STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
ODYSSEY HEALTHCARE OF COLLIER ) COUNTY, INC., d/b/a ODYSSEY ) HEALTHCARE OF CENTRAL FLORIDA, )
)
Petitioner, )
)
vs. )
) HPH SOUTH, INC., AND AGENCY FOR ) HEALTH CARE ADMINISTRATION, )
)
Respondents, )
)
and )
) THE HOSPICE OF THE FLORIDA ) SUNCOAST, INC., d/b/a SUNCOAST ) HOSPICE, )
)
Intervenor. )
Case No. 10-1605CON
)
THE HOSPICE OF THE FLORIDA ) SUNCOAST, INC., d/b/a SUNCOAST ) HOSPICE, )
)
Petitioner, )
)
vs. )
)
AGENCY FOR HEALTH CARE )
ADMINISTRATION AND HPH )
SOUTH, INC., )
)
Respondents. )
Case No. 10-1862CON
)
HPH SOUTH, INC., )
)
Petitioner, )
)
vs. )
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION; THE HOSPICE OF ) THE FLORIDA SUNCOAST, INC., ) d/b/a SUNCOAST HOSPICE; AND ) ODYSSEY HEALTHCARE OF COLLIER ) COUNTY, INC., d/b/a ODYSSEY ) HEALTHCARE OF CENTRAL FLORIDA, )
)
Respondents. )
Case No. 10-1863CON
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its designated Administrative Law Judge, R. Bruce McKibben, held the final hearing in the above-styled cases on June 11, 21 through 25, 28 through 30, and July 1 and 2, 6
through 8, 2010, in Tallahassee, Florida.
APPEARANCES
For HPH South, Inc.:
Geoffrey D. Smith, Esquire Susan C. Smith, Esquire Corrine Porcher, Esquire Smith and Associates
2873 Remington Green Circle Tallahassee, Florida 32308
For Odyssey Healthcare of Central Florida:
Mark A. Emanuele, Esquire Deborah S. Platz, Esquire Panza, Maurer, & Maynard, P.A.
Bank of America Building, Third Floor 3600 North Federal Highway
Fort Lauderdale, Florida 33308 For Suncoast Hospice:
Paul H. Amundsen, Esquire Julia Smith, Esquire Ruden McClosky, P.A.
215 South Monroe Street, Suite 815 Tallahassee, Florida 32301
For Agency for Health Care Administration: Lorraine M. Novak, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308 STATEMENT OF THE ISSUES
Whether the Certificate of Need (CON) applications filed by Odyssey Healthcare of Collier County, Inc., d/b/a Odyssey Healthcare of Northwest Florida, Inc. (Odyssey), and HPH South, Inc. (HPH), for a new hospice program in the Agency for Health Care Administration (AHCA or the Agency) Service Area 5B, satisfy, on balance, the applicable statutory and rule review criteria to warrant approval; and whether such applications establish a need for a new hospice based on special circumstances, and, if so, which of the two applications best meets the applicable criteria for approval.
Holding: Neither applicant proved the existence of special circumstances warranting approval of an additional hospice program in Service Area 5B. Although neither application is recommended for approval in this Recommended Order, both applicants, on balance, satisfy the applicable statutory and rule criteria. Of the two, HPH best satisfies the criteria.
PRELIMINARY STATEMENT
On October 2, 2009, the Agency published a fixed need pool (FNP) for one new hospice program in Service Area 5B, a single county area consisting of Pinellas County, for the second batching cycle of 2009. AHCA's projection of need was based, in part, on information submitted by the existing provider of hospice services in Service Area 5B, i.e., The Hospice of the Florida Suncoast, Inc. d/b/a Suncoast Hospice (hereinafter "Suncoast").
On October 7, 2009, Suncoast submitted a letter to AHCA addressing the FNP and provided revised semiannual utilization data for the time period January 1 through June 30, 2009. Upon review of the revised Suncoast data, AHCA published a revised notice changing the FNP to zero.
HPH, Odyssey, and LifePath Hospice (a co-batched applicant who is not a party to the instant action) each timely submitted a letter of intent and a CON application seeking approval of a new hospice program in Service Area 5B despite the existence of
a zero FNP. Each of the applicants also filed a challenge to the revised FNP. Suncoast petitioned to intervene in the FNP challenge, however, each of the parties then voluntarily dismissed its challenge to the FNP.
On February 19, 2010, AHCA issued its State Agency Action Report (SAAR) preliminarily approving HPH's CON application and denying the other co-batched applications. AHCA's decision was published in the March 5, 2010, Florida Administrative Weekly, Vol. 26, No. 9.
Odyssey timely filed a petition to contest the denial of its application and the approval of HPH's CON application. HPH filed an approved applicant petition in support of its own application and in opposition to the Odyssey application. Life Path Hospice did not contest the denial of its application.
Suncoast, as an existing hospice provider in Service Area 5B, filed a petition in opposition to the HPH and Odyssey CON applications and was granted intervenor status in this matter.
HPH, as an approved applicant, requested that the final hearing in this matter be commenced within 60 days in accordance with Section 408.039, Florida Statutes (2009).1 Over objection by Odyssey and Suncoast, the final hearing was scheduled to commence on June 11, 2010. The first day of final hearing was used to discuss preliminary matters and pending motions. The
hearing then recessed until June 21, 2010, and was held on the dates set forth above.
The parties filed a joint pre-hearing stipulation on
June 18, 2010, i.e., during the period between the start of the final hearing and its recommencement on June 21, 2009.
During the final hearing, HPH presented the testimony of five witnesses: Thomas Barb, president and CEO of HPH; Nancy Brown, senior vice-president for clinical services, accepted as an expert in Hospice operations, nursing and clinical care; Patricia Greenberg, accepted as an expert in health planning, hospice planning, and healthcare finance; Susan Versley, registered nurse; and Dr. David McGrew, managing partner for Hospice and Palliative Care Physician Services, accepted as an expert in hospice and palliative care medicine. HPH Exhibits 1 through 35, 40 through 50, 51(A through D), 52(A through E), 53(A), 54(A through D), 55(A through G), 56 through 62, 66, 68
through 81, 83 through 85, 87, 88, 90, 94, 96, 104, 104A, 109,
112, 113, 115, and 126 were admitted into evidence. Ms. Greenberg was also recalled as a rebuttal witness.
AHCA called one witness during its case in chief: Jeffrey Gregg, chief of the Bureau of Health Finance Regulation for AHCA. Agency Exhibits 1 and 2 were admitted into evidence.
Odyssey called three witnesses: Sally Parnell, senior vice-president for clinical and regulatory affairs, accepted as
an expert in post-acute nursing and operations, clinical and regulatory compliance, and hospice clinical and administrative operations; Jon Marc Creighton, executive director of Odyssey Healthcare Marion, accepted as an expert in hospice and nursing home administration; and Mark Richardson, accepted as an expert in health planning and hospice planning. Odyssey Exhibits 1,
5 through 11, 13 through 25, 30, 34, 43 through 47, 49, 52, 53,
59 through 62, 65, and 79 were admitted into evidence.
Suncoast presented the testimony of four witnesses:
Dr. Deidra Woods, medical director of Suncoast, accepted as an expert in hospice and palliative medicine; Marci Pruitt,
vice-president of hospice programs, accepted as an expert in hospice nursing and hospice administration; Anne Hocksprung, vice-president of finance, accepted an as expert in healthcare finance; and Daniel J. Sullivan, accepted as an expert in healthcare planning. Suncoast Exhibits 5 through 8, 11, 13
through 19, 22 through 25, 27, 43 through 50, 51(a through j), 52(a through e), 53(a and b), 54, 55(a and b), 56(a through i), 57, 58, 64 through 70, and 74 through 76 were admitted into evidence.
The following items were officially recognized pursuant to requests by one or more of the parties:
Recommended Order and Final Order in DOAH Case No. 01-4415CON;
Recommended Order and Final Order in DOAH Case No. 00-1067CON;
Florida Hospice Need Projections for Hospice Programs, Background Information for Use in Conjunction with the October 2009 Batching Cycle for the January 2011 Hospice Planning Horizon, as revised October 13, 2009;
AHCA's Notice of Development of Proposed Rules for Hospice Programs, Rule No. 59C-1.0355, published in the Florida Administrative Weekly, Volume 31, Number 49, December 9, 2005; and
AHCA's Notice of Development of Proposed Rules for Hospice Programs, Rule No. 59C-1.0355, published in the Florida Administrative Weekly, Volume 32, Number 13, March 31, 2006.
Both prior to and at the final hearing, Suncoast raised the issue of whether either of the applicants had improperly amended their CON application. Testimony was taken at final hearing to establish certain facts concerning this issue. The parties were given until no later than ten days after the filing of the hearing transcript at DOAH to submit briefs as to their positions on the illegal amendment issue. Each party timely submitted a brief, and an Order was entered on August 24, 2010,
holding that neither applicant improperly amended its application.
Parties were given 60 days from the filing of the transcript to submit proposed findings of fact and conclusions of law, limited to 60 pages. The parties subsequently requested and were granted leave to submit their proposed recommended orders no later than October 18, 2010. Odyssey also moved for leave to extend the page limit to 80 pages, but that request was denied. The parties were, within 10 days after proposed recommended orders were filed, to submit any objections they had to findings made by other parties which relied upon uncorroborated hearsay. Each party timely submitted a Proposed Recommended Order, and each was considered in the preparation of this Recommended Order. Objections filed by parties relating to hearsay evidence were duly considered.
FINDINGS OF FACT
The Parties
AHCA
The Agency for Health Care Administration is the state agency authorized to evaluate and render final determinations on CON applications pursuant to Subsection 408.034(1), Florida Statutes.
HPH
HPH is a newly created not-for-profit corporation formed to initiate hospice services in Pinellas County. HPH is a wholly-owned subsidiary of Hernando-Pasco Hospice, Inc., d/b/a HPH Hospice and is one of the oldest, not-for-profit community hospices in Florida.
HPH Hospice was incorporated in 1982 to serve terminally ill persons within Hernando and Pasco Counties. HPH was approved to expand its services north to Citrus County in
2004.
HPH is a high-quality provider of hospice services in
the service areas where it currently operates. It provides pain control and symptom management, spiritual care, bereavement, volunteer, social work, and other programs.
HPH employs a physician-driven model of hospice care, with significant involvement of hospice and palliative care physicians who are physically present treating patients in their homes. The number of physician home visits provided to hospice patients by HPH physicians is larger than many hospices in Florida and throughout the United States. In 2009, HPH provided over 35,000 visits by physicians, advanced registered nurse practitioners, and licensed physician assistants to its hospice patients. The majority of these visits occurred in the patients' homes.
HPH operates multiple facilities that allow for provision of services to patients in various settings and hospice levels of care. Among its facilities, HPH operates four buildings it calls Care Centers, at which patients can receive general in-patient care. Additionally, HPH operates four units which it calls Hospice Houses. Those units provide for residential care in a home-like environment for patients who do not have caregivers at home or who otherwise are in need of a home. HPH receives no reimbursement for room and board for the care provided at its Hospice Houses and expends over $1.4 million annually in charity care to operate these Hospice Houses for the benefit of its patients.
HPH has an established record of providing all levels of hospice care and does not use its Care Centers as a substitute for providing continuous care in the patient's home when such care is needed. Annually, HPH provides approximately
percent of its patient days for continuous care patients.
HPH has well-developed staff education and training programs, including specialized protocols for care and treatment of patients by terminal disease type such as Alzheimer's, COPD, cancer, failure to thrive, and pulmonary diseases.
Odyssey
Odyssey is the entity applying for a new hospice program in Service Area 5B. The sole shareholder of Odyssey is
Odyssey HealthCare Operating B, LP, which is a wholly-owned subsidiary of Odyssey HealthCare, Inc. (OHC), Odyssey's parent and management affiliate. Odyssey was formed for the purpose of filing for CON applications in Florida and, thereafter, for owning and operating hospice programs in Florida.
OHC is a publicly-traded company founded in 1996 and focuses on caring for patients at the end of life's journey. OHC's sole line of business is hospice services. OHC's patient population consists of approximately 70 percent non-cancer and
30 percent cancer patients.
OHC is one of the largest providers of hospice care in the United States. OHC has approximately 92 Medicare-certified programs in 29 states, including established programs in
Miami-Dade (Service Area 11) and Volusia (Service Area 4B) Counties and a start-up program in Marion County (Service Area 3B), which was licensed in January 2010.
Over four years ago, OHC was the subject of an investigation by the United States Department of Justice that ultimately resulted in a settlement and payment of $13 million to the federal government in July 2006. The settlement did not involve the admission of liability or acknowledgement of any wrongdoing by OHC. As part of the settlement, OHC entered into a corporate integrity agreement (CIA) with a term of five years. Odyssey is now in the final year of the CIA. The settlement and
CIA allow OHC to self-audit to ensure compliance with the Medicare conditions of participation, which is the first and only time the OIG has allowed a provider to self audit.
Suncoast
Suncoast is a large and well-developed comprehensive hospice program serving Pinellas County, Service Area 5B. Suncoast is the sole provider of hospice services in Service Area 5B. According to data reported to the Department of Elder Affairs, Suncoast had 7,375 admissions and provided 795,102 patient days of care in 2009, more than any other Florida hospice. In that same year, Suncoast provided 115,247 patient days of care in assisted living facilities, the third highest total in Florida.
Suncoast considers itself a model for hospice across the United States and the world. Suncoast has a large depth and breadth of programs, including community programs offered by its affiliate organizations, such as the AIDS Service Association of Pinellas County, the Suncoast Institute, and Project Grace. Suncoast is active in the national organization for hospices and interacts with programs that use it as a model and resource. Unlike the applicants, Suncoast does not use the Medicare conditions or definitions to limit or define the scope of services it provides. Under the Florida definition, hospice is provided to patients with a life expectancy of 12 months or
less. HPH, by way of contrast, uses the Centers for Medicare and Medicaid Services definition for hospice, i.e., a prognosis of six months or less.
Overview of Hospice Services
In Florida, hospice programs are required to provide a continuum of palliative and supportive care for terminally ill patients and their families. Under Florida law, a terminally ill patient has a prognosis that his/her life expectancy is one year or less if the illness runs its normal course. Under Medicare, a terminally ill patient is eligible for the Medicare Hospice benefits if their life expectancy is six months or less.
Hospice services must be available 24 hours a day, seven days a week, and must include certain core services, including nursing, social work, pastoral care or counseling, dietary counseling, and bereavement counseling. Physician services may be provided by the hospice directly or through contract.
Hospices are required to provide four levels of hospice care: routine, continuous, in-patient, and respite. Hospice services are furnished to a patient and family either directly by a hospice or by others under contractual arrangements with a hospice. Services may be provided in a patient's temporary or permanent residence. If the patient needs short-term institutionalization, the services are
furnished in cooperation with those contracted institutions or in a hospice in-patient facility.
Routine home care comprises the vast majority of hospice patient days. Florida law states that hospice care and services provided in a private home shall be the primary form of care. Hospice care and services, to the extent practicable and compatible with the needs and preferences of the patient, may be provided by the hospice care team to a patient living in an assisted living facility (ALF), adult family-care home, nursing home, hospice residential unit or facility, or other
non-domestic place of permanent or temporary residence. A resident or patient living in an ALF, nursing home, or other facility, who has been admitted to a hospice program, is considered a hospice patient, and the hospice program is responsible for coordinating and ensuring the delivery of hospice care and services to such person pursuant to the statutory and rule requirements.
The in-patient level of care provides an intensive level of care within a hospital setting, a skilled nursing unit or in a freestanding hospice in-patient facility. The in- patient component of care is a short-term adjunct to hospice home care and home residential care and should only be used for pain control, symptom management, or respite care in a limited manner. In Florida, the total number of in-patient days for all
hospice patients in any 12-month period may not exceed
20 percent of the total number of hospice days for all the hospice patients of the licensed hospice.
Continuous care, similar to in-patient care, is basically emergency room or crisis care that can be provided in a home care setting or in any setting where the patient resides. Continuous care, like in-patient care, was designed to be provided for short amounts of time, usually when symptoms become severe and skilled and individual interventions are needed for pain and symptom management.
Respite care is generally designed for caregiver relief. It allows patients to stay in hospice facilities for brief periods to provide breaks for the caregivers. Respite care is typically a very minor percentage of overall patient days and is generally designed for caregiver relief.
Medicare reimburses the different levels of care at different rates. The highest level of reimbursement is for continuous care. Approximately 85 to 90 percent of hospice care is covered by Medicare.
The goal of hospice is to provide physical, emotional, psychological, and spiritual comfort and support to a terminally ill patient and their family. Hospice care provides palliative care as opposed to curative care, with the focus of treatment centering on palliative care and comfort measures. There is no
"bright line test" as to what constitutes palliative care and what constitutes curative care. The determination is made on a case-by-case basis depending upon the facts and circumstances of each such case. However, palliative care generally refers to services or interventions which are not curative, but are provided for the reduction or abatement of pain and suffering.
Hospice care is provided pursuant to a plan of care that is developed by an interdisciplinary group consisting of physicians, nurses, social workers, and various counselors, including chaplains.
There are certain services required by individual hospice patients that are not necessarily covered by Medicare and/or private or commercial insurance. These services may include music therapy, pet therapy, art therapy, massage therapy, and aromatherapy. There are also more complicated and expensive non-covered services, such as palliative chemotherapy and radiation that may be indicated for severe pain control and symptom control.
Suncoast provides, and both Odyssey and HPH propose, to provide hospice patients with all of the core services and many of the other services mentioned above.
Fixed Need Pool
The Agency has a numeric need formula within its rule for determining the need for an additional hospice program in a
service area. See Fla. Admin. Code R. 59C-1.0355(4)(a). When applying the formula in the present case, AHCA ultimately determined that the fixed need was zero for the second batching cycle of 2009. In the absence of numeric need, an applicant must document the existence of one of three delineated special circumstances set forth in Florida Administrative Code Rule 59C-1.0355(4)(d), i.e., (1) That a specific terminally ill population is not being served; (2) That a county or counties within the service area of a licensed hospice program are not being served; or (3) That there are persons referred to hospice programs who are not being admitted within 48 hours. Absent numeric need or one of the delineated special circumstances, there cannot be approval of a new hospice program.
In forecasting need under the hospice rule's methodology, AHCA uses an average three-year historical death rate. It applies this average against the forecasted population for a two-year planning horizon. AHCA also uses a statewide penetration rate, which is the number of hospice admissions divided by hospice deaths. The statewide average penetration rate is subdivided into four categories: cancer over age 65, cancer under age 65, non-cancer over age 65, and non-cancer under age 65. The projected hospice admissions (based on death rate and projected population growth) in each category are then compared to the most recent published actual admissions to
determine the number of projected un-met admissions in each category. If the total un-met admissions in all categories exceed 350, a new hospice is warranted, unless there is a recently approved hospice in the service area or a new hospice provider has not been operational for two years.
In the instant case, AHCA's final projections showed the net un-met need for hospice's admissions in Service Area 5B was 318, i.e., below the threshold amount of 350 necessary to establish need for an additional hospice program. The fixed need pool for the purpose of this administrative hearing is zero.
HPH is primarily basing its determination of need for a new hospice on its contention that there are three specific terminally ill population groups in Pinellas County that are not being served.
Odyssey is primarily basing its determination of need for a new hospice on its contention that there are persons being referred to the existing hospice program in Pinellas County who are not being admitted within 48 hours.
The Proposals
HPH's Proposal
HPH proposes to establish its new hospice program in Pinellas County, Service Area 5B. HPH is currently licensed to provide hospice care in three contiguous sub-districts north of
Service Area 5B, i.e., in Hernando, Pasco, and Citrus counties. HPH's corporate headquarters is located in Pasco County, ten to
15 minutes from the Pinellas County border. HPH currently operates a home health agency in Pinellas County.
HPH's CON application identifies special circumstances justifying approval of its proposal, including four
sub-populations of terminally ill persons who are currently underserved in Service Area 5B: (1) patients living in ALFs;
(2) patients requiring continuous care; (3) medically complex patients; and (4) patients not being admitted within 48-hours.
Another circumstance identified by HPH to support approval of its application is the fact that Pinellas County is one of the most populous and most elderly service areas in the State, and yet, it only has a single hospice provider. HPH argues that the fact Suncoast is a sole hospice provider for the service area exacerbates and contributes to the problems of gaps in available hospice services to the specific terminally ill sub-populations identified in its CON application.
HPH proposes a de-centralized model of hospice service delivery similar to its model in the three contiguous counties where HPH presently provides hospice services. HPH proposes contracting with existing nursing homes and hospitals for
in-patient beds ("scatter beds") throughout Service Area 5B.
HPH then projects that it could offer in-patient services in the
local neighborhoods of patients and families where they live, as opposed to transferring patients to a single in-patient facility for the provider's convenience. As census increases, HPH commits to establish, by month seven of operation, a dedicated in-patient unit to provide in-patient level of care and Hospice House residential care to patients in a home-like environment.
Like its hospice operations in Hernando, Pasco and Citrus Counties, HPH proposes to implement its "physician- driven" model of hospice care in Service Area 5B, allowing for greater involvement of physicians in the care and treatment of hospice patients, including physician home visits.
Odyssey's Proposal
Odyssey proposes to address lack of competition2 in Service Area 5B and the special circumstance of patients not being admitted within 48 hours of referral.
Under AHCA's hospice rule, an applicant may demonstrate the need for a new hospice provider if there are persons referred to a hospice program who are not being admitted within 48 hours. However, the applicant must indicate the number of such persons.
Odyssey relies upon referral of admission statistical information previously provided by Suncoast to a sister Odyssey entity in a 2005 hospice CON matter. Suncoast at that time provided three years of data that demonstrated between 1,700
(31 percent of admissions) and 2,300 (38 percent of admissions) of patients admitted to Suncoast were admitted 72 hours or more after referral. The definition of referral by Suncoast, however, differs from the definition of referral relied upon by Odyssey. (See Paragraph 56, herein.)
Odyssey also provided letters of support from the community to further evidence the existence of the 48-hour special circumstance. However, the letters of support originally appeared in an application filed by Odyssey in 2007 and were not given any weight in the instant proceeding based on their staleness.
Odyssey also contends that the existence of a sole provider in Service Area 5B has created a monopolistic situation in the service area. It further contends that the lack of competition has led to the existence of a 48-hour special circumstance in Service Area 5B. Approval of Odyssey's application will, it says, eliminate the monopoly currently existing in Service Area 5B and will address the lack of competition currently occurring in Service Area 5B. Subsection 408.045(2), Florida Statutes, speaks of a "regional monopoly," but there is no credible evidence in the record to suggest that Suncoast's position as a sole provider in Pinellas County constitutes a "regional monopoly."
Facts Concerning Special Circumstances Arguments
Service Area Demographics
Hospice Service Area 5B, Pinellas County, is a single-county hospice service area with a population of approximately one million residents. Pinellas County is currently ranked as the fourth largest county in the State in total numbers of elderly persons over 65 years of age, as well
as elderly persons over 75 years of age, behind only Miami-Dade, Broward and Palm Beach Counties.
Pinellas County also experienced the fourth highest number of total deaths in the State in 2008--11,268.
Pinellas County's mortality rate in recent years has slowed. However, even considering a slower growth rate in the number of deaths, Pinellas County likely will remain the fourth largest county in the State in both elderly population and number of deaths through 2015.
Although it is the fourth largest service area in terms of likely hospice patients, Suncoast is the sole hospice provider in Service Area 5B. By contrast, the other three largest service areas all have multiple hospice programs to serve their large elderly populations with eight providers in Service Area 11 (Miami-Dade), five providers in Service Area 10 (Broward), and three providers in Service Area 9C (Palm Beach).
In assessing the extent of utilization of hospice services in Service Area 5B, HPH through its health planner,
Patricia Greenberg, noted that Suncoast appears to have
over-stated its utilization rate in its semi-annual reports to AHCA. Ms. Greenberg testified that Suncoast's AHCA data includes patients who are not truly hospice patients and are, instead, patients who are participating in non-hospice programs operated by Suncoast, including palliative care programs known as "Suncoast Supportive Care" and "Hospital Support." The number of such patients was not quantified by Ms. Greenberg.3
Suncoast counters that it does not let the conditions of participation define the scope and breadth of hospice services it offers. Suncoast tries not to be defined by the Medicare conditions of participation and has programs that are not covered by the benefit, including but not limited to its residential care at Woodside and its caregiver services.
Specific Terminally Ill Populations
HPH identified as under-served in Service Area 5B medically complex patients with complex medical needs, including multiple IVs, wound vacs, ventilator, complex medications, or acutely uncontrolled symptoms in multiple domains. These are the same kinds of patients who would require continuous care within their homes.
Hospice patients have become more highly acute in recent years. More patients are being discharged from hospitals with highly complex medical conditions, often directly from hospital intensive care units. Patients discharged directly from hospitals tend to have higher acuity levels.
Ms. Greenberg reviewed Suncoast's data on hospital discharges and found Suncoast statistically lags behind HPH in caring for medically complex patients discharged from hospitals. Looking at a three-year average, HPH had 3.7 percent of its hospice discharges directly admitted from hospitals, compared to
percent for Suncoast. This is more than a 50-percent deviation between hospital discharges to hospice for HPH versus Suncoast. However, a comparison of Suncoast to HPH does not establish that there is a specific underserved population in Service Area 5B which is not receiving services.
One case manager testified to sometimes not being able to timely find hospice placements for medically complex patients. Such patients would then have to be transferred from the hospital to a nursing home or rehabilitation facility. However, she did not testify that this specific terminally ill population was not being served, only that they were being served somewhere other than in an in-patient hospice bed.
Medically complex patients, including those needing continuous care, were another specific terminally ill population
identified by HPH. At page 54 of her deposition, Deborah Casler, a case manager at Helen Ellis Hospital, addressed those populations, saying, "[w]hat I am going to say is if anybody needed continuous care through Suncoast, it would happen, but it wasn't always a quick and easy process."
HPH compared its percentage of continuous care patient days with Suncoast, showing that HPH had more. That does not equate to an absence of service for any specific terminally ill population. HPH attempts to create a presumption that services are not being provided by conditioning its application on a certain percentage (3 percent) of days for continuous care patients. That is merely a projection of intent; it is not evidence that a certain population is not currently being served.
Assisted Living Facility Residents
HPH provided anecdotal evidence that some ALFs in Pinellas County were not pleased with the services being provided by Suncoast. One ALF administrator was dissatisfied that Suncoast took a long time to admit her resident (but the resident was ultimately admitted). Another was disappointed with Suncoast because it took a long time to get medications for her resident. Another felt like Suncoast's quality of care was inferior.
HPH provides a greater percentage of hospice services to ALF residents in Pasco (12.7 percent), Hernando (26.5 percent), and Citrus (23.5) counties than Suncoast provides to ALF residents in Pinellas County. There are approximately 215 ALFs in Pinellas County of varying sizes, i.e., from three beds to almost 500 beds. Suncoast did not provide services to all of them. There was no showing, however, that any resident of an ALF who needed or requested hospice services was denied such care. None of the evidence presented by HPH establishes the existence of a group of ALF residents who were not being served in the service area; nor does the evidence prove that any specific ALF residents are, in fact, terminally ill.
The 48-Hour Admission Provision
Neither Suncoast, nor Odyssey presented any hard data on timeliness of admissions. In fact, none of the parties could agree as to what action constitutes an admission. Suncoast says an admission must include a physician order and a consent by the patient and family. Odyssey identifies a referral as a telephone call from a family member, even if the call is simply an inquiry as to what services might be available. Odyssey says that the majority of its patients are admitted within three hours of referral and at least 80 percent are admitted within
24 hours. During that three-hour time frame, Odyssey will contact the family, contact the physician in order to evaluate
and admit, if appropriate, screen the patient to ensure he or she meets the eligibility guidelines, go out and meet with the family, and provide support while necessary information is being gathered.
HPH candidly admits that the issue of admissions within 48 hours does not, in and of itself, justify the approval of a new hospice program in Service Area 5B. However, HPH argues, it is an element of hospice services that HPH would do better than the other parties.
There is no credible evidence in the record that an identified number of persons in Pinellas County had not been admitted to hospice within 48 hours of referral.
Statutory and Rule Review Criteria
Rule Preferences
The Agency is required to give preference to an applicant meeting one or more of the criteria specified in Florida Administrative Code Rule 59C-1.0355(4)(e)1 through 5:
Commitment to serve populations with unmet need.-- There is no numeric need in this matter. Neither applicant proved the existence of a population with unmet need.
Commitment to provide in-patient care through contract with existing health care facilities.-- Both HPH and Odyssey intend to use scatter beds and to contract with existing health care providers.
Commitment to serve homeless and AIDS patients, as well as patients without caregivers.--Both applicants have shown a history of serving such groups and commit to do so in Pinellas County.
Not Applicable.
Commitment to provide services not covered by insurance, Medicare or Medicaid--Both applicants have a good history of providing indigent care and commit to do so in Pinellas County.
Consistency with Plans; Letters of Support
Florida Administrative Code Rule 59C-1.0355(5) requires consideration of the applications in light of the local and state health plans. The local health council plans are no longer a factor in this proceeding. The state health plan addresses the concept of letters of support. Again, as neither applicant proved special circumstances warranting approval of a new hospice program, this comparison is unnecessary. However, there was considerable testimony and argument at final hearing concerning letters of support and the issue deserves some discussion.
Each applicant provided letters of support. In fact, HPH's application contained over 250 letters of support from a wide range of writers, including physicians, nurses, ALF and nursing home administrators, and others. AHCA even complimented HPH's letters of support in both quantity and quality. Such letters are, of course, hearsay and cannot be relied upon to make findings as to the statements made herein. However, the fact that HPH generated so many letters of support is a fact that lends additional credence to their application. Odyssey's letters of support, by comparison, were much fewer in number. The letters were also dated, having come from a CON application filed some three years prior to the application currently at issue. The content of those letters would also be hearsay. And in the present action, the age of the letters would reduce their significance as support for the Odyssey CON application at issue.
Statutory Review Criteria
The Agency reviews each CON application in context with the criteria set forth in Subsection 408.035(1)(a) through (j), Florida Statutes:
Subsection 408.035(1)(a), Florida Statutes--The need for the health care facilities and health services being provided
There was no need projected by AHCA under its need methodology.
Neither party established the existence of special circumstances warranting approval of a new hospice program in Service Area 5B.
Subsection 408.035(1)(b), Florida Statutes-- availability, quality of care, accessibility, and extent of utilization
Suncoast is the sole provider of hospice services in Service Area 5B. This service area is one of the largest in the State. There are other service areas which have a single hospice provider, but Service Area 5B is the largest service area to be served by a single hospice provider. Service Area 5B experienced the fourth largest number of deaths in the State in 2008, an important factor in the provision of hospice care.
Suncoast has 15 interdisciplinary care teams, each of which, lead by a patient-family care coordinator, includes RNs, home health aides, counselors, volunteers, and a chaplain. Suncoast has a north community service center in Palm Harbor that houses four patient care teams. On the back of that property is Brookside, Suncoast's newly built 30-bed in-patient facility. In central Pinellas County, Suncoast has its main service center with six patient care teams along with administrative and support offices. Suncoast has a pharmacy, as well as durable medical equipment and infusion departments, located in Largo. In central Pinellas County is Suncoast's
ten-acre, 72-bed Woodside facility. Thirty-six of the beds are
in-patient and 36 are residential. On the back of the property are 18 efficiency apartments called "Villas" with separate living, sleeping and kitchen areas. When patients become too ill to remain at home, their spouse may move into a villa until the patient dies.
In the southern portion of the county is Suncoast's south community service area which houses five patient care teams, as well as "ASAP." ASAP is Suncoast's AIDS Service Association of Pinellas County which serves and provides support to patients with HIV and AIDS.
Suncoast also has in-patient contracts with every hospital in Pinellas County and a number of contracts with nursing homes for in-patient care. Patients may receive continuous care in the home whether that is a residence, an ALF, or a nursing home or may receive care in the Suncoast in-patient unit.
There is disagreement over whether Suncoast accurately reports its admissions and whether all reported admissions are actually hospice patients. Further, HPH points out that its penetration rate in counties where it operates is much higher than Suncoast's penetration rate in Pinellas County. However, the most credible evidence is that Suncoast is effectively serving the needs of hospice-eligible residents of Service
Area 5B.
Subsection 408.035(1)(c), Florida Statutes--ability to provide quality of care and record of providing quality of care
Both applicants satisfy this criterion. Both applicants can provide a broad range of quality hospice services to all its patients.
HPH touts its physician model, including physician home visits, as evidence of its commitment to quality care. Physician visits have been proven to help patients get pain under control more quickly, an important factor considering ten percent of hospice patients die within 48 hours of admission.
Odyssey is a large company and has extensive operational policies and procedures concerning provision of quality care to its patients. Odyssey has a program called Care Beyond which it believes will enhance quality care in Service Area 5B.
Odyssey has had some regulatory violations while HPH has not. However, Odyssey has resolved those violations favorably.
Subsection 408.035(1)(d), Florida Statutes-- availability of resources, including health personnel, management personnel, and funds for project accomplishment and operation
The parties stipulate that both applicants meet this criterion.
Subsection 408.035(1)(e), Florida Statutes--extent to which proposed services will enhance access to health care for residents of the service district
Both applicants satisfy this criterion.
HPH is the existing provider of hospice services in the adjacent service area to Service Area 5B. HPH can use its existing contacts in Service Area 5B to extend its service to residents of that area. HPH has already established relationships with Airamed Corporation and its 11 nursing homes and ALF in Service Area 5B. HPH also commits to being more directly involved with smaller ALFs in Pinellas County.
Odyssey is a large hospice with significant resources which can be utilized to enhance access for residents of Service Area 5B. It commits to bring quality personnel to Service
Area 5B as part of its successful start-up procedures.
Subsection 408.035(1)(f), Florida Statutes--immediate and long-term financial feasibility
The parties stipulate that both applicants meet this criterion.
Subsection 408.035(1)(g), Florida Statutes--extent to which proposal will foster competition that promotes quality and cost-effectiveness
Both applicants are established providers of hospice services. The absence of any other hospice provider in Pinellas County means there is no effective competition. If either of the applicants was granted a CON for a new hospice in Service
Area 5B, it would likely foster competition and promote quality and cost-effectiveness.
Subsection 408.035(1)(h), Florida Statutes--costs and methods of construction, etc.
This criterion is not applicable to the instant case.
Subsection 408.035(1)(i), Florida Statutes--the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent
Both applicants meet this criterion.
HPH offers extensive services that go beyond the Medicare requirements of participation. It also operates "Hospice Houses" which provide room and board to homeless hospice patients.
Odyssey's record of indigent care is evidenced by the fact that approximately 55 percent of its non-Medicare net revenue is from Medicaid, and 9.5 percent of its non-Medicare services are provided to indigent patients.
Subsection 408.035(1)(j)--designation as a Gold Seal Program
This criterion is not applicable to the instant case.
Ultimate Findings of Fact
The Agency determined that there is no need for an additional hospice in the service area based upon the fixed need pool formula.
Neither applicant was able to establish the existence of special circumstances warranting approval of a new hospice in the service area.
There is no specific terminally ill population which is not receiving hospice services that has been identified by the applicants.
There is no persuasive evidence that there is an identifiable number of individuals who were referred to hospice, but were not admitted within 48 hours.
CONCLUSIONS OF LAW
Jurisdiction
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569, 120.57(1), and 408.039(5), Fla. Stat.
Burden of Proof
As applicants, HPH and Odyssey each has the burden of proving, by the preponderance of the evidence, entitlement to a CON. Boca Raton Artificial Kidney Ctr., Inc. v. Dep't of Health & Rehabilitative Servs., 475 So. 2d 260 (Fla. 1st DCA 1985); § 120.57(1)(j), Fla. Stat.
The award of a CON to an applicant must be based on a balanced consideration of all applicable and statutory rule criteria. Balsam v. Dep't of Health & Rehabilitative Servs.,
486 So. 2d 1341 (Fla. 1st DCA 1986). "[T]he appropriate weight
to be given to each individual criterion is not fixed, but rather, must vary on a case-by-case basis, depending upon the facts of each case." Collier Med. Ctr., Inc. v. Dep't of Health & Rehabilitative Servs., 462 So. 2d 83, 84 (Fla. 1st DCA 1985).
An administrative hearing involving disputed issues of material fact is a de novo proceeding in which the Administrative Law Judge independently evaluates the evidence presented. Fla. Dep't of Transp. v. J.W.C. Co., Inc., 396
So. 2d 778, 787 (Fla. 1st DCA 1981); § 120.57(1), Fla. Stat.
The Agency's preliminary decisions on CON applications, including its findings in the SAAR, are not entitled to a presumption of correctness. Id.
Pursuant to the Agency's hospice rule need methodology, the Agency determined that there is no projected need for a new hospice program in Service Area 5B for the applicable planning horizon.
The statutory review criteria are set forth in Subsections 408.035(1)(a) through (j), Florida Statutes. As shown by the Findings of Fact herein, both HPH and Odyssey generally satisfy the criteria and either one of them could be approved if there was a numeric need under the FNP or if there was a showing of special circumstances warranting a new hospice.
That is, neither applicant had a fatal flaw in its CON application.
Subsection 408.043(2), Florida Statutes, provides:
HOSPICES. When an application is made for a certificate of need to establish or to expand a hospice, the need for such hospice shall be determined on the basis of the need for and availability of hospice services in the community. The formula on which the certificate of need is based shall discourage regional monopolies and promote competition. The inpatient hospice care component of a hospice, which is a freestanding facility, or a part of a facility, which is primarily engaged in providing inpatient care and related services and is not licensed as a health care facility shall also be required to obtain a certificate of need. Provision of hospice care by any current provider of health care is a significant change in service and therefore requires a certificate of need for such services.
There was no persuasive evidence presented at final hearing that Suncoast, as the only existing provider of hospice services in Pinellas County, was a regional monopoly. It is, like Odyssey, a large provider of hospice services, but there was no showing that it is a regional monopoly, per se.
Regarding the statutory review criteria set forth in Subsections 408.035(1)(a) through (j), Florida Administrative Code Rule 59C-1.0355(3)(b) states:
Conformance with Statutory Review Criteria.
A certificate of need for the establishment of a new hospice program, construction of a freestanding inpatient hospice facility, or change in licensed bed capacity of a
freestanding inpatient hospice facility, shall not be approved unless the applicant meets the applicable review criteria in Sections 408.035 and 408.043(2), F.S., and the standards and need determination criteria set forth in this rule. Applications to establish a new hospice program shall not be approved in the absence of a numeric need indicated by the formula in paragraph (4)(a) of this rule, unless other criteria in this rule and in Sections 408.035 and 408.043(2), F.S., outweigh the lack of a numeric need.
The publication of fixed need is not determinative, and creates a rebuttable presumption as to need. Here, the revised published need of zero creates a rebuttable presumption of no need. The applicants may present evidence to rebut the presumption and demonstrate special circumstances that warrant approval of a CON in the absence of published need. See Humhosco, Inc. v. Dep't of Health and Rehab. Servs., 476 So. 2d 258, 261 (Fla. 1st DCA 1985))(This was a hospital case wherein the court indicated that a lack of numeric need under the rule formula establishes a rebuttable presumption of no need); Humana, Inc. v. Dep't of Health and Rehab. Servs., 469 So. 2d 889, 891 (Fla. 1st DCA 1985), a hospital case; and Balsam v.
Dep't of Health and Rehab. Servs., 486 So. 2d 1341 (Fla. 1st DCA 1986) a hospital case.4
There being no numeric need for a new hospice in this case, HPH or Odyssey must establish the existence of special
circumstances, which are addressed in Florida Administrative Code Rule 59C-1.0355(4)(d), which states:
Approval Under Special Circumstances. In the absence of numeric need identified in paragraph (4)(a), the applicant must demonstrate that circumstances exist to justify the approval of a new hospice.
Evidence submitted by the applicant must document one or more of the following:
That a specific terminally ill population is not being served.
That a county or counties within the service area of a licensed hospice program are not being served.
That there are persons referred to hospice programs who are not being admitted within 48 hours. The applicant shall indicate the number of such persons.
AHCA interprets subsection (4)(d)(1) of the Rule to allow for the demonstration that the specific terminally ill population groups identified by HPH in its CON application are underserved populations, including: (1) patients residing in ALFs; (2) patients in need of continuous care; and (3) medically complex patients. This interpretation is not clearly erroneous and, therefore, must be followed. That is, HPH must be allowed to present evidence as to the identified groups and, if successful, to rely upon the lack of hospice services to those groups to warrant approval of a new hospice in Service Area 5B. However, the evidence provided by HPH at final hearing does not
establish the existence of terminally ill patients within the identified groups who are not receiving hospice services.
The special circumstances rule has been construed as follows:
The special circumstances rule requires applicants to demonstrate at least one of the three listed reasons for such circumstances. However, it does not prohibit applicants from showing that other "not normal circumstances" exists in the service area.
The special circumstances rule does not require an applicant to show that the needs of a specific population or a county are "unserved" or totally unmet. To the contrary, an applicant is entitled to show that an underserved population or that an underserved county warrant consideration as under the rule. [Emphasis added.]
See Hope of SW Fla. v. Agency for Health Care Admin., 2005 Fla. Div. Admin. Hear., LEXIS 745, *90-91; Case No. 03-4067CON,
(DOAH Jan. 24, 2005; AHCA May 5, 2005)(citing to Big Bend Hospice, supra, 2002 Fla.Div.Adm.Hear. LEXIS at *76-77).5
The Applicants did not meet the threshold of satisfying at least one of the three enumerated reasons warranting approval. Thus, other circumstances that might exist in Service Area 5B are not particularly relevant to this proceeding.6 HPH expended a considerable amount of time at final hearing and in its Proposed Recommended Order arguing that Suncoast misreported its admissions data, and thereby resulting
in an erroneous need determination by AHCA. Specifically, HPH argued that Suncoast double-counted some admissions and reported admissions differently than other hospice providers around the state. Those erroneous data, argued HPH, would result in a fixed need pool of one if they were corrected. However, those arguments, even if true, cannot now alter the existing fixed need pool of zero and are, therefore, outside the jurisdiction of the Administrative Law Judge in the present case. See Endnote 2.
No specific terminally ill population was shown not to have hospice services available to it. There was no showing that any ALF residents, medically complex patients, or patients receiving continuous care were terminally ill and were not being served.
There is only one county in the service area, thus, there are no counties within Service Area 5B that are not being served.
There is no proof that persons referred to hospice were not being admitted within 48 hours. There was no quantification of persons allegedly falling within this category. The concepts of "referral" and "admission" were not universally defined by the parties.
Impermissible Amendments to CON Applications
The parties claim that the applicants impermissibly amended their respective CON applications. For example, Odyssey claims that HPH offered evidence of several hospice services it intends to offer that were either not mentioned in the application or were only casually mentioned.
The alleged amendments do not materially change the respective applications or change the proposed program. The evidence presented by Odyssey and HPH is the type of evidence routinely presented to compare co-batched applicants and to respond to criticisms by a co-batched applicant and are not impermissible amendments. See generally Big Bend Hospice, Inc. v. Agency for Health Care Admin., 2002 Fla.Div.Admin.Hear. LEXIS at *76-81.
Consideration of the Statutory and Rule Criteria
Neither of the applicants has proven the existence of a special circumstance. However, on balance, HPH best satisfied the applicable statutory criteria due to its provision of hospice services in close proximity to Pinellas County, its exiting contacts with health care providers in Pinellas County, and its overall familiarity with Service Area 5B.
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that a final order be entered by the Agency for Health Care Administration denying the CON applications of HPH South, Inc. (No. 10066), and Odyssey Healthcare of Collier County d/b/a Odyssey Healthcare of Central Florida (No. 10068).
DONE AND ENTERED this 30th day of November, 2010, in Tallahassee, Leon County, Florida.
S
R. BRUCE MCKIBBEN Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 30th day of November, 2010.
ENDNOTES
1/ Unless specifically stated otherwise herein, all references to Florida Statutes will be to the 2009 codification.
2/ Lack of competition is not actually a special circumstance identified by rule, but Odyssey addresses it as such.
3/ Further, whether or not Suncoast made errors in reporting is not a special circumstance, but would more appropriately be addressed in a challenge to the FNP. A FNP challenge initiated for the batching cycle at issue in this proceeding was commenced by HPH and Odyssey, but the challenge was voluntarily dismissed.
4/ There have been instances when an Administrative Law Judge has considered "not normal" situations in a hospice case where there are no special circumstances shown. See Big Bend Hospice,
Inc. v. Agency for Health Care Admin., Case Nos. 01-0445CON and 02-0880CON (DOAH Nov. 7, 2002; AHCA March 18, 2003,), aff'd,
904 So. 2d 610 (Fla. 1st DCA 2005). However, in the rule challenge proceeding upholding the special circumstances rule, the ALJ expressly held: "The Rule [59C-1.0355(4)(d)] requires that an applicant for a "special circumstances" CON demonstrate the existence of any one of three factors." Hernando-Pasco Hospice, Inc. v. Agency for Health Care Administration, Case No. 01-4460RX (DOAH Mar. 17, 2003). HPH did not prove the existence of special circumstances; its reliance on possible
data reporting errors by Suncoast does not create a "not normal" situation.
5/ The use of the "not normal" terminology in this context is somewhat erroneous. That term appears in subsections (4)(b) and (4)(c) of the Rule 59C-1.0355 and actually addresses situations in which need has been found under the FNP, but there are other circumstances which may prohibit a new hospice program from being approved. The Rule does not specifically allow approval of a new program by way of "not normal" circumstances; rather, it prohibits approval in some instances.
6/ Even if the Agency or a review court determined that the applicants could rely upon "not normal" circumstances to establish a need, neither applicant in this case provided evidence to support a new hospice in Service Area 5B.
COPIES FURNISHED:
Thomas W. Arnold, Secretary
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
Justin Senior, General Counsel
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
Richard J. Shoop, Agency Clerk
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
Lorraine M. Novak, Esquire
Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431
Tallahassee, Florida 32308
Geoffrey D. Smith, Esquire Susan C. Smith, Esquire Corrine Porcher, Esquire Smith & Associates
2873 Remington Green Circle Tallahassee, Florida 32308
Paul H. Amundsen, Esquire Julia Smith, Esquire Ruden McClosky, P.A.
215 South Monroe Street, Suite 815 Tallahassee, Florida 32301
Mark A. Emanuele, Esquire Deborah S. Platz, Esquire Panza, Maurer & Maynard, P.A.
Bank of America Building, Third Floor 3600 North Federal Highway
Fort Lauderdale, Florida 33308
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 02, 2011 | Agency Final Order | |
| Nov. 30, 2010 | Recommended Order | Neither applicant for a CON proved the existence of special circumstances warranting approval of a new hospice in Service Area 5B. |
