STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEALTH QUEST REALTY XII, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1892

)

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 February 28, 1984, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Charles M. Loeser, Esquire

315 West Jefferson Boulevard South Bend, Indiana 46601-1585

For Respondent: Jay Adams, Esquire

Building One, Room 407 1323 Winewood Boulevard

Tallahassee, Florida 32301 BACKGROUND

This proceeding was initiated when respondent, Department of Health and Rehabilitative Services, issued its proposed agency action in May, 1983 advising that it intended to deny an application for a certificate of need filed by petitioner, Health Quest Realty XII, wherein petitioner sought authorization to construct a 120-bed nursing home facility in Hollywood, Florida.

Petitioner thereafter filed a petition for formal administrative proceeding pursuant to Subsection 120.57(1), Florida Statutes, to contest the denial of its application. The matter was forwarded by respondent to the Division of Administrative Hearings on June 15, 1983 with a request that a Hearing Officer be assigned to conduct a hearing.

By agreement of the parties the final hearing was scheduled on October 18, 1983 in Tallahassee, Florida. On October 7, 1983 petitioner filed a motion for continuance which was granted by the undersigned on October 12, 1983. The final hearing was rescheduled to January 31, 1984 at the same location. Upon the request of respondent, and without objection by petitioner, the matter was rescheduled to February 28, 1984 in Tallahassee, Florida.

At the final hearing petitioner presented the testimony of Dr. Robert H. Weller who was accepted as an expert in the field of demographics and population studies, and Dr. Fred West, accepted as an expert in the field of health planning. Weller's testimony was given in the form of a proffer since it was deemed irrelevant by the undersigned. Petitioner also offered petitioner's exhibits 1-8; all were received except exhibits 2, 3, 6, 7 and 8. Respondent offered no testimony or exhibits after petitioner stipulated that the bed need in Broward County derived under Rule 10-5.11(21), Florida Administrative Code, was 101 additional beds. By agreement of the parties, the deposition of John M. Laird, petitioner's director of health planning, was taken on March 14, 1984 and made a part of this record. Also made a part of this record were exhibits 1-6 attached to the deposition.

The transcript of hearing was filed on March 21, 1984. Proposed findings of fact and conclusions of law were filed by the parties on April 5, 1984 and have been considered by the undersigned in the preparation of this order.

Findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached, or were not supported by competent and substantial evidence.

The parties have stipulated that all statutory and rule criteria have been satisfied by petitioner except as to need. Accordingly, the issue is whether petitioner has demonstrated a need to construct a 120-bed nursing home facility in Hollywood, Florida.

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

FINDINGS OF FACT

1. Petitioner, Health Quest Realty XII, filed an application with respondent, Department of Health and Rehabilitative Services (HRS), in November, 1982 seeking a certificate of need authorizing the construction of a 120-bed nursing home facility in Broward County, Florida. The original estimated cost of the project was $3,108,000; however, due to the passage of time since the original filing, petitioner now anticipates the cost to be $4,488,000. The proposal will be financially guaranteed by Health Quest Corporation, a corporation with principal offices in South Bend, Indiana.

   
   

2. After reviewing the application, HRS issued its proposed agency action advising petitioner that it intended to deny the application. The proposed agency action was not introduced into evidence, but based on the stipulation of the parties, the denial was apparently predicated upon the lack of need for any additional beds in Broward County, Florida.

   
   

3. The determination of need for nursing home beds is made pursuant to Rule 10-5.11(21), Florida Administrative Code. Under the formula contained in that rule, only 101 additional nursing home beds were needed in Broward County, Florida, at the time of final hearing. However, HRS recently granted this allocation of beds to Health Care and Retirement Corporation of America in DOAH Case No. 83-882, Final Order entered on April 4, 1984. Accordingly, no need for any additional beds exists at the present time under the rule.

   
   

4. Petitioner principally contended that non-rule factors must be considered in evaluating its application because Broward County is not "normal" within the meaning of the rule. In this regard, it offered evidence to show that Broward County has the fewest beds per capita of the eleven service

   districts in the state, that the county has a relatively low use of nursing home services by its indigent population, and that the county has a greater number of Medicaid patients per 1,000 indigent elderly than other counties. From this, it concluded that Broward County is abnormal to the extent that more nursing home services must be made available to the elderly indigent. However, these factors are incorporated within the rule and accordingly taken into account when determining need.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

6. By agreement of the parties, the sole impediment to granting the application is whether there exists a need for 120 additional nursing home beds in Broward County, Florida. Need is determined by formula prescribed by HRS and is found in Rule

   10-5.11(21), Florida Administrative Code. This rule is binding as to need, and HRS is bound to observe it in administering its certificate of need program.

   Page v. Capitol Medical Center, Inc., 371 So.2d 1087, 1089. According to the rule at the time of hearing, there existed a need for 101 additional beds. But since the hearing, HRS has allocated those beds to another facility, Health Care and Retirement Corporation of America v. Department of Health and Rehabilitative Services, DOAH Case No. 83-882, Final Order entered April 4, 1984, and accordingly no need exists at the present time under the rule.

   
   

7. Notwithstanding the above, petitioner argues that its application should not be subjected to the strict constraints of the rule because of the following language in paragraph (a) of the rule:

   
   

   . . . The Department will not normally approve applications for new or additional community nursing home beds in any departmental service district if approval of an application would cause the number of community nursing home beds in that departmental service district to exceed the number of community nursing home beds calculated by the methodology described

   in . . . this rule. (Emphasis added)

   
   

   According to petitioner's argument, "abnormal" conditions exist in Broward County thereby warranting a deviation from the rule and consideration of non- rule factors in determining need. But these so-called "abnormalities" are factors already considered in the rule, and therefore do not justify a deviation from its normal application.

   
   

8. It is concluded that no need exists for additional nursing home beds in Broward County, Florida, and that petitioner's application should be denied.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is

RECOMMENDED that the application of Health Quest Realty XII for a certificate of need to construct a 120-bed nursing home facility in Broward County, Florida, be DENIED.

DONE and ENTERED this 17th day of April, 1984, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1984.

COPIES FURNISHED:

Charles M. Loeser, Esquire

315 West Jefferson Boulevard South Bend, Indiana 46601

Jay Adams, Esquire Department of Health and

Rehabilitative Services Building One, Room 407 1323 Winewood Boulevard

Tallahassee, Florida 32301

David H. Pingree, Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

Alicia Jacobs, Esquire General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

================================================================= AGENCY FINAL ORDER

================================================================= DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

HEALTH QUEST REALTY XII,

Petitioner,

vs. CASE NO. 83-1892

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.

/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. On April 17, 1984, the Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached thereto.

1. Health Quest - meaning Health Quest Realty XII - filed exceptions to the Recommended Order. A copy of Health Quest's exceptions is attached hereto as Exhibit A.

HRS STATEMENT AND RULING ON THE EXCEPTIONS

(AA) Health Quest Exceptions (1) and (2) - The Hearing Officer is affirmed on both issues. Consideration to the controlling factors of this case has been given. The Exceptions are denied.

FINDING OF FACT

The Department hereby adopts and incorporates by reference the findings of fact made by the Hearing Officer.

CONCLUSIONS OF LAW

The Department hereby adopts and incorporates by reference the conclusions of law made by the Hearing Officer. Accordingly, *

* NOTE: Final page/s of this Order are unavailable from the Agency and therefore not a part of this ACCESS document.

================================================================= DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

HEALTH QUEST REALTY XII, NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

vs. CASE NO. BA-22

DOAH CASE NO. 83-1892

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Appellee,

/ Opinion filed July 16, 1985.

An Appeal from an Order of the Department of Health and Rehabilitative Services. Charles M. Loeser, South Bend, Indiana, for Appellant.

Jay Adams, Deputy General Counsel, Department of Health and Rehabilitative Service, Tallahassee, for Appellee.

SMITH, L., J.

Health Quest sought a certificate of need (CON) to construct and operate a nursing home in Broward County. HRS denied the application on the grounds of lack of need and Health Quest requested an administrative hearing. Subsequent to the hearing but before entry of the recommended order, HRS granted a CON for

101 nursing home beds to Health Care and Retirement Corporation of America (HCRC). Since HRS had a ready allocated the 101 beds which were needed in Broward County to HCRC, the hearing officer recommended the denial of Health Quest's application. At the same time, the hearing officer ruled that the factors relied upon by Health Quest to show that an "abnormal" 1/ situation existed in Broward County, were already considered in Rule 10-5.11(21), Florida Administrative Code, and therefore did not justify a departure from the nursing home bed need methodology contained within the rule. Health Quest appeals, contending that the rulings by the hearing officer, which were adopted by HRS in its final order denying Health Quest's application, were in error, and mandate reversal. We disagree, and affirm.

The parties agree that pursuant to the bed need methodology contained in Rule 10-5.41(21), that only 101 additional nursing home beds were needed in Broward County. HCRC's application for a CON for these beds was received and processed in the batching cycle 2/ preceding Health Quest's batching cycle. Prior to the hearing in this cause, the administrative hearing on HCRC's application had already been completed, and an order recommending that HCRC be

granted a CON for the needed beds in Broward had been entered. After the granting of HCRC's CON, there was no unprovided for bed need.

While it may have been a better practice for the hearing officer to determine the merits of Health Quest's application based only on the facts adduced at the final hearing, without consideration of this post-hearing event, any error in this regard was harmless. Although the final order granting HCRC's application for the beds in Broward County was not entered until after Health Quest's hearing, we do not think HRS was required to ignore the impending grant of a CON to HCRC. Certainly HRS was entitled to recognize its own prior order granting a CON for the beds in Broward County to another party, HCRC, when it considered the hearing officer's recommended order on Health Quest's application. 3/ Once HRS had allocated the needed beds to HCRC, it was not possible to allocate the same beds to Health Quest. 4/

On appeal, Health Quest has inexplicably cited Bio-Medical Applications of Ocala, Inc. v. Office of Community Medical Facilities, Department of Health and Rehabilitative Services, 374 So.2d 88 (Fla. 1st DCA 1979), in support of reversal. Bio-Medical and the case upon which it relies, Bio-Medical Applications of Clearwater, Inc. v. Department of Health and Rehabilitative Services, Office of Community Medical Facilities, 370 So.2d 19 (Fla. 2d DCA 1979), recognize that when an applicant for a CON is able to show that the granting of a CON to another applicant would substantially prejudice its application, and the applications are mutually exclusive, fairness requires that HRS conduct a comparative hearing at which the competing applications are considered simultaneously. We fail to see the connection between the holdings in those cases and this case.

We note, as HRS observes, that the Bio-Medical case and its predecessor preceded the adoption of batching cycles by HRS, and that Bio-Medical's discernment of the right of one CON applicant to be heard on the application of another was in relation to "mutually exclusive " applications. 374 So.2d at 89. Health Quest has made no showing that its application and the application of HCRC are "mutually exclusive." See Judge Glickstein's dissenting opinion in South Broward Hospital District v. Department of Health and Rehabilitative Services, 385 So.2d 1094, 1095 (Fla.4th DCA 1980). As HRS appropriately notes, Health Quest was not a simultaneous or near simultaneous applicant to HCRC, since HCRC had applied in the earlier batching cycle. Accordingly, HRS followed its long-standing policy and the statutorily mandated "batching cycles" process, and awarded the beds to the applicant in the prior batching cycle.

Under the circumstances present in this case we find merely academic the parties' arguments concerning Health Quest's entitlement to comparative review of its application with that of HCRC. 5/ Health Quest never sought comparative review in the proceeding below. Moreover, Health Quest failed to mount any attack on HRS' non-rule policy giving priority to applications filed in preceding batching cycles. 6/ Since these issues were not preserved for appellate review, this court is not in the position to order that any type of comparative review take place.

We have not overlooked Health Quest's other point. Health Quest argued below that abnormal conditions existed in Broward County (District X) thereby warranting a deviation from the bed need methodology contained in Rule 10- 5.11(21), and consideration of non-rule factors in determining need.

Specifically, Health Quest sought to show: (1) Broward County (District X) has the fewest beds per capita of the eleven service districts in the state; (2) that Broward County has a greater number of medicaid patients per 1,000 indigent

elderly than other counties, that these medicaid patients are not using nursing home beds in Broward County, and consequently the indigent elderly are not getting service in Broward County; (3) that the occupancy rate of 91.5 percent reported by HRS for Broward County is misleadingly low and instead the occupancy rate is in excess of 95 percent; and (4) the population 75+ in Broward County is growing faster than in the rest of Florida. We agree with HRS that these four factors are considered in the bed need methodology provided for in Rule 10- 5.11(21), and therefore do not justify a deviation from application of the methodology contained within that rule. To the extent that Health Quest may have been attempting to demonstrate the propriety of utilizing a different bed need methodology, we hold that HRS was not required to consider such evidence.

See, Turro v. Department of Health and Rehabilitative Services, 458 So.2d 345 (Fla. 1st DCA 1984). Finally, any error in the hearing officer's refusal to allow into evidence the Broward Regional Health Council's district plan was harmless, since Health Quest sought to utilize the plan in conjunction with its impermissible collateral attack on the bed need methodology found in the rule.

The final order of HRS is AFFIRMED.

ENDNOTES

1/ Rule 10-5.11(21)(a), Florida Administrative Code.

2/ 381.494(5), Fla. Stat. (1983); and Rule 10-5.08, Florida Administrative Code.

3/ At the beginning of the administrative hearing, HRS requested the hearing officer to officially recognize the recommended order in HCRC's administrative case. He did so without objection from Health Quest. Moreover, we observe that agencies may officially recognize certain facts, just as a court is permitted to judicially notice certain facts. 1 Fla.Jur.2d, Administrative Law, 86, p. 672. A court may judicially notice its own actions and records, Section 90.202(5) and (6), Florida Statutes (1983), and we have no difficulty postulating that an administrative agency may recognize its own actions and orders.

4/ We note that Health Quest did not raise the hearing officer's consideration of this post-hearing event in its exceptions to the hearing officer's recommended order.

5/ Whether applicants in a later batching cycle are entitled to comparative review with applicants in earlier batching cycles has been said to be subject to "some difference of opinion." Federal Property Management Corporation v. Health Care and Retirement Corporation of America, 462 So.2d 493, 495 (Fla. 1st DCA 1984).

6/ This court has implicitly recognized a "priority" status based upon the time of application in Doctor's Osteopathic Medical Center, Inc. v. Department of Health and Rehabilitative Services, 459 So.2d 1053 (Fla. 1st DCA 1984).

MILLS and THOMPSON, JJ., CONCUR.

================================================================= DISTRICT COURT OPINION ON MOTION FOR REHEARING

AND/OR CLARIFICATION

=================================================================

IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA

HEALTH QUEST REALTY XII, NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

vs. CASE NO. BA-22

DOAH CASE NO. 83-1892

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Appellee,

/ Opinion filed October 10, 1985.

An Appeal from an Order of the Department of Health and Rehabilitative Services. Charles M. Loeser, South Bend, Indiana, for Appellant.

Jay Adams, Deputy General Counsel, Department of Health and Rehabilitative Services, Tallahassee, far Appellee.

OPINION ON MOTION FOR REHEARING AND/OR CLARIFICATION

SMITH, L., J.

Upon consideration of Health Quest's motion for rehearing and/or clarification we agree that this court misstated one of Health Quest's contentions on page five of our original opinion. This court stated that Health Quest contended Broward County has a greater number of Medicaid patients per 1,000 indigent elderly than other counties when in actuality Health Quest sought to show that Broward County has a fewer number of Medicaid patients per 1,000 indigent elderly than other counties. As we stated in our original opinion, this and other figures were introduced by Health Quest to show that Medicaid patients are not using nursing home beds in Broward County and consequently the indigent elderly are not getting, service in Broward County. We adhere to our original opinion that this particular factor (as well as the other three factors relied upon by Health Quest) are considered in the bed need methodology provided for in Rule 10-5.11(21). Specifically, Rule 10-5.11(21) does measure projected need for nursing home beds based in part on the number of impoverished elderly persons in the county.

In all other respects the motion for rehearing and/or clarification is denied.

MILLS AND THOMPSON, JJ., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT

To the Honorable, David H. Pingree, Secretary

WHEREAS, in that certain cause filed in this Court styled:

HEALTH QUEST REALTY XII Case No. BA-22

Your Case No. 83-1892

vs.

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

The attached opinion was rendered on July 16, 1985 & October 10, 1985.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Anne C. Booth

Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 13th day of November, 1985.

Clerk, District Court of Appeal of Florida, First District

Docket for Case No: 83-001892

Orders for Case No: 83-001892