STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UPJOHN HEALTHCARE HOME HEALTH ) AGENCY, )
)
Petitioner, )
)
vs. ) CASE NO. 79-1747
) STATE OF FLORIDA, DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings, beginning at 10:00 am. (Central Daylight Saving Time), September 27, 1979. This case was presented as a part of a consolidated hearing in which the above-styled case was heard Simultaneously with the case of Personnel pool of Pensacola, Inc., d/b/a Medical Personnel Pool, Petitioner v. State of Florida, Department of Health and Rehabilitative Services, Respondent, D.O.A.H. Case 79-1748. Although the hearing in this matter and the case of Personnel Pool of Pensacola, Inc. were consolidated for hearing, separate orders are being entered. Those aspects of the consolidated presentation which would have application to THE two cases will be reflected in each order. This approach to entering Recommended Orders in this cause and in the companion case has been utilized to facilitate entry of final orders directed to the individual requests for certificates of need filed by the petitioners in the case at issue and in the companion case, while effectively complying with the requirements for comparative hearing between the prospective competing applicants for certif icate of need. See Biomedical Applications of Clearwater, Inc. v. Dept. of Health and Rehabilitative Services, Office of Community Medical Facilities, 370 So.2d 19 (Fla. 2d DCA).
This Recommended Order is being entered within thirty (30) days of the date of receipt of the transcript, that receipt date being October 16, 1979.
APPEARANCES
For Petitioner: Vivian Krumel, R.N.
Service Director
Upjohn Healthcare Services
15 West Strong Street Old Townhouse Square
Pensacola, Florida 32501
For Respondent: Charles T. Collette, Esquire
Assistant General Counsel Department of Health and
Rehabilitative Services
1323 Winewood Boulevard, Suite 406
Tallahassee, Florida 32301
For Personnel Sherrill E. Phelps
Pool of Governmental Affairs Representative of Pensacola: Personnel Pool of America, Inc.
303 Southeast 17th Street
Fort Lauderdale, Florida 33316 ISSUE
Is the Petitioner, Upjohn Healthcare Home Health Agency, entitled to a certificate of need to be issued by the Respondent, State of Florida, Department of Health and Rehabilitative Services. The application for such certificate, at the time of hearing was a request to provide home health care for all patients on a 24-hour a day basis in a service area of Escambia, Santa Rosa and Okaloosa Counties, Florida.
As stated above, there is pending an application for certificate of need by Personnel Pool of Pensacola, Inc., d/b/a Medical Personnel Pool, as considered in DOAH. Case No. 79-1748. That application requests the right to operate and offer similar services to that of the current Petitioner and to operate and offer those services in Escambia County, Florida. Consequently, should the determination be made that there is a need for one additional servicing unit it would be necessary to decide which of the the current applicants would be entitled to the certificate of need. This Recommended Order discusses and resolves the contingency set out in this second point of the issue statement.
FINDINGS OF FACT
On December 18, 1978, the Petitioner, using the name "Upjohn Healthcare Services, Inc." filed its application for certificate of need with the Florida Panhandle Health Systems Agency, Inc. This application was deemed complete on April 20, 1979. The application as originally filed indicated that healthcare services were to be made available on a 24 hour a day basis, seven days a week, with an admission criteria based on the patient's need for home health care, his ability to make available financial resources and the Petitioner's ability to provide the services required. Services were to be provided from a central location in Pensacola, Florida, which is in Escambia County, Florida; to serve Escambia, Santa Rosa and Okaloosa Counties, Florida. The application was subsequently amended to indicate the willingness of the Petitioner to aid Medicare and Medicaid patients in the named counties.
The Petitioner, hereinafter referred to as "Upjohn", operating as Upjohn Healthcare Services, Inc., is a subsidiary of the Upjohn company, having forty-Seven certified home health agencies in the United States. The organization has twenty-one offices in the State of Florida and one of those offices is located in Pensacola, Florida. The State of Florida, Department of Health and Rehabilitative Services, is an agency of the State of Florida charged with the duty to evaluate the applications for certificate of need and to issue such certificates as would be appropriate under the terms of Chapter 381, Florida Statutes, and Rule 10-5, Florida Administrative Cede. This application
for certificate of need and that of the companion case of Personnel Pool of Pensacola, Inc., d/b/a Medical Personnel Pool, hereinafter referred to "Personnel Pool", are also considered in accordance with the Health Systems plan for the Florida Panhandle effective December 15, 1978. A copy of that document may be found as the Joint Exhibit No. 2 admitted into evidence.
The project review committee of the Northwest Florida District recommended to the Northwest Florida Subdistrict Advisory Council that the certificate of need be granted and this action was taken on May 2, 1979. A public hearing was held on May 8, 1979, and on Nay, 17, 1979, the Northwest Florida Subdistrict recommended the disapproval of the project. This disapproval followed a staff report by the staff of the Florida Panhandle Health Systems Agency which suggested that the certificate of need be denied.
The application was then presented to the Regional Council, Florida panhandle Health Systems Agency, Inc., and on May 25, 1979, the Regional Council recommended the approval of the certificate of need to serve Escambia, Santa Rosa and Okaloosa Counties, Florida, with the proviso that services be offered Medicare and Medicaid patients.
On June 29, 1979, the Respondent in the person of Art Forehand, Administrator of the Office of Community Medical Facilities, attempted to apprise the Petitioner that the request for a certificate of need had been denied; however, this correspondence was misaddressed and it was not until July 9, 1979, that a letter was forwarded to an official of Petitioner's organization and received by that official. On July 31, 1979, the Petitioner appealed the decision of denial of the certificate of need and the case was later assigned to the Division of Administrative Hearings for consideration which resulted in the hearing which is the subject of this Recommended Order.
(The details of the various items discussed in developing the chronology of this application may be found in the Joint Composite Exhibit No. 1 admitted into evidence.)
In offering its proof to demonstrate the entitlement to a certificate of need, the Petitioner essentially attempted to refute the Department of Health and Rehabilitative Services', hereinafter referred to as "Department", letter of notification of denial. That letter gave five reasons for denying the certificate of need, those reasons being:
The proposed project is inconsistent with the Florida Panhandle Health Systems Agency 1979 Health Systems Plan policy guide
regarding physical location of a home health agency in the area it intends to serve.
The proposal is not consistent with standards and criteria established in Chapter 10-5.11(14), Rules of the Department of Health and Rehabilitative Services.
Extenuating and mitigating circumstances which may be considered in approving a certificate of need for a new home health agency have not been adequately demonstrated.
There are other available and adequate home health care service providers in the proposed service area which could serve as an alternative to the proposed project and
prevent unnecessary duplication of resources.
Financial feasibility data do not clearly reflect the inclusion of Medicare and Medicaid resources.
The initial reason for denial deals with the claim that the Health Systems Plan for the Florida Panhandle, adopted December 15, 1978, does not allow service of three counties from one central office in Pensacola, Florida. The disputed language in that document is found in Chapter IV at page 216, and it states:
No home health agency may be issued a license to operate in a Florida county without having applied for and been granted a certificate of need. The Office of Community Medical Facilities of the Department of Health and Rehabilitative Services considers the recommendation of the Health Systems Agency and established criteria in determining need.
Certificates are now issued for a single-county service area, but prior to
legislation passed in 1977, an agency could obtain a certificate for several counties. This inconsistency has created considerable confusion in determining need.
Although the comment in the document is reluctantly made, it does establish the necessity for the issuance of certificates of need for single-county service areas. This determination is reached, notwithstanding the Petitioner's argument that there is existing precedence for serving more than one county out of a single office. Although there are circumstances in Florida where this approach has been utilized, such service of a multi-county area from a single office would not be allowed on the occasion of the current application.
The second reason for denying the certificate of need involves Rule 10- 5.11(14), Florida Administrative Code, which states:
(14)(a) A Certificate of Need for a proposed new home health agency or subunit shall not be issued until the daily census of each of the existing home health agencies or subunits providing services within the health service area of the proposed new home health agency or subunit has reached an average of 300 patients for the immediate preceding calendar quarter unless the need for the proposed new home health agency or subunit can be demonstrated by application of the mitigating and extenuating circumstances in rule
10-5.11(14)(b) herein.
(b) Mitigating and extenuating circumstances which must be met for the department to issue a certificate of need for a proposed new home health agency or subunit even though the previously described need determination procedure does not clearly indicate need are:
Documentation that the population of
the proposed service are is being denied access to home health care services in that existing home health agencies or subunits within the proposed service area are unable to provide service to all persons in need of home health care, or
Documentation that approval of such proposed new home health agency or subunit would foster cost containment for all providers in the health service area.
The Petitioner, in the course of this presentation, took issue with the survey method used by the employee who conducted the staff review of the application. Upjohn claimed that the data gathered on the question of the requirement for a
300 average daily patient census was incomplete and inaccurate. The Petitioner also questioned whether the rule as cited above could be followed in this hearing or should the prior rule which spoke in terms of the daily census of the aggregate of the existing home health agencies or subunits in determining the count of 300 patients be used. The current rule became effective on June 5, 1979, and that rule has application because it was effective at the time of this hearing.
Turning again to the question of the formula in deriving the number of patients in the census of the proposed service area, even assuming incompleteness or inaccuracies in the staff evaluation performed by the Health System Agency, the proof offered by the Petitioner in the bearing does not show utilization in excess of the 300-patient census.
There are two health agencies now delivering home health care in Escambia County. Northwest Florida Home Health Agency, Inc., is one of those agencies and in its last complete reporting quarter prior to the hearing, there is an indicated patient census for April, which was 71; for May it was 77; and for June it was 73, totaling 221 patients, thereby constituting an average census of 74. This statement of census was established through the testimony of Arthur Long, Executive Director of Northwest Florida Home Health Agency, Inc. (His organization serves only patients who are enrolled with his service group.)
Ms. Marian Humphrey, a public health nursing supervisor for the Escambia County Health Department, established the census in Escambia County for that Health Department as serviced by the Visiting Nurses Association, Inc. Beginning in January, 1979, the census was 101 Medicare patients; 14 Medicaid patients; 2 CHAD-PUS patients; 9 private patients and 71 free patients, the latter category being patients who do not pay for services. In February, 1979, there were 164 Medicare patients; 16 Medicaid patients; 2 CHAMPUS patients; 7 private patients and 72 free patients. In March, 1979, there were 128 Medicare patients; 9 Medicaid patients; 2 CHAMPUS patients and 11 private patients. In April, 1979, there were 147 Medicare patients; 13 Medicaid patients; 2 CHAMPUS patients and 9 private patients. In May, 1979, there were 165 Medicare patients; 12 Medicaid patients; 3 CHAMPUS patients; 7 private patients and 88 free patients. In June, 1979, there were 148 Medicare patients; 10 Medicaid patients; 2 CHAMPUS patients; 10 private patients and 61 free patients. In July, 1979, there were 150 Medicare patients; 10 Medicaid patients; 2 CHAMPUS patients; 10 private patients and 77 free patients. In August, 1979, there were
134 Medicare patients; 11 Medicaid patients; 2 CHAMPUS patients; 14 private patients and 96 free patients.
The above-cited statistics demonstrate that the two current servicing agencies in Escambia County, Florida, in the preceding full quarter of 1979 which would have been April, May and June, considered separately do not exceed the average of 300 patients for that calendar quarter, nor did the statistics show excess of 300 in other reported quarters.
By its Exhibit No. 8, the Petitioner presented statistics on the patient census in Okaloosa County and Santa Rosa County. These statistics were gathered by Blue Cross of Florida.
The statistics of the Blue Cross survey show the patient Census services rendered by the Okaloosa County Health Department. These statistics only deal with the years 1977 and 1978 and are, therefore, not current. The most recent quarter in the report on Okaloosa County Health Department shows that in the last quarter of 1978, in-October the patient census was 9; November, the patient census was 14, and in December the patient census was 21. There is a provision in the Blue Cross report which deals with the Northwest Florida Home Health Agency, Inc.; however, these findings of fact defer to the testimony of Mr. Long which showed that in 1979, there was a patient census in April of 36; in May, a patient census of 38 and in June, a patient census of 40, for an average census of 38.
The Blue Cross report shows that Santa Rosa County Health Department is the only home health care provider in that county. The most recent census reflected in that report is for January, February and March of 1979. In January the patient census was 41, in February the patient census was 35, and in March the patient census was 33.
Analyzing this statistical data provided dealing with Okaloosa and Santa Rosa Counties, although some of the information is not current, it does demonstrate that the census did not exceed the average of 300 patients for the quarters that were reported in either county.
In closing out an examination of the discussion of point 2 of the reasons for denial, it is noted that the Blue Cross report deals with the patient census of the Escambia County Health Department but this report is not as current as the presentation by Ms. Humphrey and the Humphrey report is accepted in lieu of the Blue Cross report.
Reason 3 for denying the certificate of need talks about the failure of the Petitioner to demonstrate extenuating and mitigating circum stances which would allow a certificate to be issued, notwithstanding the fact that the current service agencies do not exceed the average census of 300 patients for the calendar quarter. Again, that provision of Rule 10-5.11(14)(b), Florida Statutes, states:
Mitigating and extenuating circumstances which must be met for the department to issue a certificate of need for a proposed new home health agency or subunit even though the previously described need determination procedure does not clearly indicate need are:
Documentation that the population of the proposed service area is being denied access to home health care services in that existing home health agencies or subunits within the proposed service area are unable to provide
service to all persons in need of home health care, or
Documentation that approval of such proposed new home health agency or subunit would foster cost containment for all providers in the health service area.
The first provision under that subsection deals with the inability of the existing health agency to provide services to persons in need of home health care.
In examining the question of the ability of the current organizations to provide the necessary health care, Escambia County will be reviewed first.
In Escambia County, the Northwest Florida Home Health Agency, Inc., requires that their patients be registered with the organization and their office is open Monday through Friday from 8:00 a.m. to 4:00 p.m. After 4:00 p.m. on weekdays and on the weekends, a registered nurse is on call through the utilization of a "beeper" system. These services only apply to Medicare patients enrolled with the organization. To be enrolled it is necessary for the enrollment to have been achieved through a request by a physician.
The Escambia County Health Department is open from 8:00 a.m. to 4:30
p.m. Monday through Friday and serves all classes of patients. There are on- call nurses who work on weekends. The nurses are called by the utilization of the Nurses Directory for Escambia County. The exception to these statements is that two days a year the services of the Escambia County Health Department are not available due to holidays. At night during the week those persons who are patients of the Escambia County Health Department are instructed to arrange for emergency treatment in the Emergency Room or ambulatory care at West Florida Hospital, assuming those patients cannot wait until the following morning for attention.
Northwest Florida Home Health Agency, Inc., services Okaloosa County from an office in Fort Walton Beach, Florida. The exact nature of those services is as set out in the discussion of the services provided to patients in Escambia County.
The exact details of other current services offered in Okaloosa County and Santa Rosa County were not presented by the Petitioner. Consequently, it was not possible to determine whether those services are adequate.
The only evidence that touched on the issue of adequacy of services was testimony offered by one Ruby Savage, who is a volunteer member of the Regional Board of the Northwest Florida Subdistrict Council and a participant in project reviews. She stated that in her opinion there was a need for 24-hour service in Santa Rosa County. This testimony standing alone was insufficient to identify the need for further home health care services.
The Petitioner has asserted that the services spoken of in the preceding paragraphs are not sufficient and examples of the lack of available services, according to the Petitioner, are shown on pages 65 through 68 of the transcript of the hearing. Therein are cited several examples of persons unable to receive necessary care of the type which the Petitioner desires to deliver. These examples are accounts given by Ms. Krumel from information purportedly given to her on the subject of the lack of service. Ms. Krumel in the course of the hearing made further comments to the effect that the individuals involved in the project review felt that the services in the question area were
insufficient. Those opinions, while they may be true, are not the quality of evidence needed to sustain the Petitioner's contention that there is a need for further health care service in the area in question. The Petitioner made no further presentation on the question of lack of service and on balance the Petitioner has failed to show lack of service.
The Petitioner offered testimony on the possibility of the utilization of population increases in the area as a criterion for increasing home health care services. While this criterion formerly appeared in Rule 10-5.11(14)(b), Florida Administrative Code, under the provisions of extenuating and mitigating circumstances, it is not found in the current statement of that rule and may not be used as a criterion for gaining the certificate of need.
In discussing the issue of cost containment as outlined in the above- cited rule, the Petitioner made a general comment that if further services are not provided, patients will be required to receive services at emergency rooms, thereby voiding the possibility of cost containment which could be offered by granting the certificate of need to this Petitioner, who is willing to provide 24-hour home health care services. This statement standing alone is insufficient to show that the granting of the certificate of need to the Petitioner will foster cost containment.
Finally, the fifth reason for denying the certificate of need was premised upon the failure of the Petitioner to provide financial feasibility data reflecting the inclusion of Medicare and Medicaid resources. The requirement for such data is found in Rule 10-5.09(5), Florida Administrative Code, which states:
(5) Documentation showing that the project is financially feasible and can be
accommodated without unreasonable charges for services rendered to include a projection of income and expense on a pro forma basis for the first two years of operation after completion of the project.
Petitioner claimed at the hearing that it has failed to include this data because the inclusion of Medicare and Medicaid patients in its proposed services was a last minute item and no one in the evaluation process told them that they had to comply with this provision. At the time of the hearing the data was yet to be provided.
Upjohn and Personnel Pool were afforded an opportunity to offer their testimony to establish in what respects they might be superior to the other applicant for a certificate of need, assuming that only one certificate of need was to be granted. The two Petitioners did not wish to make any direct attack on the special qualifications of the collateral Petitioner. Both parties proceeded on the basis of offering their remarks to be available for comparison if the contingency were realized which required that only one certificate of need be issued. It is not necessary to detail the special qualifications of these Petitioners, because no certificate of need will be recommended for issuance in Escambia County, Florida, the location in which Upjohn and Personnel Pool are potential competitors for a sole certificate of need. Nonetheless, the facts offered in support of the special qualifications of Upjohn may be found in the transcript of record, pages 187 through 190. The testimony on Personnel Pool's special qualifications may be found in the transcript of the hearing on pages 228 and 251 through 256.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties in this case.
Official recognition is taken of Rules 10-5.11(14)(a) and (b) and 10- 5.09(5), Florida Administrative Code. The rules spoken of are the rules which took effect June 5, 1979, and it is these rules which have application to the case.
At the beginning of the hearing, the parties stipulated that all legal time requirements for review and hearing have been complied with and that stipulation is hereby accepted.
Based upon a full consideration of the facts herein, it is concluded as a matter of law that the Petitioner, Upjohn Healthcare Home Health Agency, is not entitled to a certificate of need as applied for to service Escambia, Okaloosa and Santa Rosa Counties, Florida. This conclusion is reached on the basis that the Health Systems Plan for the Florida Panhandle effective December 15, 1978, does not allow service of a multi-county service area from a single location. Further, Rule 10-5.11(14)(a), Florida Administrative Code, does not allow a further certificate of need to be issued unless the health agency or subunit now in service has reached a daily census for each of those agencies or subunits providing services in the service area of an average of 300 patients for the immediate preceding calendar quarter. The Petitioner failed to present evidence on the preceding calendar quarters dealing with all of the current servicing agencies; however, to the extent that statistical data was presented it was shown that none of the current servicing agencies have achieved the 300- patient census spoken of.
The 300-patient census requirement can be overcome by showing mitigating and extenuating circumstances as found in Rule 10-5.11(14)(b), Florida Administrative Code; however, the Petitioner has failed to make an adequate showing that the existing agencies in the counties in question are unable to provide service to all persons in need of home health care and has similarly failed to demonstrate that the approval of the proposed new home health agency would foster cost containment for all of the providers in the health service area. Finally, the Petitioner has not complied with Rule 10- 5.09(5), Florida Administrative Code, by providing data necessary to demonstrate that the project is financially feasible and can be accommodated without unreasonable charges for services in the area of Medicare and Medicaid patients.
This recommendation is being entered in view of the Facts and Conclusions of Law in this case and those Facts and Conclusions of Law in the companion case, D.O.A.H. No. 79-1748, Personnel Pool of Pensacola, Inc. d/b/a Medical Personnel Pool v. State of Florida, Department of Health and Rehabilitative Services. Upon consideration of the Facts herein and the Conclusions of Law, it is recommended that the Petitioner, Upjohn Healthcare Home Health Agency be denied its request for a certificate of need to serve Escambia, Okaloosa and Santa Rosa Counties, Florida. It is further recommended that the agency in entering its final order do so by a process of simultaneous review of this Recommended Order and the Recommended Order entered in D.O.A.H. Case No. 79- 1748, Personnel Pool of Pensacola, Inc. d/b/a Medical Personnel Pool v. State of Florida, Department of Health and Rehabilitative Services, and that final orders
be entered on the same date with copies to be served on the representatives of each applicant in this case and in the companion case mentioned above.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301
(904) 488-9675
COPIES FURNISHED:
Vivian Krumel, R.N. Mr. Art Forchand, Administrator Service Director Office of Community Medical Facil. Upjohn Healthcare Services Department of Health and
15 West Strong Street Rehabilitative Services Old Townhouse Square 1323 Winewood Boulevard Pensacola, Florida 32501 Tallahassee, Florida 32301
Mr. John Owens Mr. Joe Dowless
Zone Manager, West Florida Office of Licensure and Cert. Upjohn Health Care Services Department of Health and
3118 Gulf to Bay Blvd. Rehabilitative Services Clearwater, Florida 33519 Post Office Box 210
Jacksonville, Florida 32202
Charles T. Collette, Esquire
Departnt of Health and Mr. Herbert E. Straughn Rehabilitative Services Office of Cozmunity Medical Facil. 1323 Winewood Boulevard Department of Health and Tallahassee, Florida 32301 Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32301
Sherrill E. Phelps
Governmental Affairs Representative Personnel Pool of America, Inc.
303 Southeast 17th Street
Fort Lauderdale, Florida 33316
Mr. Thomas S. Siler Owner/Administrator
Personnel Pool of Pensacola, Inc. 1800 North Palafox Street Pensacola, Florida 32501
| Issue Date | Proceedings |
|---|---|
| Dec. 03, 1979 | Final Order filed. |
| Nov. 05, 1979 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 28, 1979 | Agency Final Order | |
| Nov. 05, 1979 | Recommended Order | Deny Petitioner Certificate of Need (CON) to operate home health agency. Petitioner cannot operate from single base for multicounty area and failed to show need. |
