vs. ) CASE NO. 83-2542
Respondent. )
On January 10, 1984, a formal hearing was held to resolve this dispute.
The location of the hearing was St. Petersburg, Florida. This Recommended Order is being entered after receipt and review of proposed Recommended Orders filed by counsel. Those proposals have been utilized to some extent, as reflected in this Recommended Order. They are otherwise rejected as being contrary to facts found, immaterial or irrelevant. Various unsolicited filings, which have been offered in addition to the proposed Recommended Orders, have also been examined and are addressed in the conclusions of law. The most recent material was filed on May 1, 1984.
For Petitioner: C. Timothy Corcoran, III, Esquire
CARLTON, FIELDS, WARD, EMMANUEL, SMITH & CUTLER, P.A.
For Respondent: Robert P. Daniti, Esquire
For Intervenor: Leonard A. Carson, Esquire
Michael M. Parrish, Esquire CARSON & LINN, PA
The issues presented concern the question of the Petitioner's entitlement to amend its license to expand its geographic service area to include Hillsborough and Manatee Counties with a base of operation being its existing offices in Pinellas County.
Petitioner is a home health care provider in Florida. Subsequent to April 30, 1976, it applied for and was granted a statement of need to serve patients in Pinellas County, Florida. Statement of Need No. 450 was issued on July 13, 1976. At that time, Global was not requesting opportunities to offer service for patients in other counties within the district, those outlying counties being Pasco, Hillsborough and Manatee. Consequently, the focus of the review related to Pinellas County, notwithstanding the fact that the reviewing agency, Florida West Coast Health Planning Council, Inc. had as its responsibility consideration of health care needs in the aforementioned four counties. Although the license that was granted to the Petitioner as a result of the Statement of Need did not on its face limit the geographic area of service, the license opportunity only pertained to Pinellas County. The license from the Respondent for the Pinellas service was issued in September 1976, following the grant of the Statement of Need by the local HSA. Petitioner's Exhibits No. 22 and No. 41, admitted into evidence describe this Statement of Need review process and evidence the fact that the review only encompassed Pinellas County.
In 1977, Petitioner indicated to the Respondent that it had an interest in serving patients in Pasco County, on the basis of a perceived need for home health care services for those patients. At about this time, Petitioner also expressed an interest in serving patients in Hillsborough and Manatee counties. (The Petitioner did not provide home health services in Manatee and Hillsborough Counties prior to April 30, 1976, nor did it have a Medicare Provider Number issued by the United States Department of Health and Human Services, formerly Health, Education and Welfare, prior to that date). Out of this process litigation occurred and in the course of the conflict, the request to serve patients in Hillsborough and Manatee Counties was dropped. The effect of the Petitioner's dismissal of its request to operate in Manatee and Hillsborough Counties did not foreclose future efforts to expand its service to Hillsborough and Manatee patients based upon the outcome of the 1977-78 proceeding nor did that proceeding establish the right of the Petitioner to serve the Hillsborough and Manatee patients. The outcome of the litigation was an expansion of the Petitioner's license opportunity to include patients in Pasco County, without the necessity to obtain a Certificate of Need to operate in Pasco County. The expansion of services into Pasco County was not in keeping with the Statement of Need which had been issued for Pinellas County. The reason for granting the license in Pasco County was premised upon the Petitioner's reliance on specific permission which had been given by the Respondent to the Petitioner to operate in Pasco County, which permission was later disclaimed and finally reinstated by a formal Section 120.57(1), Florida Statutes, hearing. In essence, the license was afforded Petitioner upon the theory of equitable estoppel. Intervenor's composite Exhibit No. 2, admitted into evidence contains the Recommended Order and Final Order related to the Pasco County expansion of services.
Subsequent to the expansion referred to in the previous paragraph, Global requested recognition of two subunits to be placed in Pasco County. One was to be located in the New Port Richey/Port Richey area and the other was to be located in the Zephyrhills/Dade City area. The application may be found as Respondent's exhibit No. 2, admitted into evidence. This expansion was the subject of Certificate of Need review both at the local level by the Florida Gulf Health Systems Agency and by the Respondent in its office of Community Medical Facilities. The State Agency Action Report related to this application may be found as Respondent's Exhibit No. 4, admitted into evidence and contains
review comments for all four counties in the related health service area, namely Pinellas, Pasco, Manatee and Hillsborough; however, the primary emphasis of the project review pertained to Pasco and Pinellas Counties. Following review, proposed agency action in the way of the issuance of a Certificate of Need was to the effect that the two subunits should be granted Certificate of Need No.
2072. A copy of that proposed agency action (certificate) may be found as Respondent's Exhibit No. 5, admitted into evidence. This proposed agency action granting a Certificate of Need for two subunits was challenged by the present Intervenor leading to a joint stipulation for settlement between the present parties to this action related to the Pasco County subunits. A copy of the joint stipulation may be found in Petitioner's Exhibit No. 25. That joint stipulation was accepted by the Secretary of the Department of Health and Rehabilitative Services through the entry of a final order on April 25, 1983, and per the order the Petitioner was left with one subunit, Certificate of Need No. 2072 for a Zephyrhills office in Pasco County. The subunit Certificate of Need did not contemplate service expansion into Manatee and and Hillsborough Counties from the remaining office.
Independent of Petitioner's efforts to seek the subunit recognition, it determined to expand its service area into Hillsborough and Manatee Counties.
In particular, these plans began to take shape in late 1982. The intended expansion does not entail the establishment of any offices or other plant, separate and apart from those in Pinellas and Pasco Counties as recognized with the issuance of the initial Statement of Need 450 and the Certificate of Need 2072, respectively. It is intended that Global provide the services in Hillsborough and Manatee Counties from its existing offices in Pinellas County. In the present hearing, the Petitioner has not indicated an intention to use the Pasco/Zephyrhills offices as the base of its operations in Hillsborough and Manatee Counties. Petitioner holds the opinion that the expansion into Hillsborough and Manatee Counties from its Pinellas County parent home health agency offices would not require Certificate of Need review. Consequently, it believes that it would be entitled to make that expansion simply by complying with other license requirements related to such expansion. In the alternative, Global urges that should a Certificate of Need be necessary before the expansion of service into the new counties, review has been performed upon the occasion of the issuance of the Statement of Need 450 and/or the issuance of the Certificate of Need No. 2072 for the subunit in Pasco County. Global also believes it is entitled to an amendment of its license allowing the expansion based upon its impression that similar permission has been granted other home health providers.
After requesting provision of appropriate forms to accomplish the amendment to its license to allow expansion of services into Hillsborough and Manatee, there followed a series of letters between the parties, to include preliminary comments by the Respondent's staff members, some favorable to Petitioner's position, leading to an April 29, 1983, letter from Jay Kassack, Director, Office of Licensure and Certification, found as Petitioner's Exhibit No. 26, which advised the Petitioner that it was denied its expansion of service based upon failure to show evidence of compliance with Certificate of Need requirements set forth in Chapter 381, Florida Statutes, and Rule 10-5, Florida Administrative Code, and a subsequent letter of May 6, 1983, from Thomas J. Konrad, Administrator, Community Medical Facilities, Office of Health Planning and Development, found as Petitioner's Exhibit No. 29, which also denied the request for expansion based upon the inability to utilize the Statement of Need as a basis for expansion into Hillsborough and Manatee Counties, in that criteria of need had not been applied to Hillsborough and Manatee Counties by the Health Systems Agency when it reviewed and issued the 1976 Statement of
Need. In the face of the denial of its request for licensure, the Petitioner sought and was provided this formal hearing.
Based upon the belief that the necessary permission would be given to expand its service area into Hillsborough and Manatee Counties but prior to final decision by the agency on that request, Petitioner hired six additional nurses and began the development of training aids and other related matters dealing with the expansion of its service area at a cost of approximately
$60,000. Those nurses could not be used to attend other patients already being served by the Petitioner. The agency had not promised that the license request would be granted and Global's understanding of the opportunities afforded by its existing license and Statement of Need and Certificate of Need recognition, together with the history of other applicants making similar requests for expansion did not entitle the Petitioner to undertake this development of services and expect to be granted permission to expand upon a theory of estoppel. In pursuing its hiring practices prior to the opportunity for the agency to speak finally to the request for expansion, Global did so at its own risk and did so not based upon sufficiently specific facts from the Department related to this application request to cause a change in its position after relying on those representations. The impetus for changing its position was provided by the applicant premised upon its presumptions related to the agency's response to the request for expansion, without allowing the agency the opportunity to review and announce its decision in this case. This circumstance is as contrasted with the 1977-78 case in which Global was allowed to expand its operations into Pasco County based upon the agency's initial action of condoning operations in Pasco County and then attempting to retract that permission. On this occasion, the agency has never countenanced the expansion of services into Manatee and Hillsborough Counties.
From Respondent's point of view, the license denial is premised upon the use of an item referred to as "home health agency review matrix," a copy of which is found as Petitioner's Exhibit No. 1, admitted into evidence. In particular, reference is made to that portion related to expansion of a service area based upon the use of a Statement of Need. The language of that section says, "HSA Statement of Need remains valid. May expand HHA only in those counties in which criteria of need were applied by HSA." In essence, as indicated in the May 6, 1983, correspondence from Konrad, Petitioner's Exhibit No. 29, the Department was of the opinion that the criteria of need and the recognition of Petitioner by issuance of a Statement of Need No. 450, pertained only to Pinellas County. That perception is correct. A review of the record submitted to include the exhibits and testimony leads to the conclusion the criteria of need were not applied to examine counties other than Pinellas County when the Statement of Need was issued to the Petitioner. Therefore, according to the Department, Petitioner may not expand into Hillsborough and Manatee Counties without further Certificate of Need review related to Hillsborough and Manatee Counties.
The Department began to use the matrix in March 1983 in its efforts to create an overview of its responsibilities in considering Certificates of Need and licensure related to home health care agencies. At the time of the final hearing in the instant case, the matrix served as a guide for considering requests to establish new home health agencies, to expand service areas and to establish subunits, depending upon the prior history of the home health agency as being "grandfathered" as a holder of a Medicare Provider Number from HEW prior to April 30, 1976; the holder of Statement of Need issued between 1975 and July 1977 or the holder of a Certificate of Need. The matrix assumes that the expansion of service area is an event requiring Certificate of Need review
unless in the Statement of Need situation, as described, review criteria of need have been applied in the area where the home health agency intends its expansion. By contrast, in the instance of the grant of an original Certificate of Need for a new home health agency, there is a presumption that review has been made in all counties prior to the issuance of the Certificate of Need, therefore expansion may be made from that original facility into counties within that service area without the necessity of seeking a further Certificate of Need before offering services in outlying counties within the service area which were not being served before. The matrix makes no specific provision for the expansion of services from a subunit such as the Pasco County subunit held by the Petitioner. That question is not at issue in that the Petitioner does not seek expansion from its Pasco County subunit, so it is not necessary to address whether such expansion is allowed in keeping with the recognition of the subunit. The four county review involved in that recognition and grant of Certificate of Need and amended license, may not serve the secondary purpose of substituting for the criteria of need review contemplated in the Statement of Need process wherein criteria of need had to be examined in the subject counties in order to allow an expansion without the benefit of a Certificate of Need.
Recognition of a subunit by the grant of a Certificate of Need is acceptance of a home health agency's base of operation through a semiautonomous entity and each successive subunit, according to the matrix, must undergo Certificate of Need review. Having refused to allow the recognition by issuance of a Certificate of Need for one subunit to form the basis for recognizing an additional subunit in the same county, notwithstanding the area wide review of criteria of need involved with the initial subunit, as expressed in the matrix, it follows that the subunit recognition of the Petitioner's Pasco County Operation not only may not form the basis of expansion, even if offered for that purpose, but may not serve to establish substituted data related to criteria of need in Hillsborough and Manatee Counties that was not forthcoming in the original review for the facility in Pinellas County at the time of the issuance of the Statement of Need. Assuming that the expansion of service from the original home health agency facility in Pinellas County as recognized through the Statement of Need process, without the establishment of a new home health agency, or subunit or fixed plant, by providing home health services in the residence of the patients in Hillsborough and Manatee Counties as delivered by employees of the petitioner is an activity which must undergo Certificate of Need review, the Department's utilization of the matrix to insure that a project undergo examination through the use of criteria of need is reasonable.
Recognition of this treatment of the issue of review takes into account the distinction between the presumptions related to the review process in the Certificate of Need analysis by the Department in which full service area review for all counties is contemplated as contrasted with the possibility that the Statement of Need process by the local Health Planning Agency may have been accomplished on less than a full service area review, as was the situation with Global. Given this distinction, the matrix is not found to be at odds with the Legal Opinion 82-2, authored by Staff Attorney, James M. Barclay, dated March 9, 1982, in which significance is placed upon the fact that in the Certificate of Need review process health service area wide review is made and therefore expansion within the service area from the original facility is acceptable given the area wide review related to the proposed home health agency. The memorandum and matrix pertaining to Certificates of Need are consistent. A copy of the memorandum is found as Petitioner's Exhibit No. 3, admitted into evidence. The memorandum does not, from a review of its language and statement of applicable statutes and rules, address the Statement of Need circumstance.
Petitioner has alluded to the agency's alleged inconsistent treatment of its request for expansion and amendment to its license allowing services to
be offered in Manatee and Hillsborough Counties from its Pinellas County facility, compared to other home health agencies. Materials related to those other requests may be found in Petitioner's Exhibit Nos. 34-39, 41 and 42, admitted into evidence. All of those requests by home health agencies are consistent with the present denial, with the exception of Roberts Nursing. This consistency pertains to the fact that certain expansions were allowed due to special circumstances such as the need to provide service to patients in DeSoto County based upon the abandonment of patients by an ongoing health care provider, special circumstances related to certain counties in North Florida that were being served by Georgia health care providers and the fact that expansion in some instances was based upon the existence of a Certificate of Need as opposed to Statement of Need. The Roberts' situation is either the product of a mistake or is contrary to the present process of analysis of requests for expansions on the basis of Statements of Need. Petitioner has not shown that the expansion without Certificate of Need made by Roberts was pursuant to a contrary policy choice that was applied to Petitioner. On the other hand, there is some testimony that the Roberts' situation was possibly allowed based upon the belief that Roberts was expanded on the basis of a Certificate of Need as opposed to a Statement of Need, when in fact Roberts, like Global, held only a Statement of Need. Whatever the explanation, the treatment of the Roberts' request does not cause the grant of a license to Petitioner. One of the other home health care providers who sought expansion opportunities as found in Petitioner's Exhibit No. 38, admitted into evidence, was Independent Home Health Services, Inc., which was denied its opportunity based upon the agency's assertion that the Statement of Need originally granted that provider only looked at need for Pinellas County and expansion into Pasco County would require a Certificate of Need.
Finally, Global has not asserted its entitlement to licensure based upon proof that it has satisfactorily addressed the criteria of need dealing with home health care offered in Hillsborough and Manatee Counties as such, related to a presentation separate and apart from the review process that may have been pursued prior to the present controversy. If it is the intention of the Petitioner to seek a license based upon satisfactorily addressing criteria of need, in substance, related to the offering of services in Hillsborough and Manatee Counties, that showing has not been successfully made on this occasion.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Chapter 120, Florida Statutes.
A prerequisite to licensure of home health care agencies is receipt of a Certificate of Need pursuant to the provisions of Sections 381.493-381.497, Florida Statutes, per Section 400.471(3), Florida Statutes. Therefore, for the Petitioner to receive licensure to operate in Manatee and Hillsborough Counties, appropriate Certificate of Need review must have occurred prior to the contemplated expansion into Hillsborough and Manatee Counties or that Certificate of Need review must now be conducted. The particular reference within Chapter 381, Florida Statutes, pertaining to home health care agencies and the Certificate of Need process is as found at Section 381.494(1)(f), Florida Statutes, which requires a Certificate of Need for the establishment of a new home health care agency. Home health agency is defined at Section 400.462, Florida Statutes, to include a private organization or subdivision of that organization which provides home health services. One of the interpretations given to the term subdivision, is a subunit, as defined by Rule
10-5.02(16), Florida Administrative Code, as being a "semiautonomous home health agency which serves persons in a county different from the parent agency and/or is incapable of sharing administration, supervision and services on a daily basis with a parent agency." The home health services contemplated are as defined in Section 400.462(3), Florida Statutes, as being ". . .health and medical services and medical supplies furnished to an individual by a home health agency or by others under arrangements with the agency, on a visiting basis, in a place of residence used as an individual's home." In view of these definitions, it is the home health agency's provision of those types of "services" that is the subject of licensure. The original licensure of the Petitioner in 1976, in keeping with the Statement of Need review process, recognized that private organization to the extent of serving patients within Pinellas County. No recognition of the right to serve was given related to Hillsborough and Manatee Counties. The result of the review and recognition by Statement of Need limited to Pinellas County identified the parameters of the license as being a license to operate as a home health agency providing home health services in Pinellas County. The license did not allow the delivery of home health services in Hillsborough and Manatee Counties. Petitioner was next allowed to expand its home health services into Pasco County outside the Certificate of Need process not in view of service opportunities afforded by the original Statement of Need and its associated license, but based upon what was tantamount to principles of estoppel. Petitioner was then given the right to operate a subunit in Pasco County in keeping with a Certificate of Need. Being subordinate to the original or base operation in Pinellas County the recognition of the Pasco subunit by the issuance of a Certificate of Need and amendment to the license of the home health agency, this recognition did not grant opportunities for the home health agency to offer expanded services from that subunit into Hillsborough and Manatee Counties, without further Certificate of Need review related to the operations of the home health agency. Moreover, Petitioner has not attempted such expansion from the subunit operation by its request to offer services in Manatee and Hillsborough Counties. Finally, the subunit review is not the quality of review which would suffice as constituting Certificate of Need comment on the propriety of the delivery of home health services in Hillsborough and Manatee Counties from the Pinellas County operation through field representatives of the Petitioner. It was review which conceptually and factually did not speak adequately to the Hillsborough and Manatee expansion. In summary, no Certificate of Need review process has been undertaken related to the propriety of expanding into Hillsborough and Manatee Counties through the advent of a home health agency.
The meaning of home health agency is not confined to the parent facility in Pinellas County and the physical office, referred to as a "subunit," in Pasco County. The agency, according to the definition of home health care agency, is also constituted of subdivisions which may not take on the form of the parent facility or subunit offices. Those nurse practitioners to be dispatched by the Petitioner into Hillsborough and Manatee Counties are an arm or subdivision of the organization and as such, home health agencies in their own right. The activities of their counterparts in Pinellas and Pasco Counties have been scrutinized in the Certificate of Need review process related to the Pinellas and Pasco practices and duly recognized and licensed. No comparable event has occurred related to the proposed services to be offered by these subdivisions to be found in Hillsborough and Manatee Counties and review must be made of those activities and a Certificate of Need successfully obtained before the present license may be amended to allow an expansion into Hillsborough and Manatee Counties.
To conclude, the expansion of service area through subdivisions of the organization is an event requiring review and issuance of a Certificate of Need or formerly a Statement of Need. This review has not been accomplished and declaration of need has not been made which speaks to activities of the agency in Hillsborough and Manatee Counties, and an amended license allowing activities in Hillsborough and Manatee Counties on the part of the home health agency cannot be issued. This conclusion takes into account the licensing activities related to Petitioner's operations before and through the present proceeding.
In that connection, the Petitioner has failed to satisfactorily establish entitlement to a Certificate of Need for Hillsborough and Manatee Counties based upon proof of compliance with appropriate criteria related to the issuance of a Certificate of Need for the new services, as set forth in Chapter 381, Florida Statutes.
The agency in carrying out its function of review has acted in accordance with the provisions of Chapters 381 and 400, Florida Statutes, with due regard for consistency in dealing with this Petitioner as compared to other home health agencies seeking similar license recognition, as more completely described in the findings of fact.
Petitioner's claim of estoppel related to the necessity for Certificate of Need review in this case is not well-founded. The agency has properly applied the statutes and rules and has been consistent in the treatment of this Petitioner compared to other similarly affected home health agencies, with the exception of Roberts' Home Health Service. That one instance does not establish a pattern of conduct on the part of the agency that can be described as arbitrary and that would lead to a waiver of the requirements of Certificate of Need review for the proposed activities in Hillsborough and Manatee Counties. Likewise, the initial impressions gained by department staff related to the Petitioner's ability to expand operations into Hillsborough and Manatee Counties without further Certificate of Need review was in no way arbitrary and cannot be viewed as the representation of a material fact concerning denial or grant of the license upon which Petitioner relied to its detriment. On this occasion, the proposed final agency action was not in favor of the Petitioner and the Petitioner was ill advised to expend time and money in preparing to serve the patients in Hillsborough and Manatee Counties without a knowledge of the proposed final agency action based upon its interpretation of the outcome gained by assessment of preliminary staff analysis of this project and treatment of other applicants. Those expenditures were not at the instigation of the Respondent based upon some specific material fact or facts set forth in the proposed agency action which tended to identify for the Respondent that a license allowing services in Hillsborough and Manatee Counties would be granted and Petitioner may not now claim estoppel in order to avoid the Certificate of Need review process and to make itself whole related to its expenditures.
Absent specific communication to the Petitioner along the lines of the circumstance related to the right to expand into Pasco County that occurred in 1977-78, Petitioner is not entitled to relief from the Certificate of Need review process based upon principles of estoppel.
At the conclusion of the hearing, the parties were afforded the opportunity to offer proposed findings of fact and conclusions of law and Recommended Orders and associated legal memoranda in argument. No additional post hearing filings were requested or authorized. Therefore, in the interest of fairness and in keeping with the Hearing Officer's intention that the matter be closed at the conclusion of the hearing January 10, 1984, those motions for reconsideration of an evidential ruling and to offer additional legal argument as supplement to original argument are denied.
That a final order be entered which denies Petitioner's requested amendment to its home health agency license which would allow provision of home health services in Hillsborough and Manatee Counties.
DONE AND ENTERED this 9th day of May 1984, in Tallahassee, Florida.
CHARLES C. ADAMS
Filed with the Clerk of the Division of Administrative Hearings this 9th day of May, 1984.
C. Timothy Corcoran, III, Esquire CARLTON, FIELDS, WARD, EMMANUEL, SMITH & CUTLER, P.A.
Robert P. Daniti, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Leonard A. Carson, Esquire Michael M. Parrish, Esquire CARSON & LINN, P.A.
David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
