STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEALTH CARE AND RETIREMENT )

CORPORATION OF AMERICA, )

(Heartland of Broward), )

)

Petitioner, )

)

vs. ) CASE NO. 83-0882

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, DONALD R. ALEXANDER, on January 18, 1984 in Tallahassee, Florida.

APPEARANCES

For Petitioner: Alfred W. Clark, Esquire

325 North Calhoun Street Tallahassee, Florida 32301

For Respondent: Jay Adams, Esquire

Building One, Room 406 1323 Winewood Boulevard

Tallahassee, Florida 32301 BACKGROUND

By application filed herein, petitioner, Health Care and Retirement Corporation of America, seeks a certificate of need from respondent, Department of Health and Rehabilitative Services, to construct a 120-bed nursing home in Broward County, Florida. On January 28, 1983 respondent issued proposed agency action in the form of a letter to petitioner advising that its application was being denied on the ground "(a) need does not exists to add nursing home beds to Broward County through 1985." Petitioner requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes, to contest the agency's decision, and the matter was forwarded by respondent to the Division of Administrative Hearings on March 17, 1983 with a request that a Hearing Officer be assigned to conduct a hearing.

By notice of hearing dated April 13, 1983 the final hearing was scheduled for July 6, 1983 in Fort Lauderdale, Florida. Thereafter, petitioner filed a motion for continuance on July 1, 1983 which was granted on July 6, 1983, and the matter was rescheduled to September 19, 1983 at the same location.

As a result of a prehearing conference, the parties agreed to reschedule the final hearing to October 25, 1983 in Tallahassee, Florida. On October 17, 1983 petitioner again requested a continuance which was granted by the undersigned by order dated October 27, 1983. The final hearing was reset for January 18, 1984 in Tallahassee, Florida.

On January 12, 1984 a petition to intervene and consolidate was filed by Federal Property Management Corporation which also had an application for nursing home beds in Broward County pending in Case No. 83-817. The petition to intervene was denied by order dated January 16, 1984 on the grounds the petition was not timely and did not meet the requirements of Rule 28-5.207, Florida Administrative Code. 1/ The petition to consolidate was denied by order dated January 17, 1984.

At the final hearing the parties offered no live testimony. However, they generally stipulated that no factual matters were in dispute; that a numerical need for 101 nursing home beds existed in Broward County, Florida; that petitioner had met all statutory and rule criteria for certification "except the numerical criteria for more than 101 beds in Broward County"; that if existing Rule 10-5.11(21) then under attack in Case No. 83-2260R was found invalid, the Department had informally prepared a new methodology showing a need for 210 beds in Broward County; and that four other applications for nursing home beds in Broward County were Pending before the Department and had been considered in the batching cycle prior to that of applicant herein. Petitioner offered petitioner's exhibit 1 which contains a summary and outline of its consultant, Harold E. Knight, III, a General Accounting Officer report, a recent article published in Health Care and Financial Management, and a January 4, 1984 Department memorandum. Respondent offered respondent's exhibit 1, a compilation of unlicensed but approved nursing home beds in the State as of December 1, 1983.

The transcript of hearing was filed on January 23, 1984. Proposed findings of fact and conclusions of law were filed by the parties on February 6 and 7, 1984 and have been considered by the undersigned in the preparation of this order. Findings of fact not used in this order were considered irrelevant to the issues, immaterial to the results reached, or were not supported by competent and substantial evidence.

The issue herein is whether petitioner's application for a certificate of need to construct a 120-bed nursing home facility in Broward County, Florida should be granted.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Petitioner, Health Care and Retirement Corporation of America, d/b/a Heartland of Broward, filed an application with respondent, Department of Health and Rehabilitative Services (HRS), for a certificate of need to construct a 120- bed nursing home in Broward County, Florida.

   
   

2. After reviewing the application, respondent issued its proposed agency action in the form of a letter dated January 28, 1983 denying the application on the ground no need for 120 additional nursing home beds was demonstrated under the existing bed need methodology set forth in Rule 10-5.11(21), Florida Administrative Code.

3. The parties now agree, and have so stipulated, that a numerical need for 101 nursing home beds exists in Broward County at the present time. They have also agreed that petitioner meets all statutory and rule criteria for the issuance of a certificate of need for those 101 beds.

   
   

4. There are four other pending applications, including a second one by petitioner herein, for nursing home beds in Broward County. These applications were evaluated and denied by HRS in an earlier batching cycle than that of applicant. However, their final hearing was not conducted until after the hearing in this cause.

   
   

5. Despite a contention by HRS counsel that under HRS policy or practice an earlier applicant has first priority over a later applicant to any available beds, there was no evidence to support that policy.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

7. Although the applications of the other four entities seeking nursing home beds in Broward County are not of record in this cause, the parties have agreed that they were considered in an earlier batching cycle than that of applicant. Because of delays, the causes of which are also not of record, their hearings were not conducted until sometime after the final hearing conducted in this case on January 18, 1984.

   
   

8. HRS generally contends that the principle of "first in line is first in right" must be adhered to, and that the four applications considered in a prior batching cycle have first claim to the 101 beds authorized by the rule. If any are left over, only then can the applicant herein lay claim to a part of that number. It argues that to allow applicant to have first claim to the beds would violate not only the comparative review doctrine, hut also the batching cycle process. In short, it suggests that priority must be determined on the batching cycle rather than the hearing date. Petitioner disputes these assertions and points out that there were no comparative applicants in the batch in which its application was filed, that no rule or statute requires that its application be held in abeyance until prior cycles have been finally resolved, and that no statute or rule requires applications in different cycles to be reviewed simultaneously.

   
   

9. If HRS chooses to give priority to applicants in the earliest batching cycle, it must do so by policy elucidated and explicated on a case-by-case basis, or by a rule adopted pursuant to Section 120.54, Florida Statutes. See for example, McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). As petitioner correctly points out, there is no existing rule (or statute) which expressly requires that applications in later cycles be delayed until all applications in earlier cycles have been resolved. This is not to say that HRS cannot express such a policy by adopting a rule which might then be well-nigh conclusive. But if it makes a choice to live with policy- making by adjudication, certain costs are exacted upon the agency. That is to say, "when an agency elects to adopt incipient policy in a non-rule proceeding, there must be an adequate support of its decision in the record of the proceeding." Florida Cities Water Company v. Public Service Commission, 384 So.2d 1280, 1281 (Fla. 1980); Woodward v. Department of Professional Regulation,

   432 So.2d 146, 147 (Fla. 1st DCA 1983). Here the record is devoid of any testimony, documentary evidence, or other evidence appropriate in form to the nature of the issue involved, Anheuser-Busch, Inc. v. Department of Business Regulation, 393 So.2d 1177, 1183 (Fla. 1st DCA 1981) and accordingly the nonrule policy was not proved by the agency.

   
   

10. Because the validity of Rule 10-5.11(21), Florida Administrative Code, was recently upheld in Health Care and Retirement Corporation of America v. Department of Health and Rehabilitative Service, DOAH Case No. 83-2260R, Final Order dated 2/3/84, that rule is binding as to a determination of need, and HRS is bound to observe it in administering its certificate of need program. Page

    v. Capital Medical Center, Inc., 371 So.2d 1087, 1089 (Fla. 1st DCA 1979). According to the stipulated agreement of the parties, there is a need for 101 additional nursing home beds in Broward County, Florida at the present time.

    
    

11. The record discloses that petitioner has met all statutory and rule requirements for the issuance of a certificate of need. Therefore, it is entitled to the issuance of such a certificate authorizing the construction of a 101-bed nursing home facility within Broward County.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner's application for a Certificate of Need be

granted in part and that it be authorized to construct a 101-bed nursing home facility in Broward County, Florida.

DONE and ENTERED this 16th day of February, 1984, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 16th day of February, 1984.

ENDNOTE

1/ Although counsel for the Department indicated in his post-hearing proposed order that he was not given notice of a motion hearing conducted on January 13, 1984 concerning the petition to intervene, the Department was represented at that hearing by counsel, Theodore E. Mack, Esquire, who actively participated in argument.

COPIES FURNISHED:

Alfred W. Clark, Esquire

325 North Calhoun Street Tallahassee, Florida 32301

Jay Adams, Esquire Building One, Room 406 1323 Winewood Boulevard

Tallahassee, Florida 32301

David H. Pingree, Secretary 1323 Winewood Boulevard

Tallahassee, Florida 32301

Alicia Jacobs General Counsel

1323 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 83-000882

Orders for Case No: 83-000882