Judges: DIANE K. KIESLING
Agency: Agency for Health Care Administration
Latest Update: Mar. 18, 1985
Summary: Health care provider's application for Certificate of Need (CON) should be denied where need methodology reveals no need in both district and subdistrict under rule.
84-0230STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HEALTH QUEST REALTY XI, d/b/a ) REGENCY PLACE OF CAPE CORAL, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0230
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDATION
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, DIANE K. KIESLING, held a formal hearing in this case on September 11, 1984, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Charles M. Loeser
Assistant General Counsel Health Quest Realty XI
315 West Jefferson Boulevard South Bend, Indiana 46601
For Respondent: John F. Gilroy, Legal Intern
Culpepper, Turner & Mannheimer
318 North Calhoun Street Post Office Drawer 11300
Tallahassee, Florida 32302-3300
By stipulation of the parties, the sole issue is whether there is a need for the proposed 120-bed nursing home facility in Lee County, Florida.
The Petitioner, Health Quest Realty XI, d/b/a Regency Place of Cape Coral, (hereinafter Health Quest), presented the testimony of Fred E. West, who was accepted as an expert in health care planning. The Respondent, Department of Health and Rehabilitative Services, (hereinafter DHRS), presented the testimony of Elizabeth Dudek, who was accepted as an expert in Certificate of Need (CON) review and application of the DHRS need methodology to CON applications.
Respondent introduced one exhibit, Respondent's Exhibit 1. Four joint exhibits were admitted, Joint Exhibits 1-4.
The parties filed proposed findings of fact and conclusions of law as permitted, and Health Quest also filed a post-hearing brief. All proposed
findings of fact and conclusions of law have been considered. To the extent that the proposed findings and conclusions submitted are in accordance with the Findings, Conclusions and views submitted herein, they have been accepted and adopted in substance. Those findings not adopted are considered to be subordinate, cumulative, immaterial, unnecessary, or not supported by the credible evidence. 1/
FINDINGS OF FACT
Health Quest filed an application for a Certificate of Need (CON) to construct a 120-bed nursing home facility in Lee County, Florida. The application was dated June 24, 1983, was filed on June 27, 1983, and projected the project cost to be $5,557,000.
The application was denied by DHRS by letter dated December 19, 1983.
Based on the stipulation of the parties, the application met all of the criteria of Section 381.494(6)(c), Florida Statutes, and Rule 10-5.11, Florida Administrative Code, except for Rule 10-5.11(21), hereinafter referred to as "the bed need methodology."
The relevant service area for determination of need is the Lee County subdistrict of DHRS District B.
The district poverty ratio is .68; the bed need ratio is 18.3 beds per 1000 for District B. For District 8, the projected 1987 elderly population is 213,561, and for Lee County it is 69,649.
By applying the bed need ratio to the projected elderly population, a raw numeric need is established of 3,910 beds for District 8 and 1,275 beds for Lee County.
In District 8 there are 3,671 beds licensed and 1,053 beds approved, for a total bed inventory of 4,724 beds. This exceeds the numeric need of 3,910 and results in no need showing.
In Lee County there are 808 beds licensed and 332 beds approved, for a total bed inventory of 1,140 beds. This is less than the numeric need of 1,275 and results in a need showing for Lee County.
Where there is no need in the District and need in the subdistrict, subsection 10-5.11(21)(e)(1) becomes operative and the situation is denoted as "c2".
For category c2, the current utilization threshold is 90 percent occupancy in the subdistrict. Lee County, with a current utilization of 95.5 percent meets this threshold.
By applying the occupancy rate of 95.5 percent to the 808 licensed beds, it is determined that the patient census for Lee County is 772.
For a c2 subdistrict the prospective base rate of utilization is 80 percent. The limit for projected need for the subdistrict is the maximum number of beds for which the census would produce an occupancy rate of 80 percent. Here, patient census of 772 divided by 80 percent produces a limit of 965.
The inventory of 1,140 beds in the subdistrict is greater than the limit for projected need.
Approval of additional beds would be inconsistent with these calculations of need under Rule 10-5.11(21).
Lee County has a low supply of nursing home beds in comparison with the remainder of District 8. District 8 has a low supply of nursing home beds in comparison with the remainder of the State of Florida.
The beds currently in operation in Lee County are being fully utilized. Nursing home facilities do not operate at 100 percent capacity. For all practical purposes, a 95.5 percent occupancy rate indicates full utilization.
There are currently four approved nursing home facilities in Lee County.
DHRS has received no correspondence from residents of Lee County or other interested persons indicating the presence of waiting lists at existing nursing home or claiming the unavailability of accessible nursing home facilities in the service area.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1983).
Section 381.494(6)(c), Florida Statutes, requires DHRS to review applications for CON's to determine the need for the proposed facility. The methodology for determining need for nursing hone beds is set forth in Rule 10- 5.11(21), Florida Administrative Code. An application of the need methodology to the facts in this case demonstrate the lack of need for the services offered by Health Quest. Under the rule, calculations required by subsection (b) indicate there is no need for additional beds in the district because there are 814 excess licensed and approved beds. Under subsection (c), there is a need in the subdistrict because there are fewer licensed and approved beds than the indicated numeric need. In a situation where there is no need shown in the district and need shown in the subdistrict, subsection (e), part (1) of the rule leads to what has been referred to as a little c2 situation. Subsection (f) is satisfied in this case because the current utilization rate in the subdistrict is greater than 90 percent. Where the requirements of subsection (f) are met, analysis must be performed under subsection (g). Analysis under subsection (g) shows that the inventory of beds in the subdistrict is greater than the projected need for this subdistrict and granting of additional beds would result in a prospective utilization rate of less than 80 percent. The prospective utilization rate is determined by reference to subsection (h). Therefore, the conclusion is that application of rule 10-5.11(21)(b)-(h) shows that there is no need for additional nursing home beds in the Lee County subdistrict.
Essentially Health Quest urges that the limits set forth in rule 10- 5.11(21)(g) do not actually reflect the need far services in Lee County and have no relation to actual need for services. Instead, Health Quest proposes that
other indications of need be considered in lieu of the methodology set forth in this subsection. This proposal is contrary to the rule provisions which indicate that the need methodology of subsections (b)-(h) be applied to each case and that a result under the need methodology be determined. There is no provision made in the rule for bypassing or eliminating any parts of the need calculation itself.
Essentially, Health Quest proposes that an alternative methodology be used. The existence of an alternative methodology is immaterial when a valid rule methodology exists. The need determination calculations proposed by Health Quest include a significant deviation from the rule methodology. Health Quest's suggestion that DHRS may choose whether or not to apply subsection (g) of the need methodology, depending on the circumstances of the case, is inappropriate and inconsistent with dictates of subsection (a) of the rule.
Health Quest further argues that the integrity of subsection (g) of the methodology is suspect since calculations would be unreliable in a subdistrict having zero existing beds or a very small number of existing beds. It is recognized that such situation would require a reasonable interpretation of the rule in order to adequately reflect need. However, in this case, Health Quest produced no evidences that the Lee County subdistrict would fit into one of these exceptional situations.
Having concluded that the need methodology contained in Rule 10- 5.11(21) is the controlling methodology for the determinations of the need in this case, it is important to note that this need methodology is not conclusive in effect, but allows DHRS to approve applications where no need is shown under the methodology when extenuating circumstances support the issuance of the CON. In relevant part, the rule states:
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 the subsections (21)(b), (c), (d), (e), (f), (g), and (h) of this rule.
The discretion to consider extenuating circumstances does not allow for elimination of any part or parts of the need calculation itself, nor does it permit use of an alternative methodology. Instead, it places the burden on the applicant of proving entitlement to the license and of showing extenuating circumstances which would support issuance of the CON despite the rule determination that no need exist. In order to carry this burden, the applicant would need to show that special circumstances exist in which application of the need methodology alone is abnormally unrealistic or problematical in terms of provisions of necessary services. In order to carry this burden, the applicant may point to unique local circumstances which show that unusual conditions exist.
Here, Health Quest did not present competent substantial evidence to support a finding that such extenuating circumstances exist. Health Quest presented evidence of construction delays and of the radio between hospital beds
and nursing home beds in the subdistrict. However, no evidences was presented that established that these factors are unique to the subdistrict or are of such an extenuating nature that necessary services are not available at the local level. No evidence was presented of services been currently or potentially unavailable to area residents because of these factors. It is therefore concluded that no extenuating circumstances exist which would mandate approval of this application despite the finding of no need under the applicable need methodology.
Health Quest also relies extensively on a finding of need in a Recommended Order in Community Health Association, Inc. v. DHRS, DOAH Case No. 83-615. That Recommended Order found a need for a total of 1,522 nursing home beds in Lee County by 1986. Health Quest urges that this case establishes a fact in issue, i.e., the need for beds in Lee County, and that the conclusion that 1,522 beds were needed remains valid and conclusive in this action. A review of that case shows a number of factual distinctions, including the nature of the construction project proposed, prevalence of excessively high utilization of existing facilities, and geographic access problems proposed to be alleviated by the applicant in that case. It is also noted that the nature of the order is a Recommended Order and that no final order by DHRS was shown to exist. It is concluded that the finding and conclusions in this previous case are not dispositive or controlling here. Health Quest may not substitute this Recommended Order for proof of facts and may not satisfy its burden of proof through use of such a document.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Health Quest for a Certificate of Need
to construct a 120 bed nursing home facility in Lee County, Florida be DENIED. DONE and ENTERED this 29th day of January, 1985, in Tallahassee, Florida.
DIANE K. KIESLING
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 29th day of January, 1985.
ENDNOTE
1/ Specifically, the following proposed findings have been adopted in substance: Petitioner's 1, 2, 4, 5, 8, 11, 12, 13, and 19 and Respondent's 1,
2, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15. Respondent's 3 and Petitioner's
3, 7, 11, 24, 25, 26, 27 and 28 are rejected as being unnecessary. Petitioner's
6, 10, 20 and 22 are modified; Petitioner's 9, 18 and 21 are immaterial;
Petitioner's 14 is cumulative. Petitioner's 14, 15, 16, 10(e), 18(f), 23, 24,
29, 30, 31 and 32 are rejected as unsupported by the competent, substantial evidence or as a conclusion of law.
COPIES FURNISHED:
Charles M. Loeser Assistant General Counsel Health Quest Realty XI
315 West Jefferson Boulevard South Bend, Indiana 46601
John F. Gilroy, Esquire
318 North Calhoun Street Post Office Drawer 11300
Tallahassee, Florida 32302-3300
David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewoodp Boulevard
Tallahassee, Florida 32301
Docket for Case No: 84-000230
Orders for Case No: 84-000230
| Issue Date |
Document |
Summary |
|
Mar. 14, 1985 |
Agency Final Order
|
|
|
Jan. 29, 1985 |
Recommended Order
|
Health care provider's application for Certificate of Need (CON) should be denied where need methodology reveals no need in both district and subdistrict under rule.
|
