susan l. stockham-moscaVs.harden king|Department of Health|d... -- eLawyers

Judges: J. LAWRENCE JOHNSTON
Agency: Department of Health
Latest Update: May 07, 1986
Summary: Rule need for new home health agency only in one county. Application would serve under served Medicaid patients irrelevant to Medicare certified home need.

85-1751.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ENGLEWOOD HOME HEALTH CARE, INC., )

)

Petitioner, )

)

vs. ) Case No. 85-1751

) CON NO. 3618

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) PERSONNEL POOL OF SOUTHWEST ) FLORIDA, INC., )

)

Petitioner, )

)

vs. ) Case No. 85-2072

) CON NO. 3617

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) DESOTO MEMORIAL HOSPITAL, )

)

Petitioner, )

)

vs. ) Case No. 85-2109

) CON NO. 3616

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

) PERSONNEL POOL OF SOUTHWEST ) FLORIDA, INC., )

)

Petitioner, )

)

vs. ) Case No. 85-1407

) CON NO. 3478

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

For Petitioner Englewood Home Health Care, Inc.:

Susan L. Stockham-Mosca, Esquire 2032 Hillview Street

Sarasota, Florida 33579

For Petitioner Personnel Pool of Southwest Florida, Inc.: Thomas D. Watry, Esquire

1200 Carnegie Building

133 Carnegie Way Atlanta, Georgia 30303

For Petitioner DeSoto Memorial Hospital:

Martha J. Edenfield, Esquire Oertel & Hoffman, P.A.

2700 Blair Stone Road, Suite C Tallahassee, Florida 32301

For Respondent Department of Health and Rehabilitative Services:

Harden King, Esquire Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

The final hearing in these cases was held in Sarasota on January 27 and 28, 1986. The parties ordered a transcript of the final hearing, and the transcript was filed on February 28, 1986. The parties asked for and received until March 27, 1986 in which to file proposed recommended orders.

The general issue for determination at the final hearing was to have been whether Respondent Department of Health and Rehabilitative Services (HRS) should grant the competing applications of the Petitioners Englewood Home Health Care, Inc. (Englewood Home Health), Personnel Pool of Southwest Florida, Inc. (Medical Personnel Pool) and DeSoto Memorial Hospital (DeSoto Memorial) for certificates of need prerequisite to operating Medicare-certified home health services in HRS District

VIII. But at the final hearing, Englewood Home Health voluntarily dismissed its petition and application. The

remaining parties then stipulated to consolidation of DOAH Case No. 85-1407 with the remaining cases for purposes of the final hearing and the record. The parties stipulated that the Medical Personnel Pool application under consideration in Case No. 85- 1407 should not be compared to the other applications but should be given prior consideration by HRS. As a practical matter, the stipulation of the parties for consolidation of Case No. 85-1407 effectively moots the Medical Personnel Pool application in Case No. 85-2072 and eliminates any competitive comparison of the applications of the two remaining applicants, Medical Personnel Pool and DeSoto Memorial.

In the Pre-Hearing Stipulation filed in this case, the parties stipulated in pertinent part:

The applicable statutory criteria are:

Section 381.494(6)(C)(a)[Sic] as it relates to the District Plan; Section 381.494(6)(C)(2); Section 381.494(6)(C)(3);

Section 381.494.(6)(C)(8); Section 381.494(6)(C)(9); Section 381.494(6)(C)(12) .

The following statutory criteria are not applicable to this cause: Section 381.494(6)(C)(4); Section 381.494(6)(C)(6); Section 381.494(6)(C)(7); Section 381.494(6)-

(C)(10); Section 381.494(6)(C)(ll); Section 381.494(6)(C)(13).

Otherwise, the parties stipulated that both Medical Personnel Pool and DeSoto Memorial "meet all of the requirements for the issuance of a CON, including financial feasibility." The primary issue therefore became the need for the services proposed by Medical Personnel Pool and DeSoto Memorial.

EVIDENTIARY MATTERS

After the final hearing, the parties pointed out errors in the transcript of the final hearing that was prepared and filed. Corrections stipulated to by the parties have been made and initialed by the Hearing Officer on the original transcript.

At the final hearing, Medical Personnel Pool Exhibits 1 through 17 were offered and received in evidence. DeSoto Memorial Exhibits 1 through 3 also were offered and received in evidence. Finally, HRS Exhibits 1 through 3 were offered and received in evidence.

FINDINGS OF FACT

The Applicants And Their Applications
1. Petitioner, Medical Personnel Pool of Southwest Florida, Inc. (Medical Personnel Pool), is a wholly-owned subsidiary of Medical Personnel Pool, Inc., an operating division of Personnel Pool of America, Inc., a wholly-owned subsidiary of H & R Block, Inc. Personnel Pool of America, Inc., operates 215 home health agency offices in 42 states and in Canada, 145 of which are Medicare-certified. In Florida, Medical Personnel Pool, Inc., operates 27 offices, 5 of which are Medicare-certified. Medical Personnel Pool's corporate headquarters are in Fort Lauderdale, Florida.
2. Medical Personnel Pool has applied for a Certificate of Need for Medicare-certified home health services in Lee, Collier and Charlotte counties in HRS District VIII. The services are proposed to be provided out of Personnel Pool's existing Fort Myers office which has been in operation over ten years. Medical Personnel Pool's existing operations out of Fort Myers are not Medicare-certified and do not serve Medicare patients.
3. Medical Personnel Pool has represented in its application that it will commit 2% of its total visits to Medicaid patients and one hour of uncompensated visits to indigent patients for every 20 hours of visits to Medicare patients for which it is reimbursed. The indigent commitment would be recorded and accumulated until the commitment reaches the approximately 10 to 20 visits necessary to start and finish a case for an indigent patient.
4. Medical Personnel Pool also represents that it will operate all of its home health services out of the same corporate entity out of which it operates Medicare-certified home health services. In this way, Medical Personnel Pool is committing to charge its Medicare-certified patients no more than it charges its private pay patients.
5. Petitioner, DeSoto Memorial Hospital (DeSoto Memorial), is a private, not-for-profit acute care community hospital located in HRS District VIII in Arcadia, DeSoto County, Florida. DeSoto Memorial has provided health care services to DeSoto County since 1968. It is the only acute care general hospital located in DeSoto County. It provides services to patients regardless of ability to pay and commits in its application to provide 10% of its home health services to Medicaid patients and 8% to indigent patients.
6. DeSoto Memorial has applied for a Certificate of Need to provide home health services in DeSoto County. Its proposed home health agency would be located at the existing hospital facility.
Criterion Section 381.494(6)(c)1. (The need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and state health plan adopted pursuant to Title XV of the Public Health Service Act, except in emergency circumstances which pose a threat to the public health.)
1. 1985-87 State Health Plan.
  1. The 1985-87 State Health Plan states in part: "Policy makers are increasingly concerned about providers' willingness to serve Medicaid recipients and medically indigent Floridians."
    The State Health Plan references efforts by the Medicaid program since 1981 to increase Medicaid reimbursement for home health services and to increase medically indigent access to home health services. However, the State Health Plan concludes: "Rather than attempt to establish unrealistic performance expectations for private providers, the Legislature will either have to increase resources available to reimburse those providers for home health services to the indigent or provide support to the county health units."
  2. The State Health Plan also cites as an objective: "To assure that the number of home health agencies in each service area promote the greatest extent of competition consistent with reasonable economies of scale by 1987." It recommends: "Develop a need methodology based on historic cost data for Florida home health agencies."
  3. However, the evidence in this case was that additional Medicare-certified home health agencies will not significantly contribute to price competition. To the contrary, the evidence was that additional Medicare-certified home health agencies actually will cause a relatively small increase in the cost of Medicare-certified home health services. This cost increase will be small because home health services are not capital intensive, and duplication of services and under-utilization of home health services will not require as much of a price increase to cover costs as would duplication of services and under-utilization of capital intensive hospital services.(Only 2% of a home health agency's costs are capital costs while 15 to 20% of a hospital's costs are capital costs.) In addition, the price for Medicare- certified home health services is subject to a cap which most home health services already are close to.
  4. Additional numbers of home health agencies would foster competition in the quality of services and responsiveness of services to the needs and wants of the patients in an area.
  5. Additional Medicare-certified home health agencies that serve a significant percentage of Medicaid recipients and medically-indigent patients would have a competitive advantage in getting referrals over Medicare-certified home health agencies that do not serve Medicaid recipients and the medically-indigent. To compete, existing Medicare-certified home health agencies probably would initiate comparable service for Medicaid and medically-indigent patients. This desirable effect of competition would help alleviate the policy makers' concerns referred to in Finding Of Fact 7 above. But see Conclusion Of Law 1 below.
    (ii.) District VIII Local Health Council Health Plan.
  6. The 1985 District VIII Local Health Council Health Plan adopted August 21, 1985 states: "Home health care services are generally available to all residents within District Eight." However, this conclusion drawn by the local health council is based upon an application of HRS proposed rule 10-5.11(14), Florida Administrative Code. This rule has been held invalid. See, Final Order, Home Health Services and Staffing Association, et al. v. Department of Health and Rehabilitative Services, Case No. 85-1377R, March 12, 1986. In addition, based upon the evidence in this case, the proposed rule does not accurately assess the need for the home health agencies proposed by Medical Personnel Pool and DeSoto Memorial. See Findings Of Fact 27 through 70 below.
  7. The District Health Plan also establishes sub- districts. Pertinent to this case, Charlotte County, Collier County, DeSoto County and Lee County are established as separate sub-districts. Sarasota County also is established as a separate sub-district. Glades and Hendry counties are combined as the last sub-district.
  8. The District Health Plan's sub-district designations were established on the basis that they: (1) have a geographic size which meets reasonable travel distances and travel times;
    (2) have a population size adequate to support at least one agency; (3) are geo-politically consistent; and (4) have available population, socio-economic and health statistics to document use rates and projections.
  9. The District Health Plan also recommends: "Sub- districts without a home health agency office in one or more of its principle [sic] communities should be identified as a
    priority area for the expansion or new establishment of a home health agency."
  10. In addition, the District Health Plan establishes the policy: "Continuity of patient care should be assured through the establishment of formal coordination arrangements between home health agencies, and physicians, hospitals, nursing homes, and community social service agencies and organizations."
  11. Finally, as another policy, the District Health Plan states: "Home health care should be accessible to all persons in need, regardless of ability to pay or source of payment." But see Conclusions Of Law 1 below.
Criterion Section 381.494(6)(c)2. (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.)
Analysis of Need for the Proposed Home Health Agencies.

(i) HRS proposed Rule 10-5.11(14), Florida Administrative Code.
adjusted number of visits (the so-called "additive factor").
This adjusted number of visits equaled the total projected number of Medicare visits divided by 9,000, then multiplied by what was called the "C" factor. The "C" factor varied with the calendar year in which an application was filed. For applications which were filed in 1984 and 1985, "C" was equal to 270. For applications to be filed in 1986 and 1987, "C" was equal to 225. For applications to be filed in 1988 or later, "C" was equal to
180. If the calculation of "S" resulted in a number which was larger than 21,000, then "S" was to be assigned a value equal to 21,000. This meant that the divisor "S", or the number of visits an agency was expected to provide, would range from 9,000 visits to 21,000 visits. Thus, districts would have different values for "S", and even within a district, the value of "S" would vary from year to year.
1. The fifth and last step of the formula was to calculate the net number of Medicare-certified home health agencies needed ("N"). "N" was calculated by subtracting the number of "licensed and approved" agencies currently located in a district from the gross number of agencies projected as needed in the planning horizon, "G". The number of "licensed and approved" agencies, denoted as "L" in the proposed rule, included a count of all licensed agencies located within a district and all approved agencies that are not yet licensed.
2. As of the date of the final hearing in this case, HRS was applying proposed Rule 10-5.11(14) to its review of home health agency CON applications, as though the rule were in full force and effect, with several significant modifications to the express language of the proposed rule.
3. First, as noted above, HRS had agreed that its use of the value .0496 in Factor "A" of the published proposed rule was the result of an erroneous reading of the published 1982 Health Care Financing Administration ("HCFA") home health utilization rates for over-65 persons in Florida, and that the correct 1982 value was .0506.
4. Second, HRS had abandoned the requirement of the published version of the proposed rule that decimal values of "G" always be rounded down to the next lower whole number and had modified its application of the proposed rule to conventional rounding of value "G", i.e., decimal values of .5 or greater were rounded up to the next larger whole number, and decimal values less than .5 were rounded down to the next lower whole number.
5. In applying proposed Rule 10-5.11(14) in its review of Medical Personnel Pool's CON application, HRS included in the inventory of licensed and approved agencies ("L") three (3)
  agencies located in other districts, which although licensed to serve individual counties in District VIII, were not licensed to serve any of the counties in Medical Personnel Pool's proposed service area, and which had not yet applied for nor been approved to set up new agencies or sub-units in District XI under the now defunct paragraph (e) of the former proposed rule.
6. The "additive factor" is the term which has been used to refer to everything appearing to the right of the first appearance of the figure 9,000 in the definition of the divisor, factor "S," of the methodology found in paragraph (a) of the former proposed rule.
7. As previously discussed, the purpose of the divisor in the formula of paragraph (a) of the former proposed rule was to convert the expected number of Medicare visits needed in the appropriate planning horizon to a gross number of Medicare home health agencies needed. In order to accomplish this, an agency size of some sort had to be used, defined by number of visits, for the denominator in the formula. One intent of the value in the denominator in the methodology of the former proposed rule was to represent an optimal minimum efficient economic operating size. The premise for this concept of optimal minimum efficient economic operating size was a health planning concept that below a certain minimum range of agency size in number of visits, fixed start-up costs result in a relatively high cost per visit ratio for new small agencies.
8. All of the available data indicates that there is a range of "economies of scale" in costs per visit for new start-up home health agencies, breaking somewhere between 6,000 and 9,000 or 10,000 visits. Once this breaking point is reached, the relatively small level of fixed costs in home health level off, and the data do not show any further significant points of economies of scale.
9. Specifically, a distinction must be drawn between the theoretical economies of scale argument and what the actual available reported data show to be the experience of the home health industry in Florida. Using a sample of over 85% of the home health agencies in Florida (all of the agencies cost reporting through the State's Medicare fiscal intermediary), and plotting their actual reported 1984 number of visits and cost per visit, it is clearly seen that there is no predictable relationship between actual reported agency size in visits and actual reported cost per visit. A statistical regression analysis performed on this same data for three years experience, i.e., 1982, 1983 and 1984, confirms this absolute lack of any significant relationship between reported agency size and reported agency cost per visit in Florida's existing Medicare
  home health agencies. For example, in the most recent reporting year, the largest agency in Hillsborough County also reported the highest cost per visit in Hillsborough County.
10. Further, whatever argument these may be as to economies of scale and start-up costs for a new home health agency, the undisputed evidence is that an existing, fully-staffed, fully- equipped home health agency has all of its necessary patient referral sources in place and functioning. Thus, the economies of scale argument relating to start-up costs of new home health agencies is not applicable to existing agencies.
11. Nevertheless, to accomplish the goals of translating gross number of visits projected as needed in the appropriate planning horizon to gross number of Medicare agencies needed, HRS proposed in the methodology of its former proposed rule to use a denominator of 9,000 visits, inflated by the so-called additive factor in two ways, i.e., (1) by incorporating an additive factor of total Medicare visits in the district, divided by 9,000, and (2) by then multiplying this ratio by the so-called "C" factor, which consists of three different arbitrary values, 3% of 9,000 (270), 2 1/2% of 9,000 (225), and 2% of 9,000 (180), depending on the filing year of the application being reviewed. This entire value was then added to 9,000 visits.
12. The effect of including "MV" divided by 9,000 in the additive factor was to yield a final value for this factor, with or without the "C" multiplier, which varied in size from one HRS Local Health Planning District to any other. This occurred because "MV" would differ from district to district, driven as it was by district population in the given planning horizon. For the same reason, this ratio within the additive factor would also vary from year to year. Absolutely no rationale or purpose has been offered for thus varying the "target agency size" from district to district and year to year. This result of including MV/9,000 in the additive factor is, therefore, totally arbitrary in its own right.
13. As previously noted, the "additive factor" contained its own internal additive factor; a multiplier referred to as "C". The arbitrary values which were substituted for "C" are set forth above.
14. In its first value, "C" caused the methodology of the proposed rule to yield a statewide average district net need under the formula as proposed of only two (2) new agencies, the closest whole value possible to the existing number of Medicare home health agencies as of the date of the proposed rule's publication.
15. The only evidence tending to explain the derivation of "C" is testimony that HRS files contained several computer "runs," each with a different value and showing different net need results, and that the value chosen by HRS for the first two years (270) yielded the overall statewide average district net need which closest approximated the status quo.
16. No evidence was introduced to show how either the values attributed to "C" or the existence of "C" itself were empirically justified or served a valid health planning purpose.
17. Proposed Rule 10-5.11(14) provided for annual updating of the projected population data to be used therein, but froze as "standards" the 1982 Medicare Florida home health agency utilization rates which appeared in factors "A," "B," and "C".
18. More recent use rates, i.e., 1983 values for each of these use rates, are, and have been, readily available. This data, published by HCFA, is released at least annually, and is readily available to anyone requesting it, with a minimum of effort.
19. It is unreasonable not to update these utilization rates to the most recent available data.
20. In addition, there are several specific health planning reasons why refusal to consider the readily available updated 1983 use rates would be unreasonable in this case. First, since at least 1978, when such records became available, HCFA data has shown a steady and consistent trend of increases in all three of these utilization rates, both in Florida and in the nation as a whole.
21. There are several reasons explaining this trend: there have been ever-increasing pressures in the health care delivery system to "deinstitutionalize" patient services, with an emphasis on outpatient and home health services a major part of the reason for this emphasis is budgetary restraints home health services are far less expensive than comparable inpatient services; there has been an increase in the need for home health services for younger populations for things such as post-surgical care; there have been innovative technological developments in home health care, including the so-called hi-tech services which in the recent past, if available at all, were only available in inpatient settings; there has been a demonstrated increased awareness of home health services and their advantages, both in the physician community and among the public at large; and there have also been significant changes and expansions in Medicare reimbursement of home health services which have encouraged increased utilization.
22. The 1982 Medicare utilization reporting period pre- dated the October, 1983, implementation of the Medicare prospective payment system for hospitals, which has been identified as a specific cause of increased home utilization. Furthermore, most of the previously discussed innovative hi-tech home health services were not in use in home health in 1982, and that reporting year's data ignores their effect on home health utilization.
23. The proposed rule, in paragraph (e), provided that home health agencies shall be restricted to providing services within a single departmental district. The proposed rule further provided that any multi-district or cross-over agency should be included in the inventory of the home health agencies in the district into which it crosses over. As reflected in Findings Of Fact 19 and 20 above, multi-district or cross-over agencies should logically be taken into account in determining the adequacy of existing home health agencies to serve the needs of a particular district. Multi-district or cross-over agencies are licensed to operate in some of District VIII and must be presumed to be operating in parts of the district absent a showing that they are not. In this case, the evidence was that one of the three multi-district or cross-over agencies Visiting Nurses Association of Hardee County is not operating in District VIII, but there was no similar evidence as to the other two multi- district or cross-over agencies. Those two should be counted in District VIII's inventory of home health agencies.
24. HRS did not prove by the evidence in this case that proposed Rule 10-5.11(14), if proposed as non-rule policy, is reasonable.
  
  (ii.) Quantification of Need.
25. As mentioned, the utilization method of quantifying need for Medicare-certified home health agencies is a reasonable approach.
26. As also mentioned, it is most reasonable and accurate to use the most recent available utilization data for 1983 in quantifying need for Medicare-certified home health agencies. According to the 1983 data: (1) 5.78% of elderly Medicare enrollees receive home health services; (2) 0.058% of the population under 65 receive Medicare home health services and (3) recipients average 33.3 home health visits each.
27. The next element of quantifying need is determining the planning horizon on which the need is to be projected. The evidence in this case was persuasive that it is reasonable to
  project need two years into the future from the date of the final hearing. The date of the final hearing itself would roughly coincide with a planning horizon two years from the date the applications were deemed complete. This would leave no lead time for start-up. While the evidence was that start-up time is relatively minimal in home health, it cannot be assumed that start-up would begin at or near the time of the final hearing.
  The Recommended Order has just now been entered, and an additional period of time can be expected to elapse before final agency action. Finally, placing the planning horizon two years from the date of the final hearing is consistent with past agency policy before the decision in Gulf Court Nursing Center v.
  Department of Health and Rehabilitative Services, 10 FLW 1983 (Fla. 1st DCA, August 20, 1985); clarified on rehearing, 11 FLW 437 (February 14, 1986).
28. Using the 1983 utilization data, the gross number of visits projected for 1988 can be obtained by multiplying the projected district population of persons 65 years of age or older times the 5.78% utilization rate and adding that number to the product of the projected district population of persons aged O to
  1. times 0.058%, the percentage of persons 0 to 64 estimated to be using Medicare home health services. Using this method, the total number of visits projected in District VIII for 1988 is 449,483.
29. Having determined the estimated number of total visits, this number must then be translated into number of home health agencies by dividing the total by a number of visits per home health agency. Because of economies of scale, this number must be at least in the range between 6,000 and 10,000 visits per agency.
30. The evidence is that, beyond the minimum size for a home health agency, there is no causal and predictable relationship between number of visits per agency and the cost; efficiency of a home health agency. Some of the evidence has suggested that total number of visits in a district should therefore be divided by the minimum agency size. But this would change the analysis from the analysis of the need for an additional home health agency to an analysis whether the market could bear an additional home health agency. Whether certificate of need regulation in the area of home health makes sense on the evidence of this case, the rationality of the law in effect must be presumed. Under the law in effect, the analysis must measure the need for an additional home health agency, not the ability of the market to absorb an additional home health agency. See Conclusion Of Law 3 below.
31. Throughout the state, the number of Medicare visits per home health agency varies broadly from the minimum size agency to almost 80,000 visits per year. In District VIII, Redi-care operated in 1984 at 34,641 visits, while another agency in the district operated at only approximately a tenth of those visits. The District VIII average in 1984 was 19,206 per year.
32. Since there are no apparent economies of scale above six to ten thousand visits per year, there is no general optimum size for a home health agency. The volume at which a home health agency can efficiently operate is instead a function of demographics. The size of a home health agency will vary in relationship to the size and composition of the population within reach of the agency and the number of other agencies actively competing for the same market. For this reason, the most appropriate available number to use as the visits per agency per year for planning purposes is the number of visits per year agencies are now making. The only evidence of this nature in the record is the average size of home health agencies in District VIII in 198419,206 visits per year or, approximately, 19,000 visits per year.
33. 449,483 visits divided by 19,000 visits per year results in 23.7 or, rounding, 24 Medicare-certified home health agencies needed in District VIII.
34. As previously discussed, there are for planning purposes 22 licensed and approved Medicare-certified home health agencies in District VIII, resulting in a net need in District VIII in 1988 for 24 minus 22, or 2 Medicare-certified home health agencies.
35. However, the evidence in this case is that Medicare- certified home health agencies are limited by federal regulations and practical considerations to a range of approximately 50 miles and by HRS to the counties of their licensure. (HRS proposed Rule 10-5.11(14), Florida Administrative Code, would have expanded licensees' authority to operate throughout the district, but it has been held invalid and is not in effect.) Therefore, it is not rational for planning purposes to end a home health need analysis at the district level. If, for example, the two agencies needed in District VIII are needed in the southern part of the district, it would serve no health planning purpose to authorize two additional agencies in the northern part of the district. There are two ways of analyzing home health need on a sub-district basis: First, using the utilization method, and secondly, allocating district-wide need by percentage of the elderly population in each sub-district.
36. Under the utilization method, Lee County is projected to require 147,686 Medicare home health visits in 1988. Dividing the total visits by the district average-sized agency (their being no evidence of the average size per agency on a county basis), Lee County would need 7.8 or, rounding, 8 Medicare- certified home health agencies. Since Lee County only has five existing or approved Medicare-certified home health agencies at this time, it has a net need of three agencies.
37. On the other hand, using the same analysis, the Charlotte, Collier and DeSoto Counties have no need projected for 1988. For Charlotte County: 64,735 visits divided by 19,000 per agency per year equals 3.4 or, roughly, three Medicare-certified agencies needed in 1988. Charlotte County now has four Medicare- certified home health agencies with home offices in Charlotte County, and three others are licensed to operate in Charlotte County. Collier County is projected to have 57,909 visits divided by 19,000 visits per agency per year equals a need for three agencies projected for 1988. Collier now has three agencies based in Collier County and three others licensed to operate there. In DeSoto County, only 7,659 visits are projected for 1988. This is less than the average-sized agency in District VIII, but it is assumed that there is a need for one home health agency in DeSoto County in 1988. There is one based in DeSoto County now, and another is authorized to operate there.
38. Multiplying the total district-wide need of 22
  Medicare-certified home health agencies projected for 1988 by the pertinent county's percentage of the elderly population of District VIII results in the following allocation:
  
  Lee County
  32.785%
  x
  22
  =
  7.2
  Collier County
  12.77%
  x
  22
  =
  2.8
  Charlotte County
  14.54%
  x
  22
  =
  3.2
  DeSoto County
  1.67%
  x
  22
  =
  .4
39. As a result of this sub-district analysis, it becomes apparent that there is a need for at least two additional Medicare-certified home health agencies in Lee County, but there is no quantifiable need elsewhere in District VIII projected for 1988.
  
  (iii.) Other Need Considerations.
40. Since 1978, utilization of home health services in Florida has consistently increased in all categories for which utilization rates are kept the number of persons over the age of
  1. using home health services, the number and percent of disabled persons under the age of 65 using home health services, and the
  average number of visits provided per patient per spell of illness.
41. In recent years, there also have been significant innovations and reimbursement changes in health care, both in home health and elsewhere in the health care industry, which have significantly increased the utilization of home health services.
42. In October, 1983, hospitals came under the new Medicare prospective payment system whereby they no longer are reimbursed for services to Medicare patients on a reported cost basis, but rather are reimbursed on a fixed-fee-for-service basis, known as Diagnostic Related Groupings, or "DRGs". Hospitals are now reimbursed a fixed amount for each defined DRG service or procedure, regardless of the costs incurred by the hospitals in delivering that service. The effect of this new reimbursement methodology has been to encourage hospitals to find ways to deliver services at lower costs, and thus maximize reimbursement. One obvious way to accomplish this is to shorten the length of the patient's stay in the hospital. Another is to defer several services, previously performed in an inpatient setting, to home health providers for provision in the patient's home, or on an outpatient basis with subsequent follow-up care in the patient's home. In either event, the experience of the industry has been that since the implementation of DRGs, many patients are being discharged by hospitals sooner, in a sicker or more acute condition, and in greater need of home health services.
43. At the same time, the industry has experienced the recent development of several so-called hi-tech home health services more advanced treatment and care procedures now being widely provided in the home, which a very short time ago were only provided in inpatient settings. These services include such procedures as chemotherapy, hyper-alimentation, and various other forms of indirect tube feeding. In addition, the industry has seen the development of new modernized equipment which has enabled many of these and other advanced procedures to be provided more inexpensively in the home.
44. Complicating matters further, Florida's nursing homes have, for some time now, been operating at very full levels. Often the physician is left with only two choices - very expensive hospitalization or home health care.
45. Some of these other need considerations already have been taken into account in the quantification of need just analyzed. The analysis does not, however, take into account continued increases in utilization after 1983 which, while not exactly speculative, are not certain and are not quantifiable.
46. DeSoto Memorial's proposal for a hospital-based home health agency affords some advantages in enabling DeSoto Memorial to utilize currently under-utilized hospital facilities and services. It also increases the likelihood that patients will benefit from better continuity of care. However, the evidence did not prove or disprove the extent of continuity of care which can now be achieved without the DeSoto Memorial proposal as a result of efforts to coordinate care of patients among the hospital, the existing home health agencies and the physicians. In other words, while continuity of care using existing home health providers may take more effort, there is no evidence that it cannot be provided.
Criterion Section 381.494(6)(c)3. (The ability of the applicant to provide quality of care.)
1. The parties have stipulated to the ability of both Medical Personnel Pool and DeSoto Memorial to provide quality care.
2. Both applicants have the ability to provide socalled "hi-tech" home health services such as chemotherapy and indirect tube feeding.
3. As previously mentioned, the DeSoto Memorial proposal will facilitate continuity of care.
Criterion Section 381.494(6)(c)8. (The availability of resources, including health manpower, management of personnel, and funds for capital and operating expenditures, for project accomplishment and operation; the effects the project will have on clinical needs of health professional training programs in the service district the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in a limited number of facilities the availability of alternative uses of such resources for the provision of other health services and the extent to which the proposed services will be accessible to all residents of the service district.)
1. Both Medical Personnel Pool and DeSoto Memorial have available the resources, including health manpower, management personnel, and funds for capital and operating expenditures necessary to accomplish and operate the project.
2. There was no evidence of the effects of either project on clinical needs of health professional training programs.
3. There was no evidence that the services proposed by either Medical Personnel Pool or DeSoto Memorial will be
  available to schools for health professions in the service district for training purposes, or that such services are available in a limited number of facilities.
4. As proposed home health agencies, both the Medical Personnel Pool and the DeSoto Memorial applications will use resources largely only to extent necessary. Capital investment is relatively minimal, and nurses and other personnel providing home health services to patients can be hired on an hourly basis as needed. To the extent not needed, those resources would be available for the provision of other health services that might be needed. The DeSoto Memorial proposal for a hospital-based home health agency would be particularly capable of using such resources for alternative uses.
5. The Medicare-certified home health services proposed by both Medical Personnel Pool and DeSoto Memorial will be accessible to all residents of the service district within approximately 50 miles of the proposed agencies. As previously mentioned, there is a geographic limit to the economic delivery of home health services from any one agency. However, except for Lee County, all residents of District VIII will have access to Medicare-certified home health services without either of the proposals.
6. There is a demonstrated lack of access to Medicaid reimbursable home health services and to home health services for the indigent. However, those services are not the subject of this proceeding. See Conclusions Of Law 1.
Criterion Section 381.494(6)(c)9. (The immediate and long- term financial feasibility of the proposal.)
1. The parties have stipulated to the immediate and long- term financial feasibility of both the Medical Personnel Pool and the DeSoto Memorial proposal.
Criterion Section 381.494(6)(c)12. (The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services, which foster competition and service to promote quality assurance and cost-effectiveness.)

As previously mentioned, additional competition in Medicare-certified home health services probably would tend to improve the quality of the services provided, give providers
incentive to meet the needs and desires of the patients in the service area and foster innovations in the home health area.
As to price competition, there was no evidence that competition in Medicare-certified home health services will have any positive effect on the cost of home health services in the service district. Actually, the evidence was that additional home health agencies would be likely to increase slightly the charges for home health services. These increases would be subject to the Medicare cap which most agencies' charges already are approaching.
I. Balanced Consideration of the Criteria.
Balancing all the criteria that have been considered as applicable in light of the parties' stipulations, it is found that there is need and sufficient justification to grant the Medical Personnel Pool application, but only as to Lee County. There is no need for or sufficient justification to authorize Medical Personnel Pool to operate in Charlotte or Collier Counties or to grant the DeSoto Memorial application. (If need for Medicare-certified home health agencies could be based upon the needs of Medicaid and indigent patients, the evidence would support the need for both proposals as applied for.)
CONCLUSIONS OF LAW
The determination of need for additional Medicare- certified home health agencies is governed by Sections 381.493, et seq., and Chapter 400, Part III, Florida Statutes, both amended by Chapter 85-167, Laws of Florida (1985). Under these provisions, only Medicare-certified home health agencies, or agencies seeking Medicare-certification, are subject to state certificate of need regulations. The statutes reflect no legislative intent to determine the need for Medicare-certified home health services other than on the basis of whether there is a need for additional home health services to meet the needs of Medicare patients. Under the relevant statutes, the needs of Medicaid or indigent patients are irrelevant to the determination of the threshold question whether there is a need for additional Medicare-certified home health agencies. Likewise, any beneficial effect of additional Medicare-certified home health agencies on the delivery of home health services to Medicaid and indigent patients also is irrelevant to the determination of the threshold question of need for additional Medicare-certified home health agencies. Regardless how laudable or wise the result might be, the current law governing certificate of need for Medicare-certified home health agencies is not susceptible to be used as a means for HRS to coerce existing licensees to serve Medicaid or indigent patients by threatening to certify unneeded
Medicare agencies that will. See Recommended Order, Santa Fe Health Care Systems, Inc., v. Department of Health and Rehabilitative Services, et al., DOAH Case No. 85-1501, entered January 23, 1986.
The decision in Farmworker Rights Organization v. Department of Health and Rehabilitative Services, 430 So.2d 1, (Fla. 1st DCA 1983), does not undermine the foregoing interpretation of the statutes governing certification of Medicare home health agencies. The Farmworker decision dealt with an administrative rule which was inconsistent with a federal statute. It does not address the situation where state statutes arguably conflict with a federal statute. Cf. Section 381.494(8)(a), Florida Statutes (1985). In such circumstances, it seems clear that the Florida statutes establishing the Florida Certificate of Need program must control over a federal certificate of need statute.
Similarly, inherent in the concept of certificate of need regulation is that the inquiry is into the need for additional home health agencies, not the ability of the market to absorb additional home health agencies. The applicants' evidence and argument is that a minimum-sized home health agency should be assumed in determining the need for additional Medicare certified home health agencies. But such an approach would stand certificate of need regulation on its head, measuring the room in the market for one more entry instead of the need in the market for one more entry. Without stating it outright, the applicants real argument is with the need for certificate of need regulation itself in this area. Regardless of the merits of the applicants' position, the Legislature has spoken and, until changed, its words are final.
The next legal question to be resolved before proceeding with an analysis of the need for the Medicare- certified home health agencies proposed by Medical Personnel Pool and DeSoto Memorial on the evidence in this case is the question how far into the future need should be projected. As reflected in the Findings Of Fact, it would be appropriate for health planning purposes to determine the need for the proposals upon the need for home health services projected two years into the future from the date of the final hearing. The evidence also is that HRS has in the past followed a non-rule policy of projecting need for home health services two years into the future from the date of the final formal administrative proceeding, if any. However, that was before the decision in the Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 10 FLW 1983 (Fla. 1st DCA August 20, 1985), clarified on rehearing, 11 FLW 437 (February 14, 1986).
The Gulf Court decision held that, on the facts of that case, HRS should not have settled with a prior batched applicant for nursing home beds by awarding to the applicant beds which were not "identified" by the district and state health plans at the time the prior batched application was complete since the prior batched applicant had not properly updated or re-submitted its application for comparative review with later batched applicants. While the Gulf Court decision spoke primarily in terms of the "fixed pool of beds" identified in the district and state health plans, it as easily could have referred to the health planning horizons which operated to "fix" those pools of beds. Under the facts of Gulf Court, the planning horizon for purposes of determining projected bed need was "fixed" when the application was deemed complete. An applicant in circumstances fitting the factual circumstances of Gulf Court could only extend the planning horizon by updating or re-submitting its application in accordance with Rule 10-5.14, Florida Administrative Code.
For several reasons, it is concluded that the Gulf Court decision should not apply in this case. First, there was no evidence in this case that there was ever a district or state health plan "identifying" projected need for home health services. Second, on the evidence of this case, there never has been an HRS rule methodology for determining projected need for home health services. For those two reasons, there was no evidence that there ever has been any "fixed pool" of need for home health services. Absent a "fixed pool," the applications of Medical Personnel Pool and DeSoto Memorial never were tied to or restricted to need projected on a particular planning horizon. Third, and lastly, unlike the situation in Gulf Court, there is no later batched applicant complaining in this case that the pending applications must be determined upon need projected for an earlier planning horizon or that its application should be compared with the applications of Medical Personnel Pool and DeSoto Memorial. This is one of the bases on which the Gulf Court panel on rehearing distinguished Gulf Court from the decision in Community Psychiatric Centers, Inc., v. Department of Health and Rehabilitative Services, 474 So. 2d 870 (Fla. 1st DCA 1985).
These three points of distinction between this case and the Gulf Court case must be considered in light of the clarification on rehearing in Gulf Court:

Our decision is based on the federal and· state statutes and rules in existence at the time the HRS order was entered. The decision concludes that such statutory language gave Gulf Court the right to a comparative hearing under the circumstances shown in this case.
The opinion should be read in this light, and the legal consequences of the decision should not be extended beyond the issues actually decided.

Substantial changes have been made to the cited Florida statutes and rules since 1982. These changes have altered the methodology for determining bed need and may well affect the manner for determining what, if any, fixed pool of beds is involved in a particular application. We have not received briefs on any issues concerning the effect of these subsequent statutory changes on the rights of the parties to this case and express no opinion thereon. The applicability of the changed statutes, and how the rationale of this decision must be applied in light of these statutory changes, are open questions.

11 FLW at 438. Although the Gulf Court decision is not clear whether it should apply to this case to fix the planning horizon at two years after the pending applications were deemed complete1, it is concluded that the Gulf Court decision does not lead to such a result. To the contrary, the need for the Medical Personnel Pool and DeSoto Memorial proposals should be determined based on the need projected on a two year planning horizon from the date of the final hearing or, most nearly, 1988.
The recent decision in Balsam, et al., v. Department of Health and Rehabilitative Services, et al., 11 FLW 876, 878 (Fla. 1st DCA March 31, 1986), confirms the requirement in certificate of need cases for "a balanced consideration of all the statutory criteria." See also, Department of Health and Rehabilitative Services v. Johnson and Johnson, 447 So. 2d 361, 363 (Fla. 1st DCA 1984); Humana, Inc. et al. v. Department of DCA 1985). The appropriate weight afforded to each criterion is not fixed, but varies on a case-by-case basis. Cf. Collier Medical Center, Inc. v. Department of Health and Rehabilitative Services, 461 So 2d 83, 84 (Fla. 1st DCA 1985). As reflected in the Findings Of Fact, all of the criteria stipulated by the parties to be applicable under Section 381.494(6)(c) have been considered and weighed. As a result of this balanced consideration of the applicable criteria, it was found and must be concluded that the evidence justifies granting the Medical Personnel Pool application in this case as to Lee County only on the conditions

(1) that Medical Personnel Pool honor its commitment to provide

2% of its total visits to Medicaid patients and one hour of

uncompensated visits to indigent patients for every 20 hours of visits to Medicare patients for which it is reimbursed and (2) that it will operate all of its home health services out of the same corporate entity out of which it operates Medicare-certified home health services. Otherwise, the pending applications are not justified under a balanced consideration of the criteria.

RECOMMENDATION

Based on the foregoing Findings Of Fact and Conclusions of Law, it is recommended that Respondent, Department of Health and Rehabilitative Services, enter a final order: (a) granting the application of Petitioner, Personnel Pool of Southwest Florida, Inc., for a certificate of need for Medicare home health services but only for Lee County and only on the conditions (1) that Personnel Pool provide 2% of its total visits to Medicaid patients and one hour of uncompensated visits to indigent patients for every 20 hours of visits to Medicare patients for which it is reimbursed and (2) that it will operate all of its home health services out of the same corporate entity out of which it operates Medicare-certified home health services: (b) denying the Personnel Pool application as to Collier and Charlotte counties; and (c) denying the application of Petitioner, DeSoto Memorial Hospital.

RECOMMENDED this 7th day of May, 1986 in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1986.

ENDNOTE

1/ It should be noted that the continued viability of the Gulf Court decision beyond the peculiar stipulated facts of that case is called into question by the recent decision in Balsam, infra, also written by Judge Zehmer. Unless Gulf Court is confined to its peculiar stipulated facts, it would seem to be in conflict

with the Balsam decision. Balsam does not explain or even seem to recognize the conflict.

COPIES FURNISHED:

Susan L. Stockham-Mosca, Esquire 2032 Hillview Street

Sarasota, Florida 33579

Thomas D. Watry, Esquire 1200 Carnegie Building

133 Carnegie Way Atlanta, Georgia 30303

Martha J. Edenfield, Esquire OERTEL & HOFFMAN, P.A.

2700 Blair Stone Road, Suite C Tallahassee, Florida 32301

Harden King,

Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

William Page, Jr., Secretary Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32301

APPENDIX

Rulings on Medical Personnel Pool's Proposed Findings of Fact:
1. The substance of the following proposed findings of fact are accepted as substantially, factually accurate and are incorporated in the Findings Of Fact in the same or similar format to the extent necessary: 8, 10, 14, 21, 22, 28-30, 33-39, 48-63, 66-76.
2. The following proposed findings of fact would have been incorporated in paragraph 1 above except that they are unnecessary: 1-7, 11, 12, 15, 16, 20, 25, 27, 31, 32, 64, 65, 77-79, 88.
3. The following proposed findings of fact would have been included in paragraph 1 above except that they are subordinate and unnecessary: 23, 24, 40, 46, 47, 57, 83-86, 89, 91, 92.
4. The following proposed findings of fact would have been included in paragraph 1 above except that they are irrelevant: 17, 18, 26, 41, 42, 44, 80-82.
5. Proposed finding of fact 9 would have been included in paragraph 1 above except that everything after the first sentence is unnecessary.
6. Proposed finding of feet 13 would have been included in paragraph 1 above except that everything before the reference to the new "hi-tech" is unnecessary.
7. Proposed finding of fact 43 would have been included in paragraph 1 above except that the second clause of the second sentence is rejected as contrary to the greater weight of the evidence and/or Findings Of Fact.
8. Proposed finding of fact 45 is accepted with respect to Lee County, but rejected as to the other counties as contrary to the greater weight of the evidence and/or Findings Of Fact.
9. Proposed finding of fact 62 would have been included in paragraph 1 above except that the last sentence is rejected as contrary to the greater weight of the evidence and/or Findings Of Fact, and everything before that is irrelevant.
10. Proposed finding of fact 87 is rejected in part as subordinate and unnecessary, in part as argument and in part as contrary to the greater weight of the evidence and/or Findings Of Fact.
11. Proposed finding of fact 90 would have been included in paragraph 1 above except that it is rejected that the methodology is "still overly-conservative" as contrary to the greater weight of the evidence and/or Findings Of Fact.
12. Proposed finding of fact 93 would have been included in paragraph 1 above except that it is rejected that the approach indicates sufficient need to require approval of the Medical Personnel Pool application in its entirety as contrary to the greater weight of the evidence and/or Findings Of Fact.
13. Proposed finding of fact 94 would have been included in paragraph 1 above except that it is rejected that the approach indicates sufficient need to require approval of the Medical
  Personnel Pool application in its entirety as contrary to the greater weight of the evidence and/or Findings Of Fact.
14. Proposed finding of fact 95 is rejected as contrary to the greater weight of the evidence and/or Findings of Fact.
Rulings On DeSoto Memorial's Proposed Findings of Fact:

The substance of the following proposed findings of fact are accepted as substantially factually accurate and are incorporated in the Findings Of Fact in the same or similar format to the extent necessary: 1, 2, 4, 5, 13, 23-25, 28-30, 39, 40, 42, 43, 52, 55, 56, 67 and 94.
The following proposed findings of fact would have been included in paragraph 1 above except that they are subordinate and unnecessary: 3, 6-8, 35, 45-50, 54, 58, 75, 77, 78, 85 and 91.
The following proposed findings of fact would have been included in paragraph 1 above except that they are unnecessary: 9-11, 14, 22, 26, 74.
The following proposed findings of fact would have been included in paragraph 1 above except that they are irrelevant: 20, 31-34, 36-38, 59, 71, 72 and 89.
Proposed finding of fact 16 would have been included in paragraph 1 above except that the word "incredibly" is rejected as contrary to the greater weight of the evidence and/or Findings Of Fact.
Proposed finding of fact 17 would have been included in paragraph 1 above except that the last sentence is rejected as contrary to the greater weight of the evidence and/or Findings Of Fact.
Proposed finding of fact 21 would have been included in paragraph 1 above except that the last sentence and the reference to "improvements" in the first sentence are rejected as contrary to the greater weight of the evidence and/or Findings of Fact.
Proposed finding of fact 44 would have included in paragraph
1 above except that it is in part subordinate and unnecessary.
Proposed finding of fact 73 would have been included in paragraph 1 above except that the second sentence is cumulative and the first sentence is irrelevant.
Proposed finding of fact 86 would have been included in paragraph 1 above except that the second clause is rejected as contrary to the greater weight of the evidence and/or Findings of Fact.
The following proposed findings of fact are rejected as cumulative: 18, 62-66, 68, 69, 76, 79-82, 84, 87, 88, 90 and 93.
The following proposed findings of fact are rejected as being conclusions of law: 51 and 92.
Proposed finding of fact 12 is rejected because the first sentence is contrary to the greater weight of the evidence and/or Findings Of Fact and the second sentence is irrelevant.
Proposed finding of fact 15 is rejected as contrary to the greater weight of the evidence and/or Findings of Fact.
Proposed findings of fact 19 , 41, 53, 57, 60 and 83 are rejected as contrary to the greater weight of the evidence and/or Findings Of Fact.
Proposed finding of fact 27 is rejected.
Proposed finding of fact 61 is rejected because the first sentence is contrary to the greater weight of the evidence and/or Findings Of Fact and the rest is cumulative.
Proposed finding of fact 70 is rejected because the first sentence is irrelevant and the rest is a hypothetical not based on any facts proved at final hearing.

Rulings On HRS' Proposed Findings of Fact. None submitted.
================================================================= AGENCY FINAL ORDER
=================================================================

STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES

ENGLEWOOD HOME HEALTH CARE INC.,

Petitioner,
CASE NO. 85-1751
vs. CON NO. 3618

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.
/ PERSONNEL POOL OF SOUTHWEST FLORIDA, INC.,

Petitioner,
CASE NO. 85-2072
vs. CON NO. 3617

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.
/ DESOTO MEMORIAL HOSPITAL,

Petitioner,
CASE NO. 85-2109
vs. CON NO. 3616

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.
/
PERSONNEL POOL OF SOUTHWEST FLORIDA, INC.,

Petitioner,
CASE NO. 85-1407
vs. CON NO. 3478

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,

Respondent.
/

FINAL ORDER

This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the abovestyled case submitted a Recommended order to the Department of Health and Rehabilitative Services (HRS). A copy of that Recommended Order is attached hereto.

RULING ON EXCEPTIONS BY MEDICAL PERSONNEL POOL (MPP)
1. No ruling is required on exception number one (1) because of HRS conclusion that MPP's CON should be granted on the basis of its commitment to serve medicaid recipients and other indigent persons.
2. Exception number two (2) is granted on the basis of St. Johns Home Health Agency vs. HRS et al., Case No. BN-227, op. filed June 23, 1987 (Fla. 1st DCA) and 42 CFR Ch. IV, Section 440.70(d).

RULING ON EXCEPTIONS BY DESOTO MEMORIAL HOSPITAL (DMH)

No ruling is required on exception number one (1) for the reason given in ruling on MPP exception number one (1).
Exception number two (2) through eight (8) are denied for the reason given in ruling on MPP exception number one (1). ·
Exception number nine (9) is granted for the reasons given in ruling on MPP exception number two (2).
Exception number ten (10) is granted for reason given in ruling of MPP exception number two (2).
Exception number eleven (11) is granted for the reason given in ruling on MPP exception number two (2).
Exception number twelve (12) is granted for reason given in ruling on MPP exception number two (2).
Exception number thirteen (13) is granted.
Desoto's supplemental exceptions are granted for the reason given in ruling on MPP exception number two (2).

FINDINGS OF FACT

The department adopts and incorporates by reference the findings of fact set forth in the Recommended Order except for the Hearing Officer's interpretation of Gulf Court Nursing Center vs. HRS et al, 483 So. 2d 700 (Fla. 1st DCA 1986) and the need methodology used by the Hearing Officer.

CONCLUSIONS OF LAW

The determination of need for home health agencies is governed by Section 381.493, et seq., and Chapter 400, Part III, Florida Statutes. Under these provisions, agencies seeking Medicare-certification, must obtain certificate of need approval.
Consideration of the need for service to medicaid patients and other indigent patients is a criteria appropriately applied in review of CON applications for medicare certified home health agencies. St. Johns Home Health Agency vs. HRS et al., Case No. BN-227, op. filed June 23, 1987 (Fla. 1st DCA) and 42 CFR Ch. IV, Section 440.70(d).
In view of the MPP's and Desoto's commitment to serve medicaid and indigent patients (findings of fact number three (3) and five (5)), the finding that service to these patients would motivate other agencies to expand their service to these patients (finding of fact number eleven (11)), and the finding that additional service to these patients is needed in the areas MPP and Desoto propose to serve; the CON applications conditioned by the commitments in findings of fact number three (3) and five (5) should be approved.

Based upon the foregoing findings of fact and conclusions of law and a balanced weighing of all applicable statutory criteria it is adjudged that Desoto's application for CON number 3616 to serve Desoto County be approved conditioned on its commitment to serve medicaid and indigent patients as set forth in finding of fact number five (5). It is further adjudged that, Medical Personnel Pool's application for CON number 3478 to serve Lee,

Collier, and Charlotte Counties be approved conditioned on its commitment to serve medicaid and indigent patients as set forth in finding of fact number three (3). Finally, it is adjudged that CON applications number 3617 and 3618 be denied.

DONE and ORDERED this 23rd day of July, 1987, in Tallahassee, Florida.

Gregory L. Coler Secretary

Department of Health and Rehabilitative Services

by V. Sheffield Kerry

Assistant Secretary for Programs

A PARTY WHO IS-ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED

Copies furnished to:

J. Lawrence Johnston Hearing Officer

DOAH, The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

Susan L. Stockham-Mosca, Esquire 2032 Hillview Street

Sarasota, Florida 33579

John Rodriguez, Esquire Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Blvd.

Building One, Room 407 Tallahassee, Florida 32399-0700

Thomas D. Watry, Esquire 1200 Carnegie Building

133 Carenegie Way Atlanta, GA 30303

Martha J. Edenfield, Esquire OERTEL & HOFFMAN, P.A.

P. O. Box 6507

Tallahassee, Florida 32314-6507

FALR

Post Office Box 385 Gainesville, Florida 32602

Nell Mitchem(PDDR)

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 24th day of July, 1987.

R. S. Power, Agency Clerk Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700 904/488-2381

Docket for Case No: 85-001751

Issue Date	Proceedings
May 07, 1986	Recommended Order (hearing held , 2013). CASE CLOSED.

Orders for Case No: 85-001751

Issue Date	Document	Summary
Jul. 24, 1987	Agency Final Order
May 07, 1986	Recommended Order	Rule need for new home health agency only in one county. Application would serve under served Medicaid patients irrelevant to Medicare certified home need.

Source: Florida - Division of Administrative Hearings

ENGLEWOOD HOME HEALTH CARE, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 85-001751 (1985)

Docket for Case No: 85-001751

Orders for Case No: 85-001751

Harden King, Jr.

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Lee County	32.785%	x	22	=	7.2
Collier County	12.77%	x	22	=	2.8
Charlotte County	14.54%	x	22	=	3.2
DeSoto County	1.67%	x	22	=	.4

ENGLEWOOD HOME HEALTH CARE, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 85-001751 (1985)

Docket for Case No: 85-001751

Orders for Case No: 85-001751

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