AGENCY, INC. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above styled cases on 21 June 1928 at Tallahassee, Florida.
For Petitioner: Edward S. Jaffry, Esquire
For Respondent: Steven W. Huss, Esquire
For Intervenors: Gary L. Conover, Esquire
These cases involve the appeal from the denial of application of Homemakers Upjohn, Petitioner, for certificates of need to establish Home Health Care Agencies in West Palm Beach and Boca Raton, Florida. Inasmuch as the same parties and issues are involved in both applications the petitions were consolidated for hearing and the evidence presented was admitted as applicable to both petitions.
Intervenors' Petitions to Intervene filed 19 June 1978 were granted at the hearing and Intervenors' Motions for Continuances were denied. The parties stipulated that Emergency Rules 10 ER-77.10-12 Florida Administrative Code were filed with the Secretary of State on July 25, 1977 and remained effective until October 27, 1977; and that Exhibit 14, a Health Planning Council Planning Document dated July 28, 1977 was never filed with the Secretary of State as a rule or as a proposed rule. Thereafter 4 witnesses were called by Petitioner, 9 witnesses were called by the Respondent and 18 exhibits were admitted into evidence.
Petitioner, Homemakers Upjohn, is the trade name of Homemakers International Co., a wholly owned subsidiary of Home and Health Care Services, Inc. which in turn is wholly owned by the Upjohn Company.
Petitioner has been providing home health care services through its offices in West Palm Beach and Boca Raton to private patients for several years. No question was raised with respect to its competence to provide the services proposed. Petitioner proposes to continue to serve private patients and to serve Medicare patients and any others for which it receives compensation.
By applications dated August 24, 1977 (Exhibit 4) Petitioner requested the issuance of Certificates of Need from Respondent which were required for licensure. After the receipt of additional information the applications were referred to Health Planning Council Inc., the health systems agency for Palm Beach County, for review and recommendation.
At the Council meeting on 27 October 1977 the applications were considered with the Staff Report (Exhibit 7) which contained the various factors supporting disapproval of the certificates of need, and the Council voted to disapprove the applications 20 to 0 with 2 abstentions and 8 members absent.
The factors noted by the Council in support of disapproval of Certificate of Need were:
The recent plan adopted by the Council indicates a need for five (5) agencies to serve Palm Beach County. There are presently five agencies licensed to serve the county.
The existing agencies have not reached an "optimum monthly census necessary for
efficient operation, therefore, the addition of a new agency cannot be justified at this time and would only duplicate existing services and increase the indirect costs associated with
the delivery of home health care.
The proposal does not meet the Council's criteria of a minimum of five (5) services for home health agencies.
The proposal does not indicate whether Homemakers Upjohn will accept patients regardless of ability to pay, a criteria adopted by the Council.
At the time Petitioner's applications wore submitted to tie Council, Emergency Rules 10 ER-77.10-12 were in effect and provided generally that a
certificate of need would be granted based upon a computation of the number of home health care agencies needed using as part of the equation the assumption that 4 percent of the patients discharged from hospitals enter a home health care agency. Applying this assumption would lead to a determination that 8 home health care agencies are required in Palm Beach County.
The model developed and used by the Council in determining the number of home health care agencies required in their area of concern was based upon a patient origin study in the five-county area showing 2.5 percent of all hospital dischargees are admitted to home health care. Applying this percentage instead of 4 percent provided by the Emergency Rule resulted in a determination that only five home health care agencies are required in Palm Beach County.
At the time of the application five home health care agencies were in operation in Palm Beach County. Two additional agencies, which previously existed, had been closed due to lack of patients. Evidence presented at the hearing was that six home health care providers are currently operating in Palm Peach County.
Criteria also contained in the Planning Document (Exhibit 14) included the provision that a home health care agency should provide, at a minimum, five of the following health related services:
Nursing care - RN and LPN Home Health Aide
Physical Therapy Speech Therapy Occupational Therapy Nutritional Guidance
Medical Social Services
In its application Petitioner proposed to provide RN, LPN, Home Health Aide, Homemaker, and Companion services although it professed to have the capability of providing the various therapies listed by the Council, when and if, required.
It is noted that the Council's action to recommend denial of the certificate of need to Petitioner took place on 27 October 1977 the same date the parties stipulated that the emergency rules expired. Since the rules were filed with the Secretary of State on 25 July 1977, became effective on that date (Exhibit 16) and were valid for only 90 days (Section 120.54(9)(c) Florida Statutes) it would appear that these rules expired on 3 October 1977, a date preceding the action taken by the Council. However, this factor is not relevant to Petitioner's position that the law applicable to its obtaining a certificate of need is the law in effect on the date its application for a certificate of need was filed.
In accordance with standard procedures the recommendation to deny Petitioners application for certificates of need was forwarded by Health Planning Council Inc. to Respondent on December 7, 1977 listing the factors noted above as reasons for denying the app1ication.
On 1 November 1977 the Emergency Rules had been replaced with permanent Rules 10-5.11(14)(a) Florida Administrative Code. This latter rule provided generally that a certificate of need cannot be issued with the daily census of the existing home health care agencies in the service area reached an average of 300 patients.
At the time of the hearing six home health care agencies were operating in Palm Beach County. The Visiting Nurses Association of West Palm Beach is a non-profit community supported agency which serves some 786 patients daily. In addition to serving Medicare patients they provide services to indigents.
A-Association Home Health Agency, Lake Worth, is a home health agency serving some 100 patients daily including many Medicare patients.
Visiting Readi-Nurse is the newest home health agency in Palm Beach County. Its last quarterly census shows that 37 patients, including medicare patients, are served daily.
Gold Coast Hone Health Services is a licensed home health care agency in Palm Beach County serving Medicare patients and has a quarterly census of 48-
50 patients per day.
Unicare Palm Beach Inc. is a home health care agency licensed in Palm Beach County serving Medicare patients and serves some 68-70 patients daily.
Community Home Health Services is licensed in Palm Beach County and serves some 43 patients daily.
Granting a certificate of need to Petitioner would allow Petitioner to obtain licensure and thereby qualify to serve Medicare patients presently served by existing home health care agencies. This could reduce the number of Medicare patients served by these agencies thereby increasing their administrative costs per patient and increasing the cost of services provided to home health care patients.
The present average daily census of patients in Palm Beach County is approximately 180 per agency and if the patients served by Palm Beach Visiting Nurses Association is deducted the remaining 5 home health care agencies average less than 60 patients per day.
Petitioner contends that the criteria applied by Respondent in denying the certificate of need on December 9, 1977 was incorrect and that its application must be determined pursuant to the Emergency Rules which were in effect at the time the application was filed. Petitioner also contends that the Planning Document (Exhibit 14) used by the Health Planning Council is a rule, and since it was not properly promulgated, is invalid.
Respondent reviewed the recommendations of the Council in accordance with the criteria contained in Rule 10-5.11(14) Florida Administrative Code. Respondent further contends that the Planning Document (Exhibit 14) is not a rule.
Petitioner presented no evidence remotely tending to show that patients in the service area were unable to obtain necessary home health care services from existing providers. The only evidence presented was that Petitioner was capable of providing the services proposed; that it met the criteria in the Emergency Rules; and, if the need for additional services was subsequently found to exist, it could provide these additional home health care services.
Intervenors proposed findings of fact not incorporated in the above findings were deemed irrelevant to the results reached or were not concurred in.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and issues here involved.
Petitioner's primary emphasis on its entitlement to a certificate of need is that when its application was filed the emergency rules were in effect and control the disposition of this case. Emergency Rule 10-5.11(14)(a) Florida Administrative Code provided in pertinent part:
A certificate of need for the establishment of a new home health agency will be granted when the need for such agency is clearly demonstrated by the following procedure. On a county by county basis, the member of home health agencies necessary to meet the needs of the population shall be determined in the following manner:
Step 1. Determine the admission rate to home health agencies under the premise that 4 percent of patients discharged from hospitals enter a home health agency and a like number of patients from non-hospital sources, by [formula]
Following these steps, using the assumptions provided, and applying the formula to Palm Beach County population resulted in a conclusion that eight home health care agencies are required. Since this formula existed at the time of Petitioner's filing of its application, Petitioner contends that it is entitled to a certificate of need regardless of other factors used in determining need for a home health care facility.
The 2.5 percent figure provided in Exhibit 14, instead of 4 percent as provided in the Emergency Rules, was obtained from a survey of the hospital dischargees in the five county area under the jurisdiction of Health Planning Council Inc. and this percentage was used by them in evaluating Petitioner's application for a certificate of need.
As grounds for its position that the law at the time of the application controls, Petitioner cites numerous cases involving applications for licensure where the courts held that the rules applicable for determining an applicant's qualifications for licensure were those in existence at the time of the filing of the application. However, those cases are distinguishable from the instant situation in that those applicants had to demonstrate only qualifications; the applicant here has to demonstrate need. No question was raised in this instance regarding Petitioner's qualifications to provide the health care proposed. The only question was whether a need existed for Petitioner's proposed services.
Section 38.494 Florida Statutes establishes the requirements for issuance of certificates of need. Among other things it provides that initial review of any application shall be conducted by the health systems agency, which in this case was Health Planning Council Inc. The health systems agency, as defined in Section 381.493(3)(h) Florida Statutes
means a comprehensive health planning council consisting of a majority of consumers of health services and providers of health services, broadly representing the area wide health system, as described and approved under all federal, state and departmental rules and
regulations and identified in Public Law 93-461
Accordingly Health Planning Council Inc. does not appear to be an agency as that term is defined in Section 120.52(1) Florida Statutes since it is not a state department, commission, regional planning agency, board, or any other unit of government of the state.
Section 381.494(5) Florida Statutes defines the functions of the health systems agency and provides, inter alia, that in reviewing applications for certificate of need the health systems agency shall consider:
The need for health care facilities and services being proposed in relation to the applicable health systems plan, annual implementation plan, and state medical facilities plan. . .
The availability, accessibility, extent of utilization, and adequacy of like and existing health care services in the applicant's health service area.
8. The immediate and long-term financial feasibility of the proposal.
At the time the health systems agency reviewed the application of Petitioner it had adopted a plan in accordance with the above quoted provisions of the statute. Therein (Exhibit 14) was provided that home health care agencies should provide a minimum of five of the services as noted in the findings of fact above and should have a policy of providing comprehensive home health services to all persons, without regard to age, race, sex, national origin, financial status or religion.
Petitioner's contention that this plan is invalid because it was not promulgated as a rule in accordance with Section 120.54 Florida Statutes is without merit since the health systems agency is not a governmental agency as defined in Chapter 120.
However, even if this plan is a rule as defined in Chapter 120 and invalid because it was not promulgated in accordance with the procedures required by Chapter 120, Petitioner would not qualify for the issuance of a Certificate of Need because the rule in effect at the time of the instant hearing controls the need determination.
At the time the application was presented to Respondent to make the final determination regarding the issuance of a certificate of need, Rule 10- 5.11(14)(a) Florida Administrative Code had been in effect for more than 30 days and provided in pertinent part:
A Certificate of Need for a proposed new home health agency or subunit cannot be issued until the daily census of the existing home
health agencies or subunits providing services within the health services area of the proposed new home health agency or subunit reached an average of 300 patients, in the aggregate, for the immediate preceding calendar quarter unless the need for the proposed new home health agency or subunit can be demonstrated by the application of the mitigating and extenuating circumstances in Rule 10-5.11(14)(b) herein.
No evidence was presented to bring Petitioner within the ambit of extenuating circumstances as there defined.
The burden of proof to establish need is on the Petitioner. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla 1 DCA 1977). Absent strong evidence of need for the services proposed, the requirement that existing agencies must serve an average of 300 patients daily before another is certified precludes the issuance of a Certificate of Need to Petitioner.
From the foregoing it is concluded that Petitioner has failed to establish by a preponderance of the evidence that it is entitled to a Certificate of Need; that the criteria for determining need in this case are those in existence at the time of the hearing; and that the action of Respondent in denying the Certificate of Need to Petitioner was proper. It is therefore
