STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
RICHMOND HEALTHCARE, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 82-2661
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) HEALTH CARE AND RETIREMENT )
CORPORATION OF AMERICA, )
)
Petitioner, )
)
vs. ) CASE NO. 82-2637
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) HEALTH QUEST CORPORATION, )
)
Petitioner, )
)
vs. ) CASE NO. 82-2640
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) FEDERAL PROPERTY MANAGEMENT, )
)
Petitioner, )
)
vs. ) CASE NO. 83-817
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on January 23-27, 1984 in Ft. Lauderdale, Florida.
Petitioner Richmond Healthcare, Inc. (hereinafter "Richmond") was represented by Richard G. Coker, Jr., Attorney at Law, Ft. Lauderdale, Florida; Petitioner Health Care and Retirement Corporation of America (hereinafter "HCR") was represented by Jean Laramore and Alfred W. Clark, Attorneys at Law, Tallahassee, Florida; Petitioner Health Quest Corporation (hereinafter "Health Quest") was represented by Charles M. Loeser, Attorney at Law, South Bend, Indiana; petitioner Federal Property Management (hereinafter "FPM") was represented by Robert D. Newell, Jr., Attorney at Law, Tallahassee, Florida; and Respondent Department of Health and Rehabilitative Services (hereinafter "HRS") was represented by Claire D. Dryfuss, Attorney at Law, Tallahassee, Florida.
Each of the Petitioners in this cause filed with Respondent an application for a Certificate Of Need to construct and operate a community nursing home in Broward County. Each application was denied on the sole ground that there was no need for additional nursing home beds in Broward County. Just prior to the formal hearing in this cause Respondent determined that there is a need for 101 additional beds. Petitioners contend there is a need for the 780 they seek collectively. Accordingly, the issues for determination herein are whether there exists a need for more than 101 additional nursing home beds in Broward County, and, if not, which applicant should be awarded a Certificate Of Need for the 101 beds approved by Respondent.
At the commencement of the final hearing Respondent withdrew its pending Motion In Liminie (sic), and HCR's Motion To Limit Issues was denied. Richmond presented the testimony of Judith J. Baker, John Werner, George W. Millard, John
W. Overton, William T. McKettrick, and Bernie Welch. FPM presented the testimony of William McMaken, Alan Mahar, Lynn Raichelson, Michael L. Schwartz, Leroy Dikes, and by way of deposition exhibit Barbara Palmer. Health Quest presented the testimony of Robert Weller, Theodore J. Foti, John Laird, and Steven C. Biondi. HCR presented the testimony of Paul Hronjak, Donald C. Nelson, and Harold E. Knight, Jr. Respondent presented the testimony of Thomas
Porter. Additionally, Richmond's Exhibits numbered 1-8, FPM's Exhibits numbered 1-17, Health Quest's Exhibits numbered 1-22, HCR's Exhibits numbered 1- 7, and Respondent's Exhibits numbered 1-5 were admitted in evidence.
All parties submitted posthearing proposed findings of fact, primarily in the form of a proposed recommended order. To the extent that any proposed findings have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence, as having been irrelevant to the issues under consideration herein, or as constituting unsupported argument of counsel or conclusions of law.
FINDINGS OF FACT
Originally, each Petitioner filed an application for a Certificate Of Need for the construction and operation of nursing home facilities in Broward County as follows: HCR - 120 beds, Richmond - 240 beds, Health Quest - 180 beds, and FPM - 240 beds. The applications were reviewed by Respondent comparatively and competitively, and they were denied in a State Agency Action Report on August 12, 1982 solely on the basis that there was no need for additional nursing home beds in Broward County. The formal hearing thereafter requested by all Petitioners was continued several times due to scheduling conflicts and due to the expected promulgation of a new methodology by which the need for nursing home beds is computed. As a result of Respondent's Quarterly Census Report dated November 30, 1983, Respondent determined that in fact there was a need for an additional 101 nursing home beds in Broward County.
Accordingly, just prior to the formal hearing and by letter dated January 4, 1984, Respondent's attorney invited each Petitioner to amend its application for the purpose of being eligible to receive a Certificate Of Need for those 101 beds. Each Petitioner so complied. At the final hearing, each Petitioner proceeded on both its original application and its amended application.
In spite of the singular ground for denial of each application contained in the State Agency Action Report, Respondent's attorney contended from the inception of this proceeding and into the final hearing that whether any of the applications met all statutory and rule criteria for approval was disputed by Respondent, including the financial feasibility of each proposed project. According to Respondent's only witness, Thomas F. Porter, however, all four applications meet all statutory and rule criteria for approval including financial feasibility. Accordingly, the only facts to be determined herein will relate to the issue of the number of beds needed. Since Respondent stipulated that 101 beds were available to be awarded to one of the applicants in this proceeding (Tr. 17, 36-40, 952), the threshold issue is how many beds in excess of 101, if any, are needed in Broward County.
Respondent uses the most recently available information in analyzing applications for nursing home beds, including the Quarterly Census Report which it publishes, and a mathematical methodology contained in Section 10-5.11(21), Florida Administrative Code, the purpose of which methodology is to project the need for nursing home beds on a three year basis to determine the availability of those beds for award to Certificate Of Need applicants in relation to a projected need. The methodology contains several steps. The first part of the methodology projects the number of beds that will be needed based upon an adjustment of a standard of 27 beds per thousand for the population aged 65 and over to reflect the percentage of those in poverty in the HRS district in relation to those living in poverty in the state. The second part of the methodology contains the present and prospective occupancy rates. Before any of the new beds which are determined to be needed can be added, the average occupancy rate for existing homes must exceed eighty five Percent (85), as the rule is applied to Broward County, the only county in Florida constituting its own HRS district and having no sub-districts. Furthermore, the second part of the formula provides that no additional beds which have been determined to be needed can actually be added if, theoretically, the prospective occupancy rate after the beds are added will be reduced below eighty percent (80 percent). Respondent's determination as to the number of beds needed and the number of beds available for Certificate of Need applicants according to "part two" of the formula is based on its Quarterly Census Reports. The November 30, 1983 Quarterly Census Report revealed that 1,419 community nursing home beds (4,058 needed beds, less 2,789 existing and 300 previously approved but not constructed beds) will be needed in Broward county in 1986, the horizon year for these applicants. The occupancy rate of existing nursing home beds for the six months preceding that report was 91.5 percent. According to that report, since the prospective occupancy rate is 80 percent for Broward County, then the addition of more than 101 beds at the present time will theoretically reduce the prospective occupancy rate below 80 percent.
Under normal circumstances Respondent will issue Certificates of Need in accordance with the need methodology set forth above. However, Respondent has discretion to approve applications for nursing home beds which do not conform to the need methodology if the existence of special circumstances can be proven. Special circumstances do exist in Broward County which warrant a determination that more nursing home beds are needed than is demonstrated by a strict application of Respondent's need methodology. One of those special
circumstances is the existence in the district comprised of Broward County of an older population than in the other districts in Florida. Broward County's 65 and over population is fairly typical of Florida at the present time, but there is a significant difference in the proportion of the population which is 75 and over and which will be 75 and over in the near future. In 1980 Florida as a whole had 6.5 percent of its 65 and over population in the 75 and over category which was projected to increase to 9 percent by the year 2000. By contrast, according to studies performed by Dr. Robert Weller, in Broward County 35.4 percent of the 65 and over population was 75 and over, and by 1986 this number was projected to increase to 53.6 percent. This difference was classified by Dr. Weller as "very meaningful" to the point where he would be very "uncomfortable" with any attempt to plan for Broward County using statewide averages.
This large difference in the composition of the elderly population of the state as a whole and Broward County is a significant special circumstance because the older the population the greater the demand for nursing home beds. In fact, the big predictors of need for nursing home beds are illness and age. The average age of entry into a nursing home is 81. While the population group of 85 and older utilize nursing home beds at a rate 15 times greater than the 65 and older group, the over 75 age category constitutes 70 percent of all nursing home users.
Respondent's need methodology does not make an adjustment for differences in the 65 and over category between the various districts. This failure to adjust for an older population may not significantly affect districts with more normal population composition, but since Broward County's population departs substantially from the norm, it is an essential consideration. The failure to consider this situation results in a gross understatement of need in Broward County.
Diagnostically Related Groups (hereinafter "DRG") regulations are amendments to the Social Security Act effective in 1983 which alter the method by which hospitals will receive reimbursement for Medicare patients. Under the DRG regulations, which hospitals are required to adhere to by the end of 1984, reimbursement for Medicare patients will be based upon an established length of stay for each type of illness. For example a hospital might be reimbursed for an eight day hospital stay for a coronary by-pass operation whether the patient actually stays in the hospital for seven or for 12 days. The effect of the DRG regulations is the earlier discharge of many patients in need of intensive nursing care. Every expert witness and professional administrator opined at the hearing in this cause that DRG regulations will result in an increased demand for nursing home beds.
In addition to the effect the DRG regulations will have in a normal situation, the characteristics of the Broward County will accentuate this effect. The nationwide average for percent of Medicare funding in acute care hospitals is approximately 50 percent while the average for Broward County in last 12 months ranges from 53 percent to about 64 percent. The characteristics of Broward's elderly population also increases the effect of the DRG regulations because the population in Broward County is older than that in the remainder of the state.
A study of the effects of the DRG regulations on the need for additional nursing home beds was recently conducted for Palm Beach County. That county has a high percentage of elderly (although not as high as Broward) and a high percentage of Medicaid funding. That study indicated that the DRG
regulations would increase demand there by about 225 to 300 beds. Theodore J. Foti, an expert in health planning, utilized the Palm Beach study to estimate that from 325 to 400 additional beds are needed in Broward County to compensate for the DRG regulations alone.
In Broward County there are three facilities which Respondent counts as nursing home facilities but which do not provide nursing home services. The Daystar Nursing Home, which contains 44 beds, is a Christian Science facility which does not provide the level of care associated with nursing homes. The Manor Oaks facility, which contains 116 beds, has a hospital license as an extended care facility and is a licensed specialty hospital, not a nursing home. St. Johns Nursing and Rehabilitation Center, which contains 100 beds, is a specialty hospital. Respondent includes the 340 beds in these facilities in computing the total of existing nursing home beds. Since these facilities are not truly nursing homes, they are displacing beds which normally provide nursing home services. The need methodology, therefore, does not include the true number of existing nursing home beds in Broward County, and, therefore, even if all other data used in the methodology be accurate, the bed need as determined by the methodology is understated by 340 beds.
Barbara Palmer is employed by Respondent in its Office of Aging and Adult Services. Her job duties include writing proposed rules, manual material and legislative budget requests for Respondent's program known as Community Care for the Elderly (hereinafter "CCE"). CCE services include case management as well as CORE services, adult day care, chore, emergency alert response systems, home delivered meals, home health aid, medical transportation and personal care. Each of these programs is generally designed to provide services to the clients in the client's home. None of these services are provided to persons who are already in nursing homes. In order to compute need for CCE services, Palmer and Respondent rely on research by Dr. Carter Osterbind which identifies the incidence of "homebound" and "bedfast" individuals in the population aged 65 and over. Respondent defines bedfast as a person who, because of physical or other infirmities, remains in bed and is incapable of being in any other place. Similarly homebound individuals are those who cannot leave their homes without assistance. Respondent routinely uses Osterbind's 8 percent incidence factor to calculate the percentage of the population in the State of Florida 65 and over that can be characterized as homebound and bedfast.
Subject to revisions, Palmer prepares the budget proposal for Aging and Adult Services which is then approved by the Secretary of the Department of Health and Rehabilitative Services for submission to the Governor and which then becomes Services for part of the Governor's budget request which is ultimately submitted to the Legislature. Palmer uses two documents to prepare her budget request: Dr. Osterbind's paper "Older People in Florida" and "Florida Decade of the 80's", a technical appendix provided by the Office of the Governor as a reference for population statistics for use in developing legislative budget requests. Using these two documents, a projected need is compared with the historical data of how many people have been served with the money which was received in a previous budget year. By subtracting the historically met need from the projected need, Palmer arrives at the projected unmet need, which is presented in a table depicting the total number of homebound and bedfast clients who will not receive services. Palmer also uses a factor, developed by Respondent's Community Care for the Elderly Program, to determine how many individuals, but for the fact that their need is going to be met, are at risk of institutionalization. Respondent's Office of Evaluation has developed and published a 42 percent factor and utilizes it as a basis to determine how many of those persons in a category whose needs will be unmet because of lack of
budget dollars in the future will actually end up in nursing homes if more dollars are not appropriated. In other words, Respondent utilizes a document promulgated in 1981 by its Office of Evaluation which indicates that a 42 percent factor should be applied to an 8 percent statewide percent of the population 65 and older to determine how many are at risk of institutionalization in a nursing home, and this methodology has been used routinely by Respondent to prepare Respondent's budget requests through 1985. Palmer's approach in preparing the budget request has a purpose of persuading the Legislature that unless money is provided, 42 of all homebound and bedfast individuals will have to be institutionalized but for provision for home health care services. Palmer's last budget request shows that in the decade of the 80's Respondent expects a 69.8 percent increase in the population group 65 and over.
The 10 year plan for CCE and CORE services gives the estimated percentage of need which Respondent intends to meet with CCE and CORE services for various budget years through 1990. Respondent will only provide those services to 23.84 percent of those persons needing them in 1985-86 and only
26.48 percent in 1986-87. Estimated unduplicated clients that will be served in those same years are 41,448 and 47,869 respectively.
Expert witness, Michael Schwartz, used Respondent's population figures for Broward County and Respondent's methodology according to Palmer to determine how many of those individuals aged 65 and over in Broward County will be homebound and bedfast in the planning horizon year of 1986. Multiplying the number of homebound and bedfast by the percentile of persons that are at risk of institutionalization yields the figure of 9,760 persons for the horizon year. The number of persons projected by Respondent's Office of Aging and Adult Services to actually receive the CCE-CORE services in that horizon year is 3,956. Thus, the number of individuals unable to obtain those services and needing a nursing home bed in that year will be 5,802. These people will need nursing home beds for an average length of stay of two and one-half years (national average). The current inventory of nursing home beds in Broward County, including approved but not built beds, is 3,089. When the existing inventory is subtracted from the number of needed beds, as computed by the Aging and Adult Services methodology, the net need is an additional 2,715.
Thus, when Respondent's methodology for determining the need for nursing home beds in the absence of alternatives of CCE and CORE services is applied to Broward County for the year 1986, it yields a need for 2,715 beds in addition to existing and approved beds to accommodate the homebound and bedfast who will not receive those services. However, when Respondent's methodology in Section 10-5.11(21), Florida Administrative Code, is applied to Broward County for the year 1986 it yields a need for 1,419 beds in addition to existing and approved beds. Yet, when the theoretical prospective occupancy feature contained in that rule is applied to Broward County, only 101 beds are needed to be built in time for service in 1986. It is noteworthy that the formula used by Respondent to induce the Legislature to fund programs for the diversion of the elderly from nursing homes yields double the need for nursing home beds in Broward County in 1986 than use of the formula established by Respondent to evaluate applications for new nursing home beds. Schwartz identified the reason for the difference: The CCE funding formula takes into account those below the poverty level as well as those above the poverty level in determining the number of people who are at risk of institutionalization unless CCE services are provided. However, Respondent's bed need methodology uses a poverty ratio (number of impoverished in the county relative to number of impoverished in the state) to adjust the statewide standard of 27 beds per thousand downward to 15.5
beds per thousand in Broward County. Since the first part of the bed need methodology only measures nursing home bed need for the impoverished (by adjusting 27 beds per one thousand by a poverty ratio) while the formula used by Aging and Adult Services contemplates all persons at risk of institutionalization, whether impoverished or not, and since the Aging and Adult Services methodology yields a higher need figure, tie difference between the two figures must represent the extent to which private pay patients (not impoverished) are using, and will continue to use, nursing home beds in Broward County to the exclusion of Medicaid patients.
Utilizing the first part of the bed need methodology, Respondent has determined that Broward County will need a total of 4,508 beds in 1986 and that, when licensed and approved beds are subtracted, 1,419 additional beds will be needed. However, the second part of the methodology which purports to determine the prospective utilization of nursing home beds limits the number of beds which can be added to 101. The premise behind the prospective utilization test is that the addition of more than 101 beds will result in the occupancy rate for nursing homes in Broward County being reduced below 80 percent. Because of the particular situation existing in Broward County this premise is not valid. In November 1983, Richmond's newly-constructed Sunrise facility had 120 beds in service, but Respondent counted all 240 approved beds as being in service for determining its occupancy rate. These 240 beds were, therefore, occupied at a rate of 24.4 percent. In November 1982, the occupancy rate for nursing homes in Broward County was 89.8 percent, while a year later after including all 240 licensed beds in Richmond's Sunrise facility, the occupancy rate had only fallen
3 points to 86.7 percent. Expert witness Schwartz concludes that if 240 beds can be added In Broward County and only drop the occupancy rate from 89.8 percent to 86.7 percent, then certainly more than 101 beds can be added before the occupancy rate will drop below 80 percent. He further concludes that when One examines what actually happened in Broward County rather than what could theoretically happen, the prospective utilization test may well be a valid predictor of future occupancy rates under normal circumstances, but it fails to be in Broward County. Rather, Schwartz concluded that approximately 1,000 nursing home beds can be added in Broward County without lowering the occupancy rate below 80.
Expert witness Theodore Foti explained the effect of Respondent's bed need methodology when applied to Broward County. The methodology is based on the premise that the only people who need nursing homes in Florida are the impoverished since the standard 27 beds per one thousand is adjusted only by the poverty ratio. However, nursing home providers prefer private patients because they pay more. In Broward County there are facilities that only accept private pay patients. The provider receives about 25 percent more profit than he would if he had two individuals to care for in the same room when the difference between private and semi-private rates and the decrease in staffing that is possible with the lesser number of patients are taken into consideration. Because of the shortage of supply and the ever-growing demand in Broward County, it is economically beneficial to a 60 bed nursing home for example to take 20 beds out of service and operate with 40 beds because the owner can increase the rates and lower the costs simultaneously. According to Foti, a review of the occupancy rates in Broward County shows that beds in certain facilities have been taken out of use over a period of time by those facilities. Those providers have chosen to serve primarily the private paying individual since it is to their financial benefit to do so. The corresponding result is that the demand for nursing home beds by the medicaid recipient cannot be satisfied because the private pay patient has "squeezed out" the Medicaid patient. The existence of this phenomena in Broward County rises to the level of an
exceptional circumstance since Respondent uses a formula to prescribe prospective occupancy rates which are directly controlled by the number of beds that the existing owners place in service or take out of service. Considering the "private pay phenomena" in Broward County, and considering that the number of beds per 1,000 in Broward County is the lowest in the state, and considering that the number of beds per 1,000 in the state is the lowest in the country, Foti calculates a need currently in Broward County to be an additional 800 beds as a minimum figure even without considering the DRG regulations which clearly will accentuate that need.
Respondent's witness Porter acknowledged that Respondent would look favorably upon applications for Certificates of Need for additional beds in an area where indications are that Medicaid patients are being denied access to beds although Respondent's bed need methodology simultaneously shows that no new beds are needed. He explained that as an extenuating circumstance if there is evidence that a particular population group is being denied access and that Respondent would look favorably upon applications proposing substantial Medicaid beds (such as those under consideration herein) if accessibility for Medicaid clients is limited. He further acknowledged that the Medicaid program office of the division of Adult and Aging Services would be an appropriate authority upon which he would rely in making such a determination. He further acknowledged that the accessibility to Medicaid beds would be increased in Broward County by issuing Certificates of Need with a Medicaid bed condition attached to them since the Medicaid utilization rate has been increasing in Broward County even though the total number of beds has remained constant.
Lynn Raichelson as the supervisor of Respondent's Adult Payments Unit for Broward County is responsible for gathering data reflecting the number of people placed in Medicaid beds during the month in Broward County for Medicaid payment purposes. Both her reports admitted in evidence and her testimony at the final hearing noted an overall difficulty in finding placements in Broward County for Medicaid patients. Her reports indicate a number of entries where all Broward County and Dade County nursing homes were contacted but there were no nursing home beds available. The number of days for placement ranged from 23 to in excess of 83 days. Most of the patients were in acute care hospital beds while awaiting nursing home beds.
Several health care professionals testified as to the actual need in Broward County as opposed to the projected need based upon Respondent's mathematical formula. One hospital administrator had no problem placing private pay patients but found that Medicaid placements are extremely difficult to make in Broward County. His hospital alone holds 8 to 12 patients on any given day who should have been discharged into a nursing home. The executive director of the North Broward Hospital District which encompasses three hospitals encounters difficulty in placing Medicaid and Medicare patients in nursing homes in Broward County since the nursing homes are at full operational occupancy. Approximately
25 percent of the patients discharged from hospitals in the District are referred to and placed in nursing homes. Of this 25 percent, the District encounters difficulty in placing 10 to 15 percent of the patients. The problems persist year round but are especially difficult during the winter "peak" season.
Alan Mahar is the administrator of the Primary Health Care Division of the Health and Public Safety Department for Broward County. He was the supervisor of nursing home placement from 1975 to 1981 when Broward County was making nursing home placements. Between June 1981 and September 1983 he participated in a Medicaid demonstration project called Pentastar which was sponsored by Respondent's District 10 Aging and Adult Program Office. The
purpose of the project was to determine if an alternative existed to keep persons out of nursing homes. An important part of the program was the identification of persons aged 60 and over who were potentially at risk of being placed into a nursing home within one year. Those enrolled in the program had to qualify for Medicaid payments. Although he expected he would need to interview approximately 300 to find 150 persons for the program, everyone he interviewed qualified. At the conclusion of the program, none of the persons who received services through pentastar were any less at risk than they were before those services commenced. Services under that program terminated in September 1983. Since Broward County does not have a publicly operated nursing home, Mahar experienced extreme difficulty in placing Medicaid patients and found that it frequently took weeks and sometimes months to find an available nursing home bed for a Medicaid patient. Mahar's opinion that there is not a sufficient number of beds available to Medicaid patients in Broward County is also based on his identification of the trend over the last three years he has been involved in auditing Medicaid matching funds. The money which Broward County has been paying for hospital care for Medicaid persons has almost doubled in the last three years, while the Medicaid match money for nursing home care has gone up only 15 or 20 percent during that same period.
The poverty ratio included in Respondent's bed need formula results in an underestimation of bed need for wealthy counties such as Broward County where the majority of nursing home patients are private pay patients. Broward County is the wealthiest county in the state and has the lowest Medicaid usage in the state. The poverty ratio results in a calculated bed-need ratio in Broward County of 15.5 beds per thousand whereas the statewide need ratio is 27 beds per thousand.
There is overwhelming competent substantial evidence to show an actual need for community nursing home beds in Broward County currently and in 1986 for in excess of the 780 beds Petitioners collectively seek herein. Substantial competent evidence was presented to show several special circumstances, and respondent's sole witness acknowledged that one of those was sufficient for the grant of all applications filed by the four Petitioners in this cause. The overwhelming need proven herein was uncontroverted by Respondent, and the special circumstances prohibit Respondent from applying the bed need methodology in Broward County at this time.
In view of the overwhelming and uncontroverted evidence, there is no need to determine which of the applicants herein is best qualified for the award of the 101 beds in issue in this cause. Additionally, the evidence in this record is insufficient to proclaim any of the applicants to be best qualified. At the final hearing there were a few attempts at a comparative analysis, and none was credible. The attempts at comparative analysis simply resulted in a further substantiation of the fact that all of the applicants are equally qualified. Respondent's witness gave his personal opinion that one of the applicants was preferable but was unable to assign any weight to any of the factors utilized in reaching that individual opinion. Rather, the one factor that he did testify to at length in the hearing as the most important - accessibility by Medicaid patients - was the one item that that applicant would not guarantee. HCR's application for the 101 beds indicated that it would not commit to the number of Medicaid patients that it would serve. In short, the testimony at the hearing and the evidence presented provide very little basis, if any, for choosing one applicant over another. Rather, all applicants meet all criteria, and the need for the number of beds originally requested clearly exists.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.
Section 10-5.11(21)(a) Florida Administrative Code, provides that Respondent will not normally approve applications for new community nursing home beds in any district unless the approval meets the criteria of the bed need methodology set forth in that section. Petitioners have overwhelmingly proven that special circumstances exist that require the Respondent to exercise its discretion to approve the applications in question herein for a total of 780 beds. The expert testimony did establish the unusual population characteristics of the residents in Broward County with its high percentage of persons 75 and older requiring nursing home beds. The impact of the DRG regulations which require hospitals to shorten the stay of patients is not factored into the bed need methodology. Further, several of the facilities whose beds have been counted in the number of nursing home beds in Broward County are not nursing home facilities. Additionally, Respondent's own documents relating to the CCE- CORE services programs shows an overwhelming need for nursing home beds not considered under strict application of the nursing home bed methodology. Finally, Respondent's own witness acknowledged that the evidence presented regarding the lack of accessibility of Medicaid patients to existing nursing homes in Broward County is in and of itself sufficient as a special circumstance to prohibit invocation of the bed need rule. Assumably Respondent would accept the testimony of its own employees, Barbara Palmer and Lynn Raichelson, as to the actual need rather than the theoretical need established by the bed need formula. Additionally the Pentastar program sponsored by Respondent buttresses that evidence. No evidence was presented by Respondent to rebut any of the testimony regarding any of the special circumstance factors which show that the number of nursing home beds in Broward County is not the normal situation. Granting an additional 780 beds to Petitioners will permit the traditionally under-served in Broward County to have access to the same quality of care as private pay patients without significantly reducing the occupancy rate of existing homes and without reducing the prospective occupancy rate below 80 percent. To forbid the allocation of these beds now would continue to do unacceptable violence to the accessibility criteria in Section 10-5.11(3), Florida Administrative Code.
Several motions which were filed by Respondent posthearing warrant discussion as does a newly announced change in Respondent's position after the final hearing in this cause. First, Respondent has filed a Motion for Judicial Notice which is in the nature of a request for official recognition. Respondent requests that notice be taken of the Final Order entered in DOAH case number 83- 2260R which dismissed Petitions seeking to invalidate Respondent's nursing home bed need methodology. The Motion for Judicial Notice be and the same is hereby GRANTED.
Respondent has also filed posthearing a Motion To Dismiss Health Quest Corporation for Lack of Jurisdiction and Health Quest Corporation has filed a Memorandum Opposing Motion to Dismiss Health Quest Corporation for Lack of Jurisdiction. The subject of the motion is the amendment by Health Quest during the hearing from Health Quest Realty as the applicant to Health Quest Corporation. Extensive testimony was taken as to the relationship of those entities, and Health Quest's Motion to Amend was granted. Respondent having failed to object to the amendment at the time the Motion to Amend was made, Respondent cannot be heard to raise this issue posthearing. Accordingly,
Respondent's Motion to Dismiss Health Quest Corporation for Lack of Jurisdiction be and the same is hereby DENIED. It is worthy to note Respondent's opposition to Health Quest amending its name to conform to its corporate structure upon which substantial evidence was taken during the hearing in this cause when the Department had no opposition to, and in fact supported, HCR's amending substantially its application for the 101 beds during the course of the hearing just before presenting its case in chief and after all the other applicants had rested.
Based upon a complete change in Respondent's position after the conclusion of the hearing, HCR has filed a Motion for Leave to File Limited Response to the Department's Proposed Findings of Fact and Conclusions of Law and HCR's Limited Response to the Department's Proposed Findings of Fact and Conclusions of Law, and Respondent filed a Memorandum in Opposition to Motion for Leave to File Limited Response to the Department's Proposed Findings of Fact and Conclusions of Law. After two years of litigation and a week long final hearing at considerable expense to the Petitioners herein, Respondent, in its Proposed Findings of Fact and Conclusions of Law by Respondent has now taken the position that there are not 101 beds available to the applicants in this proceeding but rather that Respondent has chosen to award those beds to an applicant in a subsequent batching cycle simply because that applicant's appeal of Respondent's initial denial of its application went to hearing before this case went to hearing. It is unthinkable that Respondent would put the petitioners and the taxpayers of this state to the expense of engaging in a "mock trial". The final hearing in this matter commenced at a time when Respondent had determined that there was 101 beds available to one of the applicants in this proceeding, and Respondent's attorney was questioned numerous times during the proceeding as to a guarantee by Respondent that those beds would remain available to one of the applicants in this proceeding.
Respondent's attorney stated on three different occasions on the record that the beds were available and would remain available. Now, after the trial is over, Respondent takes the position that it changed its mind and gave the beds to someone else. Respondent itself has established "batching" rules which established a chronological review of applications for Certificates of Need.
The rule has operated under a "first come, first served" basis as the need for additional beds comes into existence. The fact that Respondent now takes the position that it can give the beds guaranteed to the applicants in this proceeding to an applicant in a subsequent batch, who coincidentally happens to be HCR, is shocking, contrary to the administrative law system established in Florida under the Administrative Procedures Act, and, hopefully, a position with which the Secretary of the Department of Health and Rehabilitative Services will not concur.
Based upon the foregoing Findings of Fact and Conclusions of Law it is recommended that a Final Order be entered:
Granting to Richmond Healthcare, Inc. a Certificate of Need for 240 beds in Broward County in accordance with its original application;
Granting to Health Care and Retirement Corporation of America a Certificate of Need 120 beds in Broward County in accordance with its original application;
Granting to Health Quest Corporation a Certificate of Need for 180 beds in Broward County in accordance with its original application; and
Granting to Federal Property Management a Certificate of Need for 240 beds in Broward County in accordance with its original application.
DONE and RECOMMENDED this 15th day of October, 1984 in Tallahassee, Florida.
LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 15th day of October, 1984.
COPIES FURNISHED:
Richard G. Coker, Jr., Esquire 1107 South East Fourth Avenue Fort Lauderdale, Florida 33316
Jean Laramore, Esquire and Alfred W. Clark, Esquire
325 North Calhoun Street Tallahassee, Florida 32301
Charles M. Loeser, Esquire
315 West Jefferson Boulevard South Bend, Indiana 46601-1568
Robert D. Newell, Jr., Esquire Lewis State Bank Building,
Suite 464
Tallahassee, Florida 32301
Claire D. Dryfuss, Esquire Department of Health and
Rehabilitative Services 1323 Winewood Boulevard,
Suite 406
Tallahassee, Florida 32301
David Pingree, Secretary Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Oct. 15, 1984 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Oct. 15, 1984 | Recommended Order | Applications for Certificates of Need (CON) for community nursing home beds granted due to existence of exceptional circumstances shown by department's data. |
