STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES )

)

Petitioner, )

)

vs. ) CASE NO. 83-3894

) BEVERLY ENTERPRISES-FLORIDA, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on May 1, 1984, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Douglas L. Mannheimer, Esq.

CULPEPPER, TURNER & MANNHEIMER

Post Office Drawer 11300 Tallahassee, Florida 32302

For Respondent: E. G. Boone, Esq. and

Stephen Boone, Esq. Post Office Box 1596 Venice, Florida 34284

By Petition dated November 4, 1983, Beverly Enterprises-Florida, Inc., by and through its attorney, requested an administrative hearing to contest the revocation by the Department of Health and Rehabilitative Services (DHRS) Petitioner, of six nursing home beds from Certificate of Need No. 1463. By letter dated September 28, 1983, DHRS notified Respondent that six of the 120 nursing home beds authorized in CON No. 1463 had not been under continuing construction since July 5, 1983, when 114 of the authorized 120 beds were licensed as nursing home beds. Accordingly, the CON for those six beds had become null and void.

At the hearing Petitioner called one witness, Respondent called two witnesses, and 26 exhibits were offered into evidence. All exhibits were admitted except Exhibit 18, the objection to which was sustained. There is no real dispute as to the facts here involved.

Proposed findings submitted by the parties, insofar as they are included herein, are adopted; otherwise, they are rejected as not supported by the evidence or immaterial or unnecessary to the results reached.

FINDINGS OF FACT

1. On February 19, 1981, Certificate of Need No. 1843 was issued to Medical Investment Corp. to construct and operate a 120-bed nursing home in Tallahassee, Florida. Thereafter, status reports were filed by Medical Investment Corp. at regular intervals; a six-month extension was granted of the time in which the project was to be completed; and Beverly Enterprises-Florida, Petitioner, acquired the assets of Medical Investment Corp.

   
   

2. Construction of the nursing home remained on schedule; however, before opening, Beverly Enterprises decided to experiment with the concept of converting some of the rooms to Adult Congregate Living Facilities (ACLF) rooms. Without major structural change, six of the authorized nursing home rooms were converted and two storerooms in the same wing were modified to create a 12-bed ACLF with four private and four semi-private rooms.

   
   

3. On or before the scheduled date to open the facility as a nursing home, the facility was sufficiently complete to obtain a certificate of occupancy from the local building official and licenses from Respondent. In accordance with Respondent's desires, a license was issued on June 9, 1984, for a 12-unit ACLF and on July 5, 1983, for a 114-bed nursing home. License No. p-2-37-0224 was issued for the ACLF and License No. 1274 for the 114-bed nursing home.

   
   

4. Respondent intended the ACLF to serve Alzheimer's patients in stages 1 and 2 who needed supervision but not the nursing home care that was required as the disease progressed in later stages. These rooms were furnished comparable to that of a nice Holiday Inn (Exhibit 14). Respondent's rates for the ACLF rooms are $50 per day semi-private and $55 per day private.

   
   

5. After being notified that the CON for 120 beds had been reduced to the

   114 beds licensed by Petitioner because those six beds were not under continuous construction after they were licensed as ACLF beds on June 9, 1983, Respondent filed this petition to contest the conclusion of Petitioner that those six beds had become null and void by reason of not being under construction at the conclusion of the time period authorized for the project. Respondent had not made final payment to the contractor during this period, a punch list of items requiring completion before final payment was provided to the contractor, one additional dryer was installed in the laundry room as required by the plans and specifications, and modifications to two linen lockers were completed after the

   114 beds were licensed. As a result of this work, Respondent contends that construction was not complete and was perforce continuing after the license was issued.

   
   

6. As a matter of agency policy Petitioner considers construction complete when the facility is ready for occupancy and is licensed to accept patients.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

8. Section 381.494(8)(f)1., Florida Statutes, provides: (f)1. A certificate of need shall

   terminate 1 year after the date of

   issuance unless the applicant has com- menced construction, if the project

   provides for construction . . . or unless the certificate-of-need validity period is extended by the department for an additional period of up to 6 months,

   upon a showing of good cause, as defined by rule, by the applicant for the ex- tension. The department shall monitor the progress of the holder of the certi- ficate of need in meeting the timetable for project development specified in the

   application and may revoke the certificate of need, if the holder of the certificate is not meeting such timetable and is not making a good faith effort, as defined

   by rule, to meet it.

   
   

9. Rule 10-5.13, Florida Administrative Code, provides in pertinent part:

   
   

   1. A Certificate of Need issued under the provisions of the Health Facilities and Health Services Planning Act, as amended, shall be valid for a period of

      12 months from the date issued and shall become null and void upon conclusion of the 12 month period unless the project is under construction, if construction is involved, or the validity of the Cer- tificate is extended for not more than

      6 months by the department prior to con- clusion of the 12 month period, upon show of good cause for the extension.

      Total time extension of the validity of a certificate shall not exceed 6 months and the certificate shall become null and void at the conclusion of the

      extended validity time period unless the project is under construction, if con- struction is involved. . . . To reinstate an expired Certificate, an applicant

      will be required to submit a new appli- cation for review and approval. . . .

      
      

   2. The department shall monitor the progress of the holder of the certifi- cate of need in meeting the timetable for project accomplishment, as speci-

      fied by the applicant in his application, and may revoke the certificate, after consideration of recommendations of the appropriate HSA, at any time prior to project finalization if the holder of certificate of need is not meeting his specified project accomplishment time- table and is not making a good faith effort to meet it. The holder of

      a certificate of need shall provide the department a status report of

      project accomplishment as of the con- clusion of each four months subsequent

      to the issuance of the certificate. . . .

      
      

10. The sole issue in these proceedings is whether construction was completed, for certificate of need purposes, when the facility was licensed; or whether construction on these six disputed beds was continuing after they were licensed as ACLF beds.

    
    

11. No certificate of need is required to operate an ACLF. Some evidence was produced that Respondent had inquired about dual licensure for these beds as ACLF and nursing home beds, but the inquiry was not responded to by Petitioner.

    
    

12. The project was ready for licensure when the certificate of occupancy was received, was so licensed, and commenced admitting patients. At this time the construction was complete despite a punch list of minor corrections, touch- up painting, and the addition of the third dryer in the laundry. Although the contractor had not received his final payment, it does not follow that construction, as that term is used in Section 380.494, Florida Statutes, was not complete.

    
    

13. It could be said that the six rooms in question were completed before the other 114 rooms subsequently licensed were completed simply by reason of the fact that these six rooms were licensed as an ACLF nearly a month before the remaining 114 beds were licensed as nursing home beds. Certainly these six rooms were at least as complete as the other 114 beds, which were ready for occupancy and licensed as nursing home beds on July 5, 1983. At that time continuing construction was not ongoing and no good faith effort was being made to license these six rooms as nursing home beds.

    
    

14. From the foregoing it is concluded that construction of six beds as nursing home beds in the approved 120-bed nursing home was not continuous and ongoing after June 9, 1983, when these beds were licensed as ACLF beds and this condition continued at least until September 28, 1983, when Petitioner was notified that the certificate of need for these six beds had become null and void. It is

RECOMMENDED that Respondent be required to return Certificate of Need No.

1463 and a new certificate of need be issued to Respondent authorizing the construction and operation of a 114-bed nursing home in Leon County.

ENTERED this 25th day of June, 1984, at Tallahassee, Florida.

K. N. AYERS, 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 25th day of June, 1984.

COPIES FURNISHED:

Douglas L. Mannheimer, Esq. CULPEPPER, TURNER & MANNHEIMER

Post Office Drawer 11300 Tallahassee, Florida 32301

E. G. Boone, Esq. Stephen Boone, Esq. Post Office Box 1596 Venice, Florida 34284

David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard

Tallahassee, Florida 32301

Docket for Case No: 83-003894

Orders for Case No: 83-003894