HEALTH CARE AND RETIREMENT ) CORPORATION OF AMERICA, d/b/a ) HEARTLAND OF MANATEE, )
vs. ) CASE NO. 84-3336
Respondent. )
Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, duly designated Hearing Officer of the Division of Administrative Hearings, on March 26, 1985, in Bradenton, Florida, and March 29, 1985, in Tallahassee, Florida.
G. Steven Pfeiffer, Esquire LARAMORE & CLARK, P.A.
John F. Gilroy, Esquire CULPEPPER, TURNER & MANNHEIMER
The Petitioner, Health Care and Retirement Corporation of America, d/b/a Heartland of Manatee (hereinafter referred to as "HCR"), filed an application for a certificate of need to construct a 120 bed nursing home in Manatee County, Florida. By letter dated July 30, 1984, the Respondent, the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department"), gave notice of its intent to deny the application. HCR timely filed a request for a formal administrative hearing. HCR's request was forwarded to the Division of Administrative Hearings where it was assigned case number 84-3336.
The parties have entered into a prehearing stipulation. In pertinent part, the parties agreed to the following:
At the final hearing, HCR presented the testimony of Joyce Kessler, Russell Kitching, Bernice Brasnell, Jerrold W. Schwarz and Jay Cushman. Mr. Cushman was accepted as an expert in health planning related to nursing home assessment of need and financial feasibility relating to need studies. Mr. Kitching was accepted as an expert in service need assessment for aging persons in Manatee County.
HRC offered Petitioner's Exhibits 1-11. All were accepted into evidence except Petitioner's Exhibit 3 and Petitioner's Exhibit 9. Petitioner's Exhibit
3 was withdrawn by HCR. A ruling on Petitioner's Exhibit 9 was reserved. Petitioner's Exhibit 9 is hereby accepted into evidence.
The Department presented the testimony of Joanne Hager and Elizabeth Dudek.
Ms. Dudek was accepted as an expert in certificate of need review and health planning.
The Department offered DHRS's Exhibits 1-8. All were accepted into evidence.
The parties submitted proposed findings of fact pursuant to Section 120.57(1)(b)4, Florida Statutes (1984 Supp.). A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where a proposed finding of fact has been rejected as subordinate, cumulative, immaterial or unnecessary.
HCR is a health care corporation. Its sole business is designing and constructing nursing homes. During the twenty years it has been in the business, HCR has built approximately 180 nursing homes. HCR currently operates approximately 10,000 nursing home beds in twelve states including Florida.
HCR filed an application for a certificate of need to construct a 120 bed nursing home in Manatee County. The Department denied this request.
The only issue in this case is whether there is a need for a 120 bed nursing home facility in Manatee County. If such a need exists, the Department has agreed that HCR "meets all applicable statutory and rule criteria."
The need for nursing home beds is determined under Rule 10-5.11(21), Florida Administrative Code. Rule 10-5.11(21)(a), Florida Administrative Code, contains the following Department goal:
The Department will consider
applications for community nursing home beds in context with applicable statutory and rule criteria. 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 subsections (21)(b), (c), (d), (e), (f), (g), and (h) of this rule.
Rule 10-5.11(21)(b), Florida Administrative Code, provides for a determination of bed need three years into the future "according to the methodology specified under subparagraphs 1 through 10." Under the methodology provided in subparagraphs 1 through 10, need is determined on a subdistrict basis if a departmental service district has been divided into subdistricts. Manatee County is located in District 6. District 6 has been divided into subdistricts for purposes of determining nursing home bed need. Manatee County has been designated as a subdistrict. Rule 10-17.018, Florida Administrative Code. Therefore, nursing home bed need is to be determined under the methodology of Rule 10-5.11(21), Florida Administrative Code, for Manatee County.
The parties have agreed and the evidence proves that there is no need for nursing home beds in Manatee County based upon an application of the methodology of Rule 10-5.11(21), Florida Administrative Code (hereinafter referred to as the "Formula"). In fact, an application of the Formula indicates that there will be an excess of 105 nursing home beds in Manatee County three years into the future based upon the following:
876 nursing home beds needed - (765 existing beds + 90 percent of 240 approved beds)
= (105).
Based upon an application of the Formula, there is clearly no need for any additional nursing home beds in Manatee County. This determination, however, does not totally resolve the issue in this case.
Rule 10-5.11(21)(b), Florida Administrative Code, provides that the Department is to determine bed need according to the Formula "[i] n addition to other statutory and rule criteria . . . " Also, Rule 10-5.11(21)(b)10, Florida Administrative Code, provides in relevant part, the following:
In the event that the net bed allocation is zero, the applicant may demonstrate that circumstances exist to justify the approval of additional beds under the other relevant criteria specifically contained in the Department's Rule 10-5.11.
Based upon these provisions of the Department's rules, it appears clear that if no nursing home bed need is shown to exist based upon an application of the Formula, other statutory and rule criteria should be considered, i.e., are there adequate like and existing services in the subdistrict? Rule 10-5.11(21)(b)10, Florida Administrative Code, however, goes on to provide:
Specifically, the applicant may show that persons using existing and like services are in need of nursing home care but will be unable to access nursing home services currently licensed or approved within the subdistrict. Under this provision, the applicant must demonstrate that those persons with a documented need for nursing home services have been denied access to currently licensed but unoccupied beds or that the number of persons with a documented need exceeds the number of licensed, unoccupied and currently approved nursing home beds.
Existing and like services shall include the following as defined in statute or rule, adult congregate living facilities, adult foster homes, homes for special services, home health services, adult day health care, adult day care, community care for the elderly, and home care for the elderly.
Patients' need for nursing home care must be documented by the attending physicians' plans of care or orders, assessments performed by staff of the Department of Health and Rehabilitative Services, or equivalent assessments performed by attending physicians indicating need for nursing home care.
As discussed under the Conclusions of Law, infra, this portion of the Department's rule (hereinafter referred to as the "Specific Exception") is not the only alternative method of demonstrating a need for nursing home beds when there appears to be no need based upon an application of the Formula. A need for nursing home beds can be demonstrated even if there is no need indicated under the Formula and the Specific Exception is not complied with based upon a consideration of other statutory and rule criteria. The Specific Exception is, however, the only method by which an applicant can demonstrate the need for a new nursing home facility based upon an access problem in the relevant service district.
HCR has attempted to prove there is a need for its proposed 120 bed facility based in part upon a consideration of Rule 10-5.11(3)(a)-(d), Florida Administrative Code. This rule provides generally for a consideration of the extent to which all residents of the service area and, in particular, low income persons, the elderly and others, can access existing nursing home beds.
In particular, HCR has attempted to prove that there is a need for a
120 bed nursing home because of alleged access problems under Rule 10- 5.11(3)(a)-(d), Florida Administrative Code, during the "peak season" in Manatee County and alleged access problems of Medicaid patients, Alzheimer patients and respite care patients. As discussed under Conclusions of Law, infra, HCR has failed to comply with the Specific Exception in attempting to demonstrate need for its proposal under Rule 10- 5.11(3)(a)-(d), Florida Administrative Code. Therefore, any evidence concerning access problems cannot be considered.
HCR has also attempted to demonstrate need for its proposal based upon an application of Rules 10-5.11(4) and (6), Florida Administrative Code. These rules require a consideration of the availability of alternative, less costly, or more effective methods of providing the proposed health services and the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services. In particular, HCR has attempted to prove that like and existing services in Manatee County are not meeting the needs of Alzheimer patients and respite care patients and that there are no alternative, less costly or more effective methods of providing HCR's proposed services. If HCR had succeeded in demonstrating need for its proposal under these rules, a certificate of need would have been recommended even though the Specific Exception was not complied with.
HCR has agreed that its proposed facility will meet the alleged need for Medicaid patients, Alzheimer patients and respite care patients in Manatee County by dedicating a thirty- bed wing to the care of Alzheimer patients, a thirty-bed wing to respite care patients and guaranteeing access to fifty percent of its beds to Medicaid patients.
The following findings of fact are made with regard to the specific categories of persons allegedly in need of nursing home care. Although HCR's proposed findings of fact concerning access problems of these groups are not relevant because of its failure to comply with the Specific Exception, findings are made in an abundance of caution in case the Department or a Court ultimately determines that need can be demonstrated based upon access problems even when the Specific Exception is not complied with.
Medicaid Patients.
Manatee County generally experiences a "peak season" from November to March during which time nursing home bed use increases. The peak season in 1984-1985, however, was only about seven weeks.
During the peak season there is some difficulty in placing Medicaid patients in nursing home beds in Manatee County. Between January, 1985 and March, 1985, the Department's Manatee County office placed twenty-two Medicaid patients in nursing home beds located outside of Manatee County.
Some Medicaid patients have also been placed in adult congregate living facilities even though such placements are contrary to the prohibition against placing patients in need of skilled nursing home services in such facilities.
L. W. Blake Memorial Hospital has also had to place patients in nursing homes on a temporary basis outside of Manatee County. During the past year, only twenty-four patients were placed in nursing homes outside Manatee County. The evidence does not establish how many of those patients were Medicaid patients, however.
Alzheimer Patients.
Alzheimer's disease is a disease which primarily afflicts persons in their 50's and 60's. It can, however, afflict younger persons also. The disease progresses through three stages and has no cure. During the first stage, the afflicted person experiences forgetfulness, impairment of judgement and inability to perform routine tasks. During the second stage, the afflicted person begins to wander. During the third and final stage, the afflicted person becomes dependent and incontinent.
Currently there are approximately 160 Alzheimer patients in the five existing nursing homes in Manatee County. None of these nursing homes has a special program designed for Alzheimer patients. The evidence does not, however, support a finding that Alzheimer patients are not being adequately cared for.
The evidence also does not establish how many persons in Manatee County are afflicted by Alzheimer's disease or the number of persons so afflicted who are in need of nursing home care. Generally, it is not until the third stage of the disease that nursing home care becomes necessary. Even then some Alzheimer patients are cared for in the home, private boarding facilities, or mental hospitals.
The evidence does establish that no person afflicted with Alzheimer's disease has been refused admittance to a nursing home bed in Manatee County.
The evidence also establishes that there is a 303 bed nursing home located in neighboring Hillsborough County which treats only Alzheimer patients. Hillborough County is located in District 6.
Finally, the evidence demonstrates that Alzheimer patients would benefit from a special wing dedicated to the care of Alzheimer's disease in its final stages.
Respite Care Patients.
Respite care is the placement of a person in need of care under the supervision of another person for a short period of time. One purpose of this care is to free-up the primary care giver for a short period of time. The patient needs supervision or may need skilled nursing care. The length of the care can vary from a few hours to several weeks.
HCR has proposed to establish a thirty-bed wing in its proposed facility that will be dedicated solely to the care of respite care patients in need of skilled nursing care for a period of one to eight weeks.
None of the existing nursing homes in Manatee County provides the type of specialized wing HCR in proposing. The evidence establishes that there is a need for such a service in Manatee County. The evidence does not establish, however, how many nursing home beds are needed. There was testimony that there was a need for fifty nursing home beds. This testimony was, however, purely a "guess". Additionally, this estimate was not limited to the type of respite care HCR proposes to provide; the respite care giving rise to this guess included respite care for as short a period as three to five days. Short-term respite care needs are currently being met by existing programs in Manatee County. DHRS Exhibit 4 does not corroborate the fifty bed estimate because it is not at all clear what the data on this Exhibit means.
Based upon the foregoing, there is a need for nursing home beds for Medicaid patients during the "peak season" and for respite care patients in need of skilled nursing care for a period of one to eight weeks because of an access problem. The need of these patients, however, has not been properly demonstrated pursuant to the Specific Exception and therefore cannot be considered. If this need could be considered even though the Specific Exception has not been complied with, the evidence fails to demonstrate how many additional beds are needed. Additionally, two new nursing homes have been approved for construction which will add 240 nursing home beds in Manatee County. The addition of these beds will eliminate some, if not all, of the need of Medicaid patients.
There is a need for nursing home beds for respite care patients in need of skilled nursing care for a period of one to eight weeks because of the lack of adequate like and existing services. HCR has, however, failed to prove that this need is sufficient to justify its proposal.
The evidence fails to demonstrate a need for Alzheimer patients sufficient to justify HCR's proposal based upon the care presently being given to Alzheimer patients in Manatee County. Although the ability of Alzheimer patients to access beds is not relevant because of HCR's failure to comply with the Specific Exception, the evidence also fails to demonstrate any access problem of Alzheimer patients.
Alzheimer patients would benefit from a dedicated nursing home wing. This finding, however, based upon the other findings of fact in this case, does not justify HCR's proposal.
Even if it were concluded that HCR does not need to comply with the Specific Exception in this case, the evidence does not support a finding that a
120 bed facility should be approved. The only evidence as to the total number of nursing home beds allegedly needed in Manatee County was presented by Mr. Jay Cushman, an expert in the field of health planning. According to Mr. Cushman there is a need for a minimum of 193 additional nursing home beds in Manatee County. Mr. Cushman's opinion was based upon the criteria of Rules 10- 5.11(3)(a)-(d), (4) and (6), Florida Administrative Code. In particular, Mr. Cushman relied upon the effect on nursing home bed use of Manatee County's peak season and the needs of Alzheimer patients, respite care patients and Medicaid patients.
Mr. Cushman's opinion was based upon his determination that there is a need for a total of 1,174 nursing home beds in Manatee County. This figure was arrived at by adding Mr. Cushman's projected need for Medicaid patients (40 beds), Alzheimer patients (121 beds), respite care patients (50 beds) and the current peak census of nursing homes in Manatee County (718 beds). The sum of
these figures was multiplied by 1.137 (to account for population growth in Manatee County over the next three years) and the result was divided by ninety percent (to account for a maximum occupancy rate of ninety percent).
Mr. Cushman's determination of need, to the extent his figures are based upon purported access problems associated with Medicaid patients, Alzheimer patients, respite care patients and persons in need of care during the peak season, should not and cannot be considered because of the lack of compliance with the Specific Exception. Since Mr. Cushman did take into account alleged access problems without complying with the Specific Exception in arriving at his conclusion that 193 nursing home beds are needed in Manatee County, Mr. Cushman's opinion of need is rejected.
Even if it was proper for Mr. Cushman to consider access problems despite the failure to comply with the Specific Exception, the weight of the evidence does not support Mr. Cushman's opinion. In arriving at his estimate of the need for Medicaid patients, Mr. Cushman relied in part upon the fact that twenty-four patients (twenty-five according to Mr. Cushman) had been placed in nursing homes located out of Manatee County by L. W. Blake Memorial Hospital personnel. The evidence, however, does not prove that all of these patients were Medicaid patients.
Mr. Cushman's determination that 50 beds are needed for respite care patients was based upon on the opinion of Mr. Russell Kitching. Mr. Kitching's estimate was rejected, supra.
The most significant problem with Mr. Cushman's determination of bed need is his estimate of the need for Alzheimer's patients. The evidence does not support a conclusion that there is a need for additional nursing home beds for Alzheimer's patients. The evidence proved that no Alzheimer's patient in Manatee County has been denied access to a nursing home.
Finally, Mr. Cushman's opinion is contrary to, and did not take into account, the fact that Manatee County is projected to have an excess of 105 nursing home beds under the Formula.
Based upon the foregoing, it is concluded that HCR has failed to prove that there is a need for a 120 bed nursing home in Manatee County.
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 (1984 Supp.).
To the extent that conclusions of law have been made under the Findings of Fact portion of this Recommended Order, they are incorporated herein.
The hearing was a de novo proceeding. See Florida Department of Transportation v. J. W. C. Company, Inc., 296 So.2d 778 (Fla. 1st DCA 1981). HCR bears the burden of proof as to its entitlement to a certificate of need. Id.
This ease involves the question of whether a certificate of need for the construction of a 120 bed nursing home bed in Manatee County should be issued to HCR. This decision is governed by the provisions of Sections
381.494(6)(c) and (d), Florida Statutes (1984 Supp.), and the Department's rules promulgated under those Sections of Florida Statutes. The only issue to be decided, however, is whether there is a need for the proposed facility. If such a need exists, the parties have stipulated that HCR should be granted a certificate of need.
Nursing home bed need is initially determined under the Formula of Rule 10-5.11(21)(b), Florida Administrative Code, three years into the future. The Department will "not normally" approve an application if such approval would cause the number of nursing home beds in the service district to exceed the number of nursing home beds needed based upon an application of the Formula.
In this case, the Formula is applied on a subdistrict basis. Manatee County has been designated as the subdistrict for purposes of determining nursing home bed need. Rule 10-17.018, Florida Administrative Code.
Based upon an application of the Formula, Manatee County, will have an excess of 105 nursing home beds. Therefore, the Department should "not normally" approve HCR's application.
Rule 10-5.11(21)(a), Florida Administrative Code, provides that the Department will determine if there is a projected need for new or additional beds under the Formula "[i]n addition to other relevant statutory and rule criteria . . . ." Rule 10-5.11(21)(b)10, Florida Administrative Code, also provides that if there is no bed need based upon an application the Formula "the applicant may demonstrate that circumstances exist to justify the approval of additional beds under the other relevant criteria specifically contained in the Department's Rule 10-5.11." [Emphasis added] .
Rule 10-5.11(21)(b)10, Florida Administrative Code, goes on to provide a "specific" method of proving that there is a need for nursing home beds despite a determination of no need based upon an application of the Formula: the Specific Exception quoted, supra. This Specific Exception has not been met by HCR. The Department has argued that HCR has therefore failed to meet its burden of proving that there is a need for nursing home beds in Manatee County. HCR has argued that a need for a new nursing home can be demonstrated under the other relevant criteria of the statutes and rules even though the Department's Specific Exception has not been complied with.
Rule 10-5.11(21)(b)10, Florida Administrative Code, is not so plain and ambiguous as to fix the legislative intent and leave no room for construction, making clear only one meaning, as argued by the Department. Therefore, the rules of statutory construction require that the rule be construed in accordance with the intent and purpose of other related rules and statutes. City of Boca Raton v. Gidman, 440 So.2d 1277 (Fla. 1983).
Section 381.494(6)(c), Florida Statutes (1984 Supp.), requires that certain criteria be considered in determining whether to grant a certificate of need for a new nursing home. Consistent with those criteria, the Department has promulgated Rule 10-5.11, Florida Administrative Code. All of the criteria contained in the statutes and the Department's rules must be considered in determining whether a certificate of need should be granted. Consistent with this conclusion, the Department has provided in Rule 10-5.11(21), Florida Administrative Code, that all of the relevant criteria which must be considered will be considered even if the Formula indicates no need for additional or new nursing home beds.
The Department has provided a "specific" method of proving need: the Specific Exception. The Specific Exception, however, does not take into account all of the relevant criteria the Department is required to consider under Section 381.494(6)(c), Florida Statutes (1984 Supp.). For example, Section
381.494 (6)(c)2, Florida Statutes (1984 Supp.), requires a consideration of:
The availability, quality of care, efficiency, appropriateness, accessibility extent of utilization, and adequacy of like and existing health care services and hospices in the service district of the applicant.
If individuals are able to get into Manatee County nursing homes but those facilities are not efficient, appropriate, adequate or providing quality of care, the Specific Exception probably cannot be complied with. Despite the inability to demonstrate need by use of the Specific Exception a consideration of Section 381.494(6)(c)2, Florida Statutes (1984 Supp.), would necessitate a conclusion that nursing home beds should be approved.
Based upon the foregoing, it is concluded that where an application of the Formula indicates no need for additional or new nursing home beds and the Specific Exception is not met, a certificate of need should still be issued if the need for a facility is demonstrated based upon an application of all of the other statutory criteria and the "other relevant" criteria of Rule 10-5.11, Florida Administrative Code. The crucial issue in this case, however, requires a determination of which of the relevant criteria can be relied upon to demonstrate need where the Specific Exception to the Formula is not complied with.
In determining whether there is a need for a new nursing home, the relevant criteria can be divided into two general categories: those indicating the number of beds needed (based upon a consideration of population and other factors and accessibility) and other criteria. The first category, number of beds needed, is in the nature of a mathematical calculation. Under this category of criteria, it can initially be demonstrated that based upon the population of an area and other factors "X" beds are needed. The Department has provided for the use of the Formula to make this determination. If it is determined under the Formula that there are 1000 beds needed and there are 1000 licensed beds in existence, no need would be demonstrated. Such a determination, as the Department has recognized, does not always indicate there is an adequate number of beds, however. For example, if the 1000 licensed beds are only 80 percent occupied and it is shown that 200 people in need of care have been denied access to the 200 empty beds because they are Medicaid patients or for some other reason, it may be proper to determine that there is a need for additional nursing home beds despite an application of the Formula. A similar determination would be appropriate if it were proved that the 1000 licensed beds were occupied but there were other persons in need of nursing home care.
Based upon an application of the other category of criteria, a need for nursing home beds could be demonstrated even though there appears to be an adequate number of accessible nursing home beds. For example, if there were 1000 beds needed and licensed in a subdistrict, all those beds were occupied and it is not demonstrated that anyone in need of nursing home care has been denied access, it is possible that it could be demonstrated that the care being given
was totally inadequate. Under such circumstances it could be concluded that there was a need for additional nursing home beds even though there exists an adequate number of beds.
In order to apply the general category of criteria involving the number of nursing home beds needed, the Department has provided the use of the Formula and the Specific Exception. The Formula is to be used to determine generally the number of beds needed. The Specific Exception is to be used to determine if there is a need for additional beds where an applicant believes that persons in need of care have been denied access because of their status (Medicaid patients, the indigent, etc.) or because of an inadequate number of beds. The Specific Exception of Rule 10-5.11(21)(b)10, Florida Administrative Code, is the only method by which an applicant can demonstrate a need for additional beds based upon an inability to access a bed, however.
If no need is indicated based upon an application of the Formula and the applicant cannot demonstrate a need based upon an access problem pursuant to the Specific Exception, the applicant can still demonstrate need based upon other relevant criteria.
HCR has attempted to demonstrate need for its proposed facility based upon a consideration of both general categories of criteria. First, HCR has attempted to demonstrate that there is a need for an additional number of nursing home beds because of alleged access problems of Medicaid patients, Alzheimer patients and respite care patients. HCR has, however, failed to demonstrate such access problems in the manner required by the Department under the Specific Exception to the Formula.
Secondly, HCR has attempted to prove that there is a need for its proposal under other relevant criteria. In particular, HCR has attempted to prove like and existing services are not meeting the needs of Alzheimer patients and respite care patients and that there are no alternative, less costly or more effective methods of providing HCR's proposed services. The Department's rules allow for a demonstration of need for a facility under these other relevant criteria even if the Department's Specific Exception has not been complied with. HCR has, however, failed to prove sufficient need under these other criteria for its proposal.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the certificate of need application filed by HCR for a
120-bed nursing home to be located in Manatee County be denied.
DONE and ENTERED this 2nd day of August, 1985, in Tallahassee, Florida.
LARRY J. SARTIN
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of August, 1985.
G. Steven Pfeiffer, Esquire LARAMORE & CLARK, P.A.
325 N. Calhoun Street Tallahassee, Florida 32301
John F. Gilroy, Esquire CULPEPPER, TURNER & MANNHEIMER
P. O. Drawer 11300 Tallahassee, Florida 32302
David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
