STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF: )

Application of Frank B. Smith, ) Jr., Chairman Board of County, ) Commissioners, Polk County, )

Post Office Box 60, Bartow, ) CASE NO. 77-144 Florida 33830. )

)

Applicant. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, held a public hearing in this case on February 28, 1977 in Bartow, Florida.

The following appearances were entered: Ervin Cowie, and Carolyn Fulmer, Bartow, Florida for the Petitioner, Board of County Commissioners of Polk County, Florida; and Douglas E. Whitney, Tallahassee, Florida, for the Respondent, Office of Community Medical Facilities of the Florida Department of Health and Rehabilitative Services.

In October, 1976, the Polk County Board of County Commissioners ("Petitioner" hereafter) submitted a request for certificate of need to the South Central Florida Health Systems Council, Inc., and to the Office of Community Medical Facilities of the Florida Department of Health and Rehabilitative Services ("Respondent" hereafter). The Petitioner is seeking to construct and operate a 180-bed nursing home in Winter Haven, Florida. At a meeting of the South Central Florida Health Systems Council, Inc., the Council voted not to recommend the issuance of a certificate of need. By letter dated December 30, 1976, the Respondent advised the Petitioner that its proposal was not favorably considered. By letter dated January 24, 1977, the Petitioner requested a formal hearing. The final hearing was scheduled by notice dated January 27, 1977.

At the final hearing the Petitioner called the following witnesses: Lance William Anastasio, the Administrator of Winter Haven Hospital; Hal Conner, Counsel for Winter Haven Hospital; Alan Downard, the Respondent's Research Supervisor for the Planning Department; Marvin Brice, Director of the Respondent's Division of Social Services and Rehabilitation; Frank Smith, the Respondent's Chairman; and Mamie J. Drummond, an employee of the Respondent who is charged with placing nursing home patients. The Respondent called the following witnesses: Ray Chambliss, a medical facilities specialist employed by the Respondent; and Richard E. Morrison, the nursing home administrator for Kennedy House in Lakeland, Florida. Two members of the general public appeared at the hearing for the purpose of making statements. They were T. J. Del Rosso, the President of the Florida Nursing Home Association; and John M. Jenkins, the vice president of a company which operates a nursing home in Winter Haven, Florida. Hearing Officer's Exhibits 1-3, Petitioner's Exhibits 1-6, Respondent's Exhibit 1, and Public Exhibit 1 were offered into evidence at the

hearing and were received. The parties have submitted Post-Hearing Memoranda of Law.

FINDINGS OF FACT

1. The Petitioner desires to construct a 180-bed nursing home facility. The proposed facility was originally conceived by the Winter Haven Hospital. The hospital was seeking to construct the facility adjacent to its present location. The hospital planned to utilize Federal Economic Development Agency funds to finance the construction. Under Federal regulations, Economic Development Agency funds are not available to a private hospital, but are available to local governmental units. The Petitioner agreed to seek the certificate of need, to apply for Economic Development Agency funds, and to construct the facility. After construction it is the Petitioner's plan to contract with the Winter Haven Hospital to operate the facility.

   
   

2. Petitioner's request for certificate of need was forwarded to the South Central Florida Health Systems Council, Inc., and to the Respondent. The Health Systems Council, by a seven to six vote, recommended to the Respondent against the issuance of a certificate of need. The Council's written recommendation to the Respondent was never forwarded to the Petitioner, or to the Winter Haven Hospital. The Respondent denied the request for issuance of certificate of need by letter dated December 30, 1976. The Respondent's denial was based upon a mechanical application of the Florida State Plan for Construction of Hospitals and Related Medical Facilities. The sole basis for the denial was that in accordance with population figures set out in the State Plan, and in accordance with the application of a Federally required formula to the population figures, there is no need for the additional nursing home beds proposed by the Petitioner. No independent determination was made by the Respondent as to actual needs for nursing home facilities that might exist in Polk County.

   
   

3. In the Florida State Plan for Construction of Hospitals and Related Medical Facilities, it was determined that 252 additional long-term care beds were needed in Polk County. At the time that the plan was promulgated, Kennedy Center, a new nursing home facility located in Lakeland, Florida, was not actively under construction. Since the plan was adopted, active construction of the Kennedy Center has commenced. At the time of the hearing 120 beds had been opened and made available at the Kennedy Center, and an additional 120 beds were being constructed. When the Kennedy Center is considered, there remains a need of only 12 additional long-term care beds in Polk County. Obviously the Petitioner's proposed 180-bed facility would greatly exceed the need envisioned in the State Plan.

   
   

4. Petitioner offered evidence in the form of a publication of the Bureau of Economic and Business Research at the College of Business Administration, University of Florida, which indicates that the population of Polk County is somewhat higher than that set out in the State Plan (Petitioner's Exhibit 3). If these population figures, rather than those set out in the State Plan were utilized, there would remain a need for 252 long-term care beds in Polk County, even after construction of the Kennedy Center (Petitioner's Exhibit 5). There is no means of determining from the evidence whether the population figures submitted by the Petitioner are more or less accurate than those set out in the State Plan.

   
   

5. Petitioner offered evidence that it has had difficulty placing certain classes of patients in nursing home facilities. This difficulty in fact prompted the Petitioner to seek a certificate of need for a new nursing home

   facility. Petitioner takes the responsibility for placing indigent persons in need of nursing home care. The State Medicade Program contributes the bulk of the cost of the care. Three categories of nursing home care are identified for Medicade purposes. These are "skill care", "intermediate I" and "intermediate II" patients. Skill care patients are the most infirm, and intermediate II care patients are the least infirm. The Medicade program allots more money for skill care patients than it does for intermediate care patients. Because of this private nursing home facilities often reject intermediate care patients in favor of skill care patients. The Petitioner has accordingly experienced difficulty in placing indigent intermediate care patients. The Petitioner has had to place

   86 patients in nursing home facilities outside of Polk County.

   
   

6. The opening of the Kennedy Center will alleviate most of the placement difficulties that the Petitioner has experienced. Approximately 100 beds at the Kennedy Center will be available for "intermediate II" patients. In addition, the operator of the "Grovemont Home" in Winter Haven, Florida, appeared at the hearing and stated that his facility would accept Medicade intermediate care patients, and that they are not running at full capacity. The Petitioner had not previously been placing Medicade patients in the Grovemont Home.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to this action, and over the subject matter. Florida Statutes Section 120.57(1).

   
   

8. Issuance of certificates of need in Florida is governed by the "Health Facilities Planning Act", Sections 381.493-381.497, Florida Statutes (1975). The Bureau of Community Medical Facilities Planning of the Department of Health and Rehabilitative Services is responsible for issuing certificates of need. Section 381.494(6)(a) provides:

   
   

   "The Bureau [Bureau of Community Medical Facilities Planning] shall be designated as the single state agency to issue certificates of need in accordance with present and future federal, state, and departmental rules and regulations."

   
   

   In issuing certificates of need, the Respondent is governed not only by the provisions of the Florida Health Facilities Planning Act, but also by the provisions of Section 1122 of the Federal Social Security Act. In accordance with an agreement executed between the Secretary of the Federal Department of Health, Education and Welfare, and the State of Florida, the Respondent is the "Designated Planning Agency" for the purpose of carrying out the provisions of the Federal act. In accordance with the terms of the Federal Act, the Agreement, and the Florida Statute, the Respondent is governed by federal rules and regulations in issuing certificates of need. These rules and regulations are set out in part in a "DPA" manual which was received in evidence at the hearing as Respondent's Exhibit 1. In Part VI of the manual which relates to hearings on certificate of need applications it is provided:

   
   

   "The primary purpose of the fair hearing process is for the hearing officer to determine whether the proposed expenditure is consistent with the standards, criteria, and plans specified in the statute. The

   correctness, adequacy, or appropriateness of the standards, criteria, and plans against which the proposed expenditure was measured are not matters for consideration at the hearing.

   
   

9. Federal policy memoranda have established that Federal Bureau of Census population statistics should be utilized in adopting the plan. The Respondent receives these figures from the federal authorities and forwards them to the University of Florida for a breakdown by county. Under the federal rules it is apparent, that even if the population figures utilized in the State Plan are inaccurate, and might therefore show a lack of need where an actual need exists, the Respondent is nonetheless compelled to utilize the figures in certificate of need proceedings. In the instant case, this possibly absurd result is of no concern since the Petitioner has failed to establish that the population figures in the State Plan are other than accurate. The only evidence offered in support of the contention that the figures in the State Plan are not accurate are documents which were not authenticated at the hearing, and which under the evidence may or may not be more accurate than the Bureau of Census figures.

   
   

10. The Petitioner's request for a certificate of need for Winter Haven Nursing Home, Inc. should be denied.

RECOMMENDED ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED:

That the request of the Polk County Board of County Commissioners for issuance of a certificate of need for Winter Haven Nursing Home, Inc., be denied.

RECOMMENDED this 5th day of April, 1977, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

COPIES FURNISHED:

Ervin Cowie, Esquire Douglas E. Whitney, Esquire Resident County Attorney AND State of Florida Department of Carolyn Fulmer, Esquire Health and Rehabilitative Services Assistant County Attorney District VII Office

Post Office Box 60 1350 N. Orange Avenue Bartow, Florida 33830 Winter Park, Florida 32789

Docket for Case No: 77-000144

Orders for Case No: 77-000144