STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
BEVERLY ENTERPRISES-FLORIDA, ) INC., d/b/a BEVERLY GULF COAST )
FLORIDA (Seminole), )
)
Petitioner, )
)
vs. ) CASE NO. 84-0022
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
and )
) FLORIDA LIVING NURSING CENTER ) INC., )
)
Intervenor. )
) FLORIDA LIVING CARE, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 84-0227
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
and )
) FLORIDA LIVING NURSING CENTER, ) INC., )
)
Intervenor. )
)
RECOMMENDED ORDER
Pursuant to Notice, this cause was heard by Ella Jane P. Davis, the assigned Hearing Officer of the Division of Administrative Hearings, on September 4-7, 1984 in Orlando, Florida and September 26, 1984 in Tallahassee, Florida.
APPEARANCES
Representing Petitioner BEVERLY ENTERPRISES (BEVERLY):
E. G. Boone, Esquire and Robert T. Klingbeil, Egg. Post Office Box 1595 Venice, Florida 33595
Representing Petitioner FLORIDA LIVING CARE (FLC):
Karen L. Goldsmith, Esquire and John Grout, Esquire
Suite 610, Eola Office Center 605 East Robinson Street Orlando, Florida 32891
Representing Respondent DEPARTMENT OF HEALTH AND
REHABILITATIVE SERVICES (HRS):
Thomas W. Stahl, Esquire
318 North Calhoun Street Tallahassee, Florida 32301
Representing Respondent FLORIDA LIVING NURSING
CENTER (FLNC):
Robert D. Newell, Jr., Esquire 646 Lewis State Bank Building Tallahassee, Florida 32301
PROCEDURAL BACKGROUND
In July, 1983, Florida Convalescent Center (FCC), Beverly Enterprises Florida, Inc. (BEVERLY), Florida Living Care, Inc. (FLC) and Florida Living Nursing Center, Inc. (FLNC) applied for certificates of need (CON) to build nursing homes in Seminole County, Florida. Each application sought 120 nursing home beds. FLNC is the only applicant which proposed an alternative of 60 beds; FLNC's application was partially granted and the Department of Health and Rehabilitative Services (HRS) issued a CON for a 60-bed addition to FLNC's existing nursing home in Seminole County. FCC, BEVERLY, and FLC filed petitions challenging the denial of their respective applications and the grant of the 60- bed CON to FLNC. FLNC was a named Respondent in FCC's challenge in Case 84-0222 and, pursuant to an Order authorizing cross intervention, dated June 29, 1984, became an intervenor in FLC's Case No. 84-0227 and BEVERLY's Case No. 84-0022.
FCC filed notices of voluntary dismissal in Case Nos. 93-3900 and 84-0222 before the final hearing. At hearing, all three remaining applicants filed revised 60- bed CON applications.
At the formal hearing, BEVERLY called 17 witnesses and had admitted 18 exhibits, including composites, with one more for proffer only. FLC called 7 witnesses and had admitted 19 exhibits, including composites, with one for I.D. only. FLNC called 3 witnesses and had admitted 11 exhibits, including composites. HRS called 2 witnesses. The Hearing Officer Exhibits were admitted.
A number of post-trial motions were filed and considered. The date of the order disposing of the last of these was January 30, 1985.
Proposed findings of fact and conclusions of law were filed by all parties.
Several parties also filed memoranda of law. All submissions have been considered and weighed in light of the record and in preparation of this Recommended Order. When a party's proposed findings of fact were consistent with the weight of the credible evidence admitted, they were adopted and are reflected in this Recommended Order. To the extent that the findings of fact proposed by a party were not consistent with the weight of the credible evidence, they have been either rejected or, where possible, modified to conform
to the evidence. To the extent proposed findings of fact have not been adopted or are inconsistent with the findings herein, they have been specifically rejected as irrelevant or not supported by the evidence. A ruling on each proposed finding of fact has thereby been made either directly or indirectly except where the proposed finding of fact was cumulative,, immaterial or unnecessary.
ISSUE
The ultimate issue, by comparative hearing, is which applicant has submitted an application best meeting the criteria of Section 381.494(6)(c), Florida Statutes and Rule 10-5.11, Florida Administrative Code.
STIPULATIONS
At the formal hearing, all parties stipulated that, as a matter of law and fact, there are 60 nursing hone beds needed to be allocated to one of the parties in these proceedings; that the criteria in Section 381.494(6)(c)(4), (6), (10), and (11) Florida Statutes were not applicable to this case and that the parties need not demonstrate compliance therewith.
FINDINGS OF FACT
The stipulations immediately above are adopted in toto as a finding of fact. (See January 30, 1984 Order herein).
It is typically more cost-efficient to add 60 beds to an existing nursing home than to construct a free-standing 60-bed nursing home.
In comparing competing projects' costs, total cost per bed (including financing, development, and construction costs) is a more accurate indicator of true financial cost of a project than is cost per square foot. Also, cost per bed is more accurate reflection of what the community must pay for a nursing facility than cost per square foot, since cost per bed takes into account the financing, developing, and construction costs. By comparison, BEVERLY's cost per bed is $19,000, FLC's cost per bed is 21,083 and FLNC's cost per bed is
.$18,335. 1/
BEVERLY is a for-profit corporation. By its revised CON application, it proposes a 60-bed addition to its existing 120-bed nursing home, Longwood Health Care Center, located in Seminole County, Florida. BEVERLY has operated the Longwood facility for only 3 years. It is operated under an assumption of lease. Dan Bruns, Director of Acquisitions and Development for BEVERLY, testified that the corporate resolution (B-3) is the authorization for BEVERLY's CON application but that exhibit does not reference the revised 60 bed CON application. Upon the lease terms at Longwood and the corporate resolution,
BEVERLY's authority to carry through with a 60 bed addition is suspect.
FLC is a six-person investment group which has as yet selected no site and has no firm commitment to a specific site or geographic area within Seminole County for its project. Indeed, the entity which will own the FLC project's physical plant has not yet been created. FLC's revised CON application proposes construction of a 120-bed facility with 60 skilled nursing home beds and 60 beds
dedicated for an "adult congregate living facility" (ACLF). ACLFs are exempt from Florida statutory and Florida Administrative Code requirements of qualifying for a CON through Respondent HRS. An effect of this exemption is to make FLC's 60/60 plan generally cost-competitive in light of this order's Fact Paragraph 2, above. 2/ FLC's ACLF portion is designed to comply with all regulations for a skilled nursing facility.
FLNC, is a not-for-profit corporation. FLNC is within the health and educational hierarchy of the Seventh Day Adventist faith. Under a recent lease, FLNC is currently operated by Sunbelt Health Care Systems, which operates 26 hospitals and 4 nursing homes, two of which are in Florida. FLNC proposes a 60- bed addition on the same level as its existing 104-bed nursing home in Forest City, Seminole County, Florida. This is to be accomplished by constructing on the north side of the existing nursing home a two story structure with 60 nursing beds on the second floor and the bottom or first floor to be shelled-in space. Shelled-in space in nursing homes is permitted by HRS policy and FLNC proposes this bottom or first floor will be designed to meet all construction and fire codes for a nursing home as well as for an ACLF.
Since FLNC's property falts off severely to the north, this proposal constitutes the best and highest use of the property owned by FLNC from an architectural and design point of view. The roofing concept is energy-efficient and the top floor or proposed 60-nursing bed area will be accessible from the existing facility without ever leaving covered or heated space. There will be no significant emergency evacuation problem resulting from this FLNC design and no undue inconvenience to visitors utilizing the parking lot.
FLC's and FLNC's proposals have the potential advantage for future "CON competitions" of conversion space if HRS ever allocates more nursing beds to Seminole County in the future. This aspect is immaterial to the issues presented by the present CON applications.
BEVERLY is the largest nursing home corporation in the United States and encourages the inference to be drawn that its centralized management has the plus of "corporate giant" purchasing power enabling it to obtain best prices for commodities and to obtain the choicest of staff applicants. FLC asserts similar superiority in national recruitment and hiring practices although upon a much narrower base. Neither of these applicants' assertions was established as a significant variable by competent substantial evidence. FLNC makes no similar assertions.
FLC further asserts that it is in an advantageous position with regard to quality of care because it is able to transfer nurses and much of its other staff from facility to facility among its several nursing homes. This assertion has some merit but its financial advantage is offset by FLC's pattern of staffing at a higher level than necessary, the costs of which must eventually be passed on to the patients. As to affirmatively demonstrating superior quality of care, it has limited weight as applied to the facts of this case.
BEVERLY's projected total cost for the 60-bed addition is $1,140,000. On a per bed basis, that computes to $19,000 per bed. BEVERLY's total construction cost (including labor, material, contingency, and inflation) is
$804,000 but an unknown amount per square foot. By this finding, BEVERLY's premise that its total projected construction cost computes at $50.77 per square foot and the other parties' contention that BEVERLY's cost is $61.84 per square foot are both specifically rejected. 3/
FLC's projected total cost of its facility is $2,300,000. BEVERLY's premise with regard to a contingency fund for FLC was not affirmatively demonstrated, but FLC somewhat arbitrarily allocates 55 percent of its total (or
$1,265,000) to the 60-bed nursing home segment. On a per bed basis, this is
$21,083 per bed contrary to FLC's assertion of $19,166 per bed. FLC's projected total construction cost of the total proposed facility (nursing wing and ACLF) is $1,488,800, which FLC breaks down as $818,840 or $44.82 per square foot within the nursing home segment/wing. This testimony is, however, somewhat suspect because FLC's architect, Monday, admitted he had not personally prepared these construction costs and because the figure set aside by FLC for land/site acquisition is pure speculation in light of FLC's failure to commit to a specific geographical location. Real property prices and availability are clearly notstatic, known factors, and fluctuations in price have not been adequately accounted for by this FLC estimate. Further, FLC admits its figures on the basis of 55 per cent, are not as accurate as using dollar figures.
FLNC's projected total cost for its 60-bed nursing home segment/wing addition is $1,100,113. On a per bed basis, that computes to $18,335 per bed. FLNC's total construction cost is $854,913 or a projected $51.00 per square foot within the new nursing segment/wing addition. FLNC is the only applicant whose projected cost per square foot falls within the HRS' experience concerning average cost per square foot of nursing homes. BEVERLY's premise that FLNC should have allowed a contingency fund for adjustments in design and construction so as to comply with local ordinances, for sewerage connection, for drainage, for retainage walls and for a variety of other purely speculative construction problems which BEVERLY failed to affirmatively demonstrate would inevitably develop from FLNC's existing site or proposed project is specifically rejected. Also rejected hereby is BEVERLY's suggestion that FLNC's method of calculating fixed and moveable equipment costs together somehow camouflages FLNC's construction costs. While that may be the ultimate result of this method in some situations, both HRS regulations and good accounting practices permit fixed equipment to be broken out as either construction or equipment costs. It is not appropriate for the finder of fact to adjust a reasonably allowable calculation of an applicant in the absence of clear evidence rendering such reasonably allowable calculation inappropriate to specific circumstances.
BEVERLY provided only an outline of its existing Longwood building on the site. It gives no elevations. (B-13) FLC submitted a schematic drawing (FLC-12) but did not submit a site plan. FLNC submitted both a site plan and a schematic drawing of its existing facility as well as its proposed facility (FLNC-11). Further, FLNC-2 (Table 16) shows FLNC's ancillary areas as adequate and available to that applicant's proposed 60 nursing bed addition. 4/
As stated, BEVERLY did not submit floor or site plans for its existing
120 nursing bed facility. Without such plans, it is difficult to analyze the existing ancillary areas or the proposed room relationships/configuration which will result from construction of the new 60 bed nursing segment/wing.
BEVERLY proposes to add 60 beds to the Longwood facility by "repeating" a patient wing. The existing facility currently consists of right and left patient wings branching off from an ancillary area hub. The new 60-bed segment wing is planned to contain 28 semi-private (2 bed) rooms and four private (1 bed) rooms, but since there is no architect's design schematic
drawing, blueline, etc., to establish precisely how the rooms will be laid out, to a degree, the configuration must be conjectured on whether a left or right wing is the wing repeated. Because of the lack of a clear architectural plan, there is no resolution of much conflicting evidence offered by BEVERLY's own expert witnesses including total square footage.
Also, for its new proposed segment/wing, BEVERLY only submitted a site plan drawing so that particularly wanting is any valid method by which the undersigned may compare BEVERLY's application and proposed plans for its bathroom facilities to be located in the new 60 nursing bed segment/wing proposed for the BEVERLY Longwood facility with bathroom facilities proposed by the other two CON applicants. BEVERLY's architect, Fletcher, testified there will be two central baths in the new wing to serve the private rooms, but even he could not confirm the number of baths in the new wing. Therefore, much information concerning bathroom facilities is missing from BEVERLY's revised application.
FLC's nursing home segment will amount to 18,270 square feet of new construction which computes to 305 gross square feet per bed unless the shared ancillary areas are considered. Because ancillary areas must be considered, the foregoing figures are reduced by 5,500 square feet to 12,770 square feet or a low of 212.8 gross square feet per bed in FLC's proposed nursing home segment/wing.
FLNC's proposed 60 nursing bed segment/wing will amount to 16,763 square feet, or 279 gross square feet per bed. FLNC's existing ancillary facilities will also adequately and efficiently service the proposed 60 nursing bed segment/wing. One reason for this is that FLNC's existing ancillary facilities space is excessive by current licensure requirements. For instance, modern regulations require only 9 square feet per bed for the dining area. Due to Hill-Burton grant standards requiring 30 square feet when FLNC's existing facility was built, this and all other existing ancillary areas at FLNC were built considerably larger than if the existing facility were being constructed today solely to comply with HRS licensure requirements. FLNC's proposal takes advantage of this situation to reduce construction costs.
FLC's floor plan is a "cookie-cutter" concept already successfully applied by this corporate applicant in several locations. In particular, it differs from BEVERLY's plan (or lack of plan) and FLNC's plan because it contemplates allocating four beds instead of two beds per toilet and provides a communal shower layout for the same four beds.
FLNC's application plans contemplate 26 semiprivate (2 bed) rooms and eight private (single bed) rooms. Each room, regardless of designation, will have its own toilet. At FLNC, the maximum number of patients obliged to share a toilet or
lavatory will be two.
All three applicants meet the state minimum requirements of ratio of toilets to beds, but it is axiomatic that the two persons per toilet ratio as apparently proposed by BEVERLY and as definitely proposed by FLNC is a preferable factor in rating quality of care than is the four persons per toilet proposed by FLC. FLC's plan is less desirable for encouraging privacy, dignity, and independence of nursing home patients than
are the other two plans.
BEVERLY's proposed wing will be 100 per cent financed by a bank letter of credit with an interest rate of 13 percent over 20 years, however, this letter only references BEVERLY's original 120 new-bed CON application and is silent as to its subsequent (revised) 60-bed application. In short, its financing commitment is dependent upon BEVERLY's being named the successful CON applicant.
FLC's financing situation involves a combination of equity and bank financing and is not firm. Its investment group will seek a loan for 90 percent of the amount needed from Barnett Bank. Financing is not solidly committed as to loan amount, loan term, or interest rate and is therefore inadequate. Analyses of "creditworthiness" of an applicant and "financial feasibility" pronouncements by a lending institution do not equate with a firm commitment to loan amount, term and interest.
FLNC's financing is guaranteed up to $1,300,000 by a letter of commitment from the Florida Conference Association of Seventh Day Adventists at
12 per cent interest for 20 years. The background of FLNC's relationship with this denominational financial "parent" provides an encouraging prognosis for long range as well as immediate success and stability of FLNC's project if it is the successful CON applicant.
The projected Medicaid and Medicare utilization figures of all three of the applicants contain elements of speculation. 5/ Moreover, after a facility has been opened for 5 or 6 years there is a greater incentive to seek private pay patients because the reimbursement is higher than Medicaid. However, the actual commitment figures provided by the parties does provide a valid comparison factor.
BEVERLY's commitment to Medicare is 2 percent. BEVERLY has not committed and is not prepared to commit a specific percentage of the stipulated
60 beds to Medicaid participation. Although BEVERLY's application projects 33 percent Medicaid in the second year of operation, its Director of Acquisitions and Development, Dan Bruns, could not definitely commit to continue admission of
83 percent Medicaid beds in the 120 + 60-bed configuration using Longwood.
FLC has committed 10 percent of the total stipulated 60 beds to Medicare., FLC has committed 52 percent of the stipulated 60 beds to Medicaid participation, but in light of FLC's withdrawal from Medicaid participation at one of its facilities and subsequent transfer of Medicaid patients, FLC's commitment here may be viewed as revocable as well.
Although FLNC does not project strong Medicare involvement, FUN will be Medicaid and Medicare certified and has committed 50 per cent (50 percent) of the beds in the total facility [existing beds (104) + proposed beds if it is the successful CON applicant (60) for a total commitment of 164/2 = 84 beds] to Medicaid participation. FLNC intends only to enlarge Medicare beds in its existing 104 bed facility. FLNC intends to seek Veteran's Administration Certification. Moreover, FLNC's existing facility was principally funded with Hill-Burton grant money and FLNC annually repays its original loan through delivery of free service to indigent persons. Among the three applicants, FLNC's Hill-Burton obligation, enforced by financial considerations, demonstrates both a strong (14 years) "track record" of FLNC's accessibility to the medically indigent and traditionally underserved in the community as well as a strong indicator of continued accessibility to this segment of the community.
FLNC has the lowest charge rate of all three applicants while spending more dollars on patient care than the respective averages of the other two applicant's facilities and this ratio is significant in assessing and comparing both quality of care and availability to the medically underserved of the Seminole County "community."
BEVERLY's existing Longwood facility has been a BEVERLY operation less than three years (since August, 1982) and has had a "standard" rating up through the date of hearing.
FLC plans to construct an entirely new facility and so has no current license to review. All of its existing homes have standard ratings.
FLNC's existing facility has been operating 14 years and has had a "standard" or equivalent rating except for a three months "conditional" rating before return to "standard".
BEVERLY staffs all of its beds for skilled patients and commingles its skilled and intermediate patients. FLC staffs all its beds for skilled patients. Although HRS encourages "higher" staffing, this policy can increase costs to patients.
FLNC's plan is to create a discreet intermediate wing which, although licensed for skilled beds, will be primarily used for intermediate level patients.
Except as indicated infra geographic location of BEVERLY's Longwood facility and of FLNC within Seminole County is not a significant variable. FLC cannot be compared geographically because it has not yet selected a site.
FLC proposes one administrator for the combined ACLF and nursing home. The administrator's salary will be allocated between the ACLF and the nursing home. FLC does not specify the proportion of salary attributable to the ACLF.
FLNC has had the same administrator for fourteen years
BEVERLY's Longwood facility and FLNC have established monthly in- service training for staff members. All three applicants project in-service training and volunteer activity programs if granted the CON.
FLC has demonstrated its other existing nursing homes have the most varietal and aggressive patient activity programs utilizing outside community volunteers This and its in-service programs are part of an internal quality control system labelled "Quest for quality". FLC also embraces the idea of using numerous visiting contract consultants in a variety of disciplines such as psychology and nutrition. FLC nursing homes also are active members of a number of national quality control professional groups.
By contract, the Orange County Board of Education uses FLNC's existing nursing home as a laboratory for nurses' aide training for the Apopka High School. Also, FLNC permits use of its existing facility as a laboratory for the geriatric training program of Florida Hospital's Licensed Practical Nurse School. These programs could be extended to include the proposed segment/wing and are symbiotic relationships significantly benefiting the quality of care of nursing home patients as well as the student interns. FUC participates with HRS in a program for those adjudicated to do community service in Seminole County.
BEVERLY's recent creation of an assistant to the president slot to oversee quality of patient life is commendable, but located at the highest corporate level, and in another state, this benefit will be somewhat diluted at the point of delivery in Seminole County, Florida. This individual's first responsibility is to the corporate shareholders not to a specific nursing home's patients and staff.
As to all three applicants, administrative complaints by themselves are both irrelevant and immaterial to this de novo proceeding. Particularly, complaints are immaterial unless they result in an adjudication. Dismissals and settlements without adjudication or admission of guilt are of no probative value. Moreover, in light of testimony of the HRS licensure representative that there is no nursing home in Florida which has not been cited at least once, deficiency ratings brief in duration in proportion to many years of operation are of little significance or probative value. 6/
BEVERLY and FLC contended that FLNC's affiliation with the Christian religious denomination of Seventh Day Adventists somehow diminishes FLNC's application. This position was not established by direct credible evidence on any of the strategic tangents it took at the formal hearing.
Admission data provided for the existing FLNC facility indicates that whether measured by policy and statistics or by admissions, FLNC is not restricted by religious faith or affiliation. By this finding of fact, a convenient "draw" of FLNC from a nearby Seventh Day Adventist retirement center has not been ignored nor has evidence that many of the admissions drawn from this retirement community appear to be "repeaters" at the existing FLNC nursing home been ignored, but this corollary may be attributed to the natural proclivity of the retired and elderly to account for a large percentage of the nursing home beds consumed in any locality, and upon this analysis the 15 per cent to 20 per cent (15-20 percent) draw of FLNC from this source could be as much geographically as religiously induced.
Failure to repeat attempts at placement of patients at FLNC color the credibility of the testimony of most witnesses who infer a religious barrier to placement of patients at FLNC. Teresa S. Shaw is Director of Social Services, Florida Hospital, Altamonte. In light of that acute care hospital being Part of the Seventh Day Adventist faith's health and educational hierarchy, somewhat greater weight might be placed on her analysis if she felt religion played a part in FLNC's acceptance or rejection of patients. However, she testified she did not know of FLNC's affiliation. This, together with the actual admissions data provided by FLNC, supports this finding of no religious barrier. Unavailability of beds at FLNC has no probative value for charges of religious discrimination either. 7/
Suggestions that the Seventh Day Adventist dietary restrictions against consumption of animal-protein and caffeine and against tobacco-smoking in its nursing homes somehow reduces the quality of nursing home care at FLNC are rejected as unproved. First, it was never established that smoking benefits quality of care, but in any case, FLNC, like all certified nursing homes, complies with the requirement of providing a smoking area. Second, consumption of caffeine and animal-protein can obviously create numerous health and sanitary problems for those incontinent patients who often comprise a large percentage of
any nursing home population. Third, it was never established that caffeine or animal-protein benefits the quality of nursing home care. Moreover testimony of FLNC's administrator clearly indicates that at FLNC patients' diets are established by the attending physician and that patients' families may bring in items not normally served by FLNC if this supplementation is permitted on the diet prescribed by the attending physician. It is the physician, not the nursing home, that has ultimate dietary authority.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause.
The stipulations of the parties stated above are adopted in their entirety here as a conclusion of law. Therefore, at issue only are Sections 381.494(6)(c), (7), (8), (9) and (12), Florida Statutes. Conclusions of law are not required as to the applicability of Rule 10-5.11(2) and Sections 381.494(6)(c)(1) and subsections (4), (6), (10) and (11).
FLNC is the only applicant to have met its initial burden in the de novo procedure to establish that it meets all necessary statutory criteria at issue for obtaining a certificate of need.
FLNC's construction plans are overall superior for cost and energy efficiency. FLNC's revised application is superior to FLC's revised application because FLNC proposes to add beds to an existing home rather than build a new freestanding facility, and it is superior to BEVERLY'S application because FLNC has better demonstrated the existence of usable excess capacity in its existing ancillary areas. Among the three applicants, FLNC's proposals most efficiently utilize existing ancillary space.
FLNC has affirmatively demonstrated the lowest total project costs; reasonable equipment costs, and the lowest total cost per bed among the applicants.
FLNC has demonstrated the only truly firm financing commitment. FLC's commitment is clearly conditional.
As among the three applicants, FLNC's Hill-Burton obligation to the traditionally underserved is impressive as is its 14 year "track record" in this regard. Also in light of the policy of the administrator of the Community Medical Facilities to condition approval of a CON on a commitment in the application to accept at least a percentage of Medicaid patients, it is concluded that of these three applicants, FLNC will best serve the traditionally underserved in the community.
After considering all submissions of counsel, and upon the foregoing findings of fact and conclusions of law determined after reviewing those submissions, it is,
RECOMMENDED:
That HRS issue a certificate of need for a 60-bed addition to FLORIDA LIVING NURSING CENTER, INC's Seminole County facility, with total project cost not to exceed $1,100,113.00 and area not to exceed 16,763 square feet and deny the other applications.
DONE and ENTERED this 8th day of May, 1985 in Tallahassee, Florida.
ELLA JANE P. DAVIS
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 8th day of May, 1985.
ENDNOTES
1/ In the instant case, a valid comparison of the price per square foot cannot be made because there is not sufficient credible like data per project. See findings of fact, infra. This leaves the only true common denominator for comparison as cost per bed.
2/ A notable exception to this generalization is FLC's failure to select and commit to a building site; other exceptions are set out in subsequent findings of fact, infra.
3/ In its revised CON application and proposed Order, BEVERLY represents a
$50.77 per square foot construction cost. It arrives at this figure by not including its 14 percent contingency fund as part of the total construction cost. This contingency amounts to $114,000 of the $804,000 figure set out in Fact Paragraph 10 above. BEVERLY argues that it is unfair to include BEVERLY's contingency fund in construction costs if the other parties have erroneously failed to break out a contingency or have broken out an inadequate contingency, but BEVERLY has failed to affirmatively demonstrate such "failings" by the other two applicants. (Fact Paragraphs 11 and 12 infra.) Based upon Beverly's figures independently calculated and upon testimony that a 3-5 percent contingency is reasonable, BEVERLY's 14 percent contingency fund indeed must be calculated as part of BEVERLY's anticipated construction costs. However, BEVERLY's true cost per square foot cannot be accurately determined or compared in light of BEVERLY's failure to adequately establish or allocate square footage.
4/ Lack of elevation information renders it impossible for the undersigned to independently calculate the space in the ancillary areas of BEVERLY's existing Longwood facility. Without site plans, there is no accurate indication of the relationship of the building to the site as well as whether there will be enough parking and whether, in the case of BEVERLY at least, the proposed building can attach to the existing building.
5/ In making this finding, the evidence of Dr. Bodo has not been ignored or overlooked, but much of it has been rejected for the same reasons set out in footnote 5, infra. Specifically, for purposes of this finding of fact it is noted that Dr Bodo's report made no effort to determine the actual prevailing Medicaid rate of utilization in Seminole County and to apply that rate to the figures of these three applicants.
6/ In making this finding, BEVERLY's or FLC's allegations and argued legal premises concerning each other's and FLNC's deficiencies or FLNC's minimal 3 months' conditional rating have not been ignored, nor has there been a failure to consider a variety of exhibits of little probative value or Dr Bodo's analysis that FLC is a superior applicant on the basis of deficiency ratings of the other two applicants. However, Dr Bodo's conclusion is flawed because of the absence of a complete data base: He averaged in his management survey (without any adequate explanation) BEVERLY's existing 33 Florida homes, against all 7 of the FLC homes and the single FLNC home. Further, he selected for his survey's deficiency analysis time period that brief 3 months during which FLNC had a conditional rating out of its entire 14 year history of standard ratings.
7/ In light of FLNC's having the lowest charge rate of all the facilities while spending more money on patient care than the respective averages of the other applicants' facilities, testimony that beds are unavailable at FLNC because of religious barriers is not credible. It is more reasonable and likely that FLNC had beds unavailable because these beds are more desirable and are rapidly filled. (See Fact Paragraph 27).
COPIES FURNISHED:
E. G. Boone, Esquire and Robert T. Klingbeil, Esquire Post Office Box 1596
Venice, Florida 33595
Karen L. Goldsmith, Esquire and John Grout, Esquire
Suite 610, Eola Office Center 605 East Robinson Street Orlando, Florida 32801
Robert D. Newell Jr., Esquire Oertel & Hoffman, P.A.
2700 Blairstone Road Tallahassee, Florida
Robert D. Newell, Jr., Esquire Suite B
200 South Monroe Street Tallahassee, Florida 32301
Thomas W. Stahl, Esquire
318 North Calhoun Street Tallahassee, Florida 32301
Douglas L. Mannheimer, Esquire
300 East Park Avenue
P. O. Drawer 11300
Tallahassee, Florida 32302-3300
David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
Theodore E. Mack, Esquire Assistant General Counsel Department of Health and Rehabilitative Services Building One, Suite 407 1323 Winewood Boulevard
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Aug. 29, 1985 | Final Order filed. |
| May 08, 1985 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 27, 1985 | Agency Final Order | |
| May 08, 1985 | Recommended Order | Issue a Certificate of Need (CON) to Florida Living Nursing Care for new nursing home beds. |
