Adopted in paragraph 4.

8. Adopted in paragraphs 23 - 25.

9. Adopted in substance in paragraph 26. 16&17. Rejected as unnecessary.

18&19. Adopted in paragraph 27, except for finding of "greater commitment", which is unsubstantiated or unsupported argument.

20&21. Rejected as unnecessary.

1. Adopted in paragraph 28.

2. Adopted in paragraph 29.

24-25. Adopted in paragraph 30, except that Mediplex did present evidence of services to patients suffering from dementia.

26. Rejected as unsupported argument.

27-28. Adopted in substance in paragraphs 31 and 32.

29. Addressed, but rejected, in paragraphs 53 and 54. 30-34. Adopted in summary in paragraph 33.

35&36. Adopted in summary in paragraph 35. 37-39. Adopted in summary in paragraph 36. 40&41. Adopted in paragraphs 38 - 40.

42&43. Adopted in paragraphs 41 and 42.

44-46. Adopted in substance in paragraphs 44 - 46, except that the high acuity services will be available to all Mediplex residents.

47. Adopted in paragraph 4.

48-54. Rejected as unnecessary.

1. Adopted in paragraph 4.

2. Adopted in summary in paragraph 58.

3. Rejected as unnecessary.

4. Adopted in paragraph 46, in summary but Beverly's own projections are suspect since construction costs will be recouped through the health care system somehow.

5. Rejected as unnecessary.

6. See paragraph 58, above. The "no free lunch" argument has been credited.

61-70. Rejected as cumulative or unnecessary.

71. Rejected as argument that is unsupported by the weight of evidence. 72&73. Addressed in paragraphs 19 - 22.

1. Addressed in paragraphs 10 - 12.

2. Addressed in paragraphs 37 and 69, with the argument rejected.

Mediplex's and AHCA's Proposed Findings of Fact

1. Adopted in paragraph 3.

2. Addressed in preliminary statement. 3-5. Adopted in paragraph 11.

6. Adopted in paragraph 2. 7&8. Adopted in paragraph 12.

9-11. Addressed in preliminary statement.

12&13. Adopted in paragraphs 4 and 5, respectively. 14&15. Adopted in paragraph 19.

16&17. Adopted in paragraph 20.

18. Adopted in paragraph 21. 19&20. Adopted in paragraph 22.

21-42. Adopted in summary in paragraphs 49 - 52 and 55.

43-49. Adopted in summary in paragraphs 56 - 58.

50-108. The findings of unusually high quality of care and level of services at Mediplex's existing facility are accepted generally and are adopted in summary in paragraphs 15 - 18, 35, 40, 42, 43 and 46.

109-115. Adopted generally in paragraph 7 (final sentence). 116-122. Rejected as unnecessary.

123-128. Rejected as argument that is unsubstantiated or unsupported (that Beverly's Medicaid utilization will drop), although the undetermined site may affect the utilization as found in paragraph 24.

129-136. Rejected as unnecessary.

1. Adopted in paragraph 24.

2. Adopted in paragraph 13.

3. Rejected as unnecessary.

4. Adopted in substance in paragraph 17.

5. Rejected as contrary to the weight of evidence (as to larger rooms); adopted in substance in paragraph 34 (as to ADA compliance).

6. Adopted in paragraph 27.

143&144. Rejected as unnecessary or cumulative.

1. Adopted in paragraph 27.

2. Adopted in paragraph 4.

147-186. Adopted in summary in paragraphs 37, 56 and 59. 187-194. Rejected as unnecessary.

COPIES FURNISHED:

Douglas L. Mannheimer, Esquire Jay Adams, Esquire

BROAD & CASSEL

Post Office Drawer 11300 Tallahassee, Florida 32302

David C. Ashburn, Esquire Michael Cherniga, Esquire GREENBERG, TRAURIG, HOFFMAN,

LIPOFF, ROSEN AND QUENTEL

Post Office Box 1838 Tallahassee, Florida 32302

James H. Peterson Senior Attorney

Agency for Health Care Administration

325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131

Sam Power, Agency Clerk

Fort Knox Building 3, Suite 3431

2727 Mahan Drive

Tallahassee, Florida 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.

================================================================= AGENCY FINAL ORDER

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

STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

VANTAGE HEALTHCARE CORPORATION d/b/a MANOR REHABILITATION AND SPECIALTY CARE CENTER AT MANATEE

COUNTY, CASE NO.: 95-2296

95-3006

Petitioner, CON NO.: 7938 7939

vs. RENDITION NO.: AHCA-96-0332-FOF-CON

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION AND MANATEE SPRINGS NURSING CENTER, INC.,

Respondents.

/

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 January 22,1996, by Hearing Officer Mary Clark is incorporated by reference.

RULING ON EXCEPTIONS FILED BY VANTAGE

Vantage maintains that the hearing officer should have accepted its proposed findings that Manatee Springs is proposing virtually no therapy services in its proposed 60 bed addition." The hearing officer concluded that patients residing in the proposed addition will benefit greatly from therapy services already provided at Manatee Springs. The hearing officer cited Manatee Springs' accreditation by the Commission on Accreditation of Rehabilitation Facilities and designation as a head injury rehabilitation care center by the Florida Division of Vocational Rehabilitation as evidence of its ability to provide intensive rehabilitation therapy. See paragraphs 35 and 40. The hearing officer noted that new residents of Manatee Springs can expect to " . . benefit from staffing levels and ancillary services that are unique in a nursing home setting." See paragraph 18. The hearing officer's findings are based on competent, substantial evidence; therefore, the exception is denied.

Vantage objects to the hearing officer's characterization of the overnight delivery service offered by Airborne Express as "guaranteed". The word, guaranteed, was used in reference to the untimely delivery of Manatee Springs' letter of intent. Vantage recognizes in its exceptions that Manatee Springs' letter of intent was "delivered to Airborne Express for overnight delivery". I find no juridical significance to this use of the word, guaranteed; instead, it was used to connote a high degree of expectation of timely delivery.

Additionally, Vantage excepts to the hearing officer's endorsement of the agency's policy of excusing an untimely delivery of a letter of intent when the agency is satisfied that there is no prejudice, and that a commercial, overnight delivery service is at fault for an untimely delivery. In this case Manatee Springs' letter of intent was one day late, and the untimely delivery was excused based on the policy. The exceptions are denied.

Vantage excepts to the hearing officer's finding that Manatee Springs will provide specialized services to residents suffering from Alzheimer's disease.

The finding is supported by competent, substantial evidence; therefore, the exception is denied.

Vantage maintains that the hearing officer ignored a statutory criterion in rejecting its proposed findings relating to research and educational facilities. Taking the recommended order as a whole, it is clear the hearing officer did not ignore the criterion. The real issue is the appropriate weight to be given, and concur with the hearing officer. The exception is denied.

Vantage maintains that it is entitled to a finding that its proposal would have a more favorable impact on the cost of nursing home services in Manatee County. The hearing officer found that Beverly's substantially higher proposed costs " will impact the system at some point in time when the investment is recouped either from government reimbursement systems or from the total charge structure". See paragraph 56; see also paragraph 58. Vantage is asking the agency to reweigh the evidence which it cannot do at this level of review.

Heifetz vs. Department of Business Regulation, 475 So2d 1277, 1281 (Fla. 1st DCA 1985). The hearing officer's findings regarding costs are supported by competent, substantial evidence; therefore, the exceptions are denied.

Vantage maintains that the hearing officer should have drawn more attention to Beverly's superior record of service to Medicaid residents. The historical and proposed Medicaid service levels were appropriately considered. It was not an abuse of discretion for the hearing officer to reject Vantage's proposed finding as cumulative or unnecessary.

Vantage excepts to the finding in paragraph 49 that the Vantage proposal includes 20 subacute care beds. Vantage maintains that the beds should have been described as a 20 bed Medicare certified skilled and subacute care unit. At page 17 of its omissions response (Beverly exhibit 10), Vantage states that its proposed facility " will have a 20 bed subacute level unit". Vantage also presented testimony as to its intention to designate a 20 bed subacute care unit. See transcript, page 77. The exception is denied.

Vantage excepts to the hearing officer's findings regarding the financial impact of its proposal and its related delicensure proposal. Again, the hearing officer's findings are supported by competent, substantial evidence. The exception is denied.

Vantage excepts to the hearing officer's conclusions regarding the weighing of the review criteria. I concur with the hearing officer. The exception is denied.

Vantage excepts to the hearing officer's conclusion that Manatee Springs did not impermissibly amend its application with respect to certain payer mix and rate projections. The hearing officer concluded that the testimony at issue "explained the data provided and did not change the revenue and expense projections on schedule eleven". The exception is denied.

RULING ON EXCEPTIONS FILED BY MANATEE SPRINGS

Manatee Springs excepts to the hearing officer's conclusion that Vantage's proposal to build a nursing home by combining the beds remaining in the fixed need pool and beds delicensed at another facility is a "single project" for purposes of Rule 59C-1.008(1)(c)1, which limits a letter of intent to a single project. As noted by the hearing officer, this issue was recently considered in Clearwater Land Company vs. Agency for Health Care Administration, 17 FALR 3817 (AHCA 1995), and the hearing officer's conclusion is based on this precedent. I concur with the hearing officer. The exception is denied.

Manatee Springs excepts in whole or in part to findings in fact in paragraphs 33, 35, 39, 47; and to certain rulings by the hearing officer on findings proposed by Manatee Springs. The challenged findings are supported by competent, substantial evidence. I am satisfied the hearing officer did not abuse her discretion in making the challenged rulings. The exceptions are denied.

FINDINGS OF FACT

The agency hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The agency hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order.

Based upon the foregoing, it is

ADJUDGED, that the application of Manatee Springs Nursing Center, Incorporated, for CON 7939 be approved The application of Vantage Healthcare Corporation for CON 7938 is denied.

DONE and ORDERED this 15th day of March, 1996, in Tallahassee, Florida.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION

Douglas M. Cook, Director

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH 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 FURNISHED:

Mary Clark, Hearing Officer The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Douglas L. Mannheimer, Esquire Jay Adams, Esquire

BROAD & CASSEL

Post Office Drawer 11300 Tallahassee, Florida 32302

David C. Ashburn, Esquire GREENBERG, TRAURIG, HOFFMAN, LIPOFF, ROSEN & OUENTEL

Post Office Drawer 1838 Tallahassee, Florida 32302

James H. Peterson, Esquire Senior Attorney, Agency for Health Care Administration 2727 Mahan Drive

Fort Knox 3, Suite 3431

Tallahassee, Florida 32308-5403

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 named addresses by U.S. Mail this 19th day of March,1996.

R. S. Power, Agency Clerk State of Florida, Agency for

Health Care Administration 2727 Mahan Drive

Fort Knox 3, Suite 3431

Tallahassee, Florida 32308-5403

(904) 922-3808

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

DISTRICT COURT OPINION

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

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

VANTAGE HEALTHCARE NOT FINAL UNTIL TIME EXPIRES TO CORPORATION, d/b/a BEVERLY FILE MOTION FOR REHEARING AND MANOR REHABILITATION AND DISPOSITION THEREOF IF FILED. SPECIALTY CARE CENTER AT

MANATEE COUNTY, CASE NO. 96-1437

DOAH CASE NO. 95-2296

Appellant,

vs.

AGENCY FOR HEALTH CARE ADMINISTRATION and MANATEE SPRINGS NURSING CENTER, INC.,

Appellee.

/ Opinion filed January 27, 1997.

An appeal from an order of the Agency for Health Care Administration.

Douglas L. Mannheimer and Jay Adams of Broad and Cassel, Tallahassee, for Appellant.

John F. Gilroy, Senior Attorney, Agency for Health Care Administration, Tallahassee; and David C. Ashburn of Gunster, Yoakley, Valdes-Fauli & Stewart, P.A., Tallahassee, for Appellees.

DAVIS, J.

Vantage Healthcare Corporation (Vantage) appeals a final order of the Agency for Health Care Administration (AHCA) awarding a certificate of need (CON) to Manatee Springs Nursing Center, Inc. (Manatee), and denying the application of Vantage. The sole issue is whether AHCA erred in accepting a late filed letter of intent from Manatee. Concluding that the agency erred in departing from the clear and express requirements of its own rule, we reverse.

The facts in this case are simple and undisputed. In the second nursing home application cycle of 1994 AHCA determined there was a need for an additional 63 community nursing home beds in Manatee County, Florida. Vantage timely filed a letter of intent to apply for the CON for those beds on October 31, 1994. That triggered the grace period for competing applicants to file letters of intent under section 408.039(2)(b) and Florida Administrative Code Rule 59C-1.008(1)(g). Rule 59C-1.008(1)(g)2. states that applicants have an additional 16 days to file their letters of intent. Thus, Manatee had until

November 16, 1994, to file its letters of intent with the Agency and with the appropriate local health care council. On November 15, 1994, Manatee delivered both letters to Airborne Express for overnight delivery. Manatee made no effort to confirm that the letters were delivered before the deadline. The letters were not delivered until November 17, 1994.

AHCA concedes that both letters of intent were untimely, but, nevertheless, ruled that it could accept the late-filed letters of intent under the doctrine of equitable tolling. AHCA determined that Manatee acted reasonably in relying upon an overnight carrier and that therefore an exception should be made to the rule. The facts of this case do not present an appropriate case for the application of the doctrine of equitable tolling.

In every case cited by Manatee in which the doctrine of equitable tolling has been applied, a party was attempting through judicial or quasi-judicial proceedings to assert or protect a claim or right. "The doctrine of equitable tolling was developed to permit under certain circumstances the filing of a lawsuit that otherwise would be barred by a limitations period." [Machules v. Department of Administration], 523 So.2d 1132 (Fla. 1988) [emphasis added]. [Machules] considered the denial of an appeal as untimely. Similarly, in Stewart v. Dep't of Corrections, 561 So.2d 15 (Fla. 4th DCA 1990) the court invoked the doctrine of equitable tolling and reversed dismissal of a notice of appeal which was filed one day late. Phillip v. University of Florida, 21 Fla.

L. Weekly D1014 (Fla. 1st DCA 1996) was an appeal from the denial of a 120.57 hearing on the grounds that the petition had been untimely filed. In Castillo

v. Dep't of Administration, 593 So.2d 1116 (Fla. 2d DCA 1992), the court reversed and remanded the denial of a petition for an administrative hearing. Hamilton County Board of County Commissioners v. Dep't of Environmental Regulation, 587 So.2d 1378 (Fla. 1st DCA 1991) also applied the doctrine in the context of actual litigation, as did Dep't of Environmental Regulation v. Puckett Oil Co., Inc., 577 So.2d 988 (Fla. 1st DCA 1991). The certificate of need application process is not comparable to such judicial or quasi-judicial proceedings. We have found no authority extending the doctrine of equitable tolling to facts such as in the present case.

Nor do the "equities" in this situation mandate that this letter of intent be accepted, despite having been filed late. Manatee chose to wait until the eleventh hour, selected the carrier which was to deliver the letters, and failed to follow up and confirm that the letters had been received. As this court stated in Environmental Resource Assocs. of Florida, Inc. v. Dep't of General Services, 624 So.2d 330, 331 (Fla. 1st DCA 1993), review denied mem., 634 So.2d 623 (Fla. 1994), "[t]here is nothing extraordinary in the failure to timely file in this case." The facts of this case are completely distinguishable from those earlier decisions in which the predecessor agency was estopped to reject a late filed letter of intent because of official misrepresentations made to the applicant. Cf. First Hospital Corp. v. Florida Dep't of Health and Rehabilitative Services, 6 FALR. 1287 (HRS 1983) (doctrine of equitable estoppel applied to preclude agency from rejecting untimely filed letter of intent because the applicant knew by 11 a.m. on the day of the deadline that it had inadvertently mailed an empty envelope to the local health council, had a jet available and could have delivered a letter of intent before the deadline expired, but relied upon the representation of the Executive Director of the local health council that a replacement letter of intent sent overnight by Federal Express would be accepted as timely) . Moreover, in Mederi of Alachua County Inc. v. Dep't of Health and Rehabilitative Services, 13 FALR. 3502 (HRS 1991), the predecessor agency concluded that equity did not require the acceptance of a late-filed application for a certificate of need. In that case

the applicant mailed an application for CON to the agency in a timely manner, and also timely mailed a letter to a local health council, but addressed the letter to the wrong local health council. The executive director of the local health council which erroneously received the application expressly represented to the applicant that the application would be deemed timely filed if mailed from the wrong office to the correct one, though it would thus arrive at least a day late. Noting that this was the first batching cycle after the adoption of the rule stating expressly that the application must be received in the local health council and the agency by 5 p.m. on the day of the deadline, the agency held that it was not reasonable to rely upon those representations, and rejected the application as untimely. Indeed, even before the promulgation of that rule, in Beverly Enterprises Florida Inc. v. Dep't of Health and Rehabilitative Services, 5 FALR. 1846-A (HRS 1983), the agency specifically rejected an argument that late delivery by an express mail carrier should excuse late filing of a letter of intent.

The agency' s argument that it should be permitted to make a case by case determination regarding when to accept late filed letters of intent conflicts with the express language of its own rule. Rule 59C-1.008(g), Fla. Admin. Code contains an express provision that "[t]he application filing due date shall not be extended for any applicant filing a letter of intent under the requirements of this paragraph." The agency is obligated to follow its own rules. Buffa v.

Singletary, 652 So.2d 885, 886 (Fla. 1st DCA), appeal dismissed mem., 658 So.2d 989 (Fla. 1995), overruled on other grounds in Singletary v. Jones, 681 So.2d 836 (Fla. 1st DCA 1996); Marrero v. Dep't of Professional Regulation, 622 So.2d 1109, 1111 (Fla. 1st DCA 1993); Decarion v. Martinez, 537 So.2d 1083, 1084 (Fla. 1st DCA 1989); Gadsden State Bank v. Lewis, 348 So.2d 343 (Fla. 1st DCA 1977)

Accordingly, we reverse and remand for further proceedings consistent with this opinion.

BARFIELD, C.J., and KAHN, J., CONCUR.

Docket for Case No: 95-002296CON

Orders for Case No: 95-002296CON