STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
HILLHAVEN, INC. d/b/a MENORAH ) HOUSE-HILLHAVEN, )
)
Petitioner, )
)
vs. ) Case No. 85-2634
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) NORTH RIVIERA BEACH )
CONVALESCENT CENTER, INC., )
)
Petitioner, )
)
vs. ) Case No. 85-3320
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
)
and )
) HILLHAVEN, INC., d/b/a MENORAH ) HOUSE-HILLHAVEN, )
)
Intervenor. )
) MANOR CARE OF BOYNTON BEACH, )
)
Petitioner, )
)
vs. )
) Case No. 86-0903
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent, )
)
and )
) HILLHAVEN, INC. d/b/a MENORAH ) HOUSE-HILLHAVEN, )
)
Intervenor. )
)
RECOMMENDED ORDER
These consolidated cases were heard on April 29 through May 7; 1986, by R. L. Caleen, Jr., Hearing Officer with the Division of Administrative Hearings, in West Palm Beach, Florida. The parties were represented by counsel.
APPEARANCES
Hillhaven, Inc. C. Gary Williams, Esquire d/b/a Menorah House- Michael J. Glazer, Esquire Hillhaven Post Office Box 391
Tallahassee, Florida 32302
Manor Care of James Hauser, Esquire
Boynton Beach Post Office Box 1876 Tallahassee, Florida 32302
North Riviera Beach Keith A. Seldin, Esquire Convalescent Center 1340 U.S. Highway I, Suite 106
Jupiter, Florida 33469
Department of Health Harden King, Esquire and Rehabilitative 1323 Winewood Boulevard
Services Tallahassee, Florida 32301 ISSUE
Whether certificate of need (CON) applications for nursing home beds filed by Hillhaven, Inc. d/b/a Menorah House-Hillhaven, North Riviera Beach Convalescent Center, Inc., and Manor Care of Boynton Beach, should be approved, or denied (as proposed by the Department of Health and Rehabilitative Services).
INTRODUCTION
These consolidated cases involve three CON applications for nursing home beds in southern Palm Beach County. The first application; filed by Hillhaven, Inc. d/b/a Menorah House-Hill- haven ("Menorah House"), proposes a CON to establish a 120-bed Jewish nursing home adjacent to a soon-to-be-built South County Jewish Federation campus in western Boca Raton. The second application, filed by Manor Care of Boynton Beach ("Manor Care"), proposes a 60-bed addition to its existing 120 bed nursing home in Boynton Beach. While this existing facility has no special
programs for Jewish residents, Manor Care proposes the addition as a separate wing to serve Jewish residents. The third application, filed by North Riviera Beach Convalescent Center, Inc. ("Riviera Beach"), proposes a 120-bed nursing facility in Riviera Beach, to primarily serve elderly black residents in that area. Respondent, Department of Health and Rehabilitative Services this proceeding.
All three applicants admit there is no numerical need for additional nursing home beds in Palm Beach County when calculated by DHRS' community nursing home bed need rule, Rule 10-5.11(21) Florida Administrative Code. They contend however that a balanced consideration of the other criteria contained in Sections 381.494(6)(c) and (d), Florida Statutes, and DHRS' nursing home bed-need rule, requires approval of their respective applications.
Menorah House presented the testimony of Rabbi Bruce Warshal, Drew Gackenheimer, Rabbi Theodore Feldman, Rabbi Joseph Pollock, Rabbi Donald Crain, Dr. Karl Enselberg, Edward 0.
Holloway, Hope Wolfe, Katty Cohen, Dr. Leo Shatin, Spencer Gellert, Jim Strickland, Dr. Joseph Zinns, Dr. Ira Shesekin, Dr. Mitchell Goldstein and Julie Towne. Menorah House Exhibit Nos. l through 24 were received in evidence.
Manor Care presented the testimony of Rachelle Walter, Dr.
Richard Raybourn, Harold J. Lynch, Jr., Rabbi Simon Eckstein, Daniel G. Kratz, Dr. Robert Bergman, John Lee, Gary Rubart and Mark M. Richardson. Manor Care Exhibit Nos. l through 17 were received in evidence.
Riviera Beach presented the testimony of Robert Becht, Reverend A. C. Evans, William E. Wilkins, Nicholas S. Raich and Robert Eugene Books, and introduced one exhibit in evidence., DHRS presented the testimony of Joyce Farr and introduced Exhibit Nos. l through 6 in evidence.
Final action on these applications is governed by Section 381.494(6)(c) and (d), Florida Statutes, and Rule 10-5.11(21), Florida Administrative Code. Prior to final hearing, DHRS, Manor Care and Menorah House filed a Prehearing Stipulation, agreeing that the criteria contained in Section 381.494(6)(c)(6), (7),
and (11), Florida Statutes, do not apply to the applications of Manor Care and Menorah House. These parties also agreed that the two applications satisfied the criteria contained in Section 381.494(6)(c)(13) and (6)(d)(3), and Section 381.494(6)(c)(8) (concerning the availability of resources, including health manpower, management personnel and funds for capital and operating expenditures). Riviera Beach, which did not
participate in the required prehearing conference, subsequently adopted the stipulation and is bound by it.
The transcript of hearing was filed on July 2, 1986. The parties filed proposed findings of fact by August 4, 1986.
Rulings on these findings are contained in the attached Appendix.
Based on the evidence adduced at hearing, the following facts are determined:
FINDINGS OF FACT
Application by Menorah House A.
In January 1985, Hillhaven, Inc. d/b/a Menorah House- Hillhaven filed an application for a CON authorizing establishment of a 120-bed nursing home in western Boca Raton, Florida. The proposed nursing home, to be named "Menorah House," would cater to the specific needs of the elderly Jewish population of south Palm Beach County.
Hillhaven, Inc., is a national nursing home company and a subsidiary of National Medical Enterprises, Inc., one of the largest providers of health care in the United States. Menorah House would not, however, be run solely by Hillhaven, but would be operated pursuant to an agreement between Hillhaven and the South Palm Beach County Jewish Federation ("South County Jewish Federation").
Palm Beach County has two separate Jewish community organizations, the Palm Beach County Jewish Federation and the South County Jewish Federation. The South County Jewish Federation is an umbrella agency overseeing the activities of more than 70 Jewish community service organizations operating in southern Palm Beach County. These include a number of organizations and programs designed to serve the needs of the elderly in the area. The geographic area covered by this federation covers that portion of Palm Beach County south of Atlantic Boulevard and includes the communities of Delray Beach, Highland Beach and Boca Raton. The federation has 85 full-time employees and approximately 1700 active volunteers assisting with its activities.
The Palm Beach County Jewish Federation includes West Palm Beach and the area north of the South County Jewish Federation. The Palm Beach County Federation has approximately 50,000 Jewish residents within its boundaries in comparison, there are 68,000 Jewish residents within the boundaries of the South County Jewish Federation. The residents living in the Palm Beach County Jewish Federation have a highly utilized 120-bed nursing home available to them at Morse Geriatric Center. DHRS recently set a precedent, although tentative, by awarding Morse Geriatric another 160 beds to serve Jewish residents, despite an absence of numerical need under the nursing home bed-need rule. The nursing home beds (existing and proposed) of Morse Geriatric are unavailable to residents of southern Palm Beach County living within the boundaries of the South County Jewish Federation.
The South County Jewish Federation is in the process of designing a new and comprehensive Jewish community
services campus to be located on 28 acres of donated land in western Boca Raton. This land is across the street from the newly opened West Boca Medical Center, a 170-bed acute care hospital owned by National Medical Enterprises. The campus will include new administrative offices for the South County Jewish Federation, new offices for the Family and Children's Services Agency a community center and an athletic center, day school, tennis courts, playing fields and family services offices, in addition to the administrative offices. This campus will be operated by 85 full-time employees of the South County Jewish Federation and 1700 active volunteers. The Family and Children's Services Agency is an agency that provides a variety of counseling services, including numerous services for the elderly. Adjacent to one side of the campus will be a 100-unit adult congregate living facility designed to provide moderate income housing for the elderly. The athletic center will include a gymnasium, racquetball and basketball courts, a sauna and steam baths. The cultural center will include a large auditorium for plays and other presentations. The activity center will include arts and crafts rooms, game rooms and an activity center for senior adults. The campus will also include a Jewish Community School.
All of these services and facilities are geared toward serving the large Jewish population of southern Palm Beach County. This campus bears an important relationship to Menorah House.
Directly adjacent to the campus is the five acres on which Menorah House would be located. This location would provide nursing home residents with direct and ready access to the services and facilities of the Jewish community campus, as well as direct and convenient access to West Boca Medical Center.
Four principal factors would make Menorah House a uniquely Jewish nursing home. First, the facility will be kosher. The keeping of kosher is an age-old aspect of Judaism. Many conservative and orthodox Jews have kept kosher all of their lives and, in their twilight years, the ability to maintain a kosher lifestyle is essential to their emotional and physical well being. Kosher dietary laws deal not only with what foods may be eaten, but also with the manner in which animals are slaughtered, the way food is prepared, and what foods may be eaten together. Since a kosher kitchen requires extra space, Menorah House proposes a kitchen that is one and one-half times larger than normally required for a 120-bed nursing home.
Although this project is still in its early planning stages, Hillhaven has been in contact with the South County Board of Rabbis to discuss and plan for the unique aspects of a kosher kitchen. The kitchen would be certified by the Rabbinical Association of Southern Palm Beach County, which has passed a resolution endorsing the project. The South County Board of Rabbis is the organization that would certify and oversee the kosher kitchen.
Second, Menorah House will focus on the special religious needs of its Jewish residents. Judaism is a religion rich in holidays, with eight or nine major holidays throughout the year, often lasting more than a week at a time. Additionally, the Sabbath is an important Jewish holiday that comes every week and is celebrated in many Jewish households. Menorah House would include a synagogue and would, through the South County Jewish Federation and its parechaplaincy program, minister to the religious needs of its residents. Religious services would be presented in a Jewish surrounding as compared to the typical nursing home, where elderly Jewish patients must
celebrate their holidays surrounded by Christian symbols, such as those associated with Easter or Christmas. These symbols are disquieting to many elderly Jews.
Third, Menorah House would create a home-like setting geared to the specific religious and cultural needs of Jewish patients. For example, the South County Jewish Federation will provide Yiddish speaking volunteers. Many elderly Jews revert back to their native language as they get older. The availability of these volunteers would enhance communication with patients and enable the professional staff of the nursing home to better serve the needs of patients. Additionally, the availability of the services of the Federation and the proximity of its campus will make this a uniquely Jewish nursing home. The Jewish community and athletic center will provide activities for ambulatory residents of the nursing home, as well as provide passive enjoyment for those who are less active, thereby enhancing the quality of their lives. Additionally, the Federation plans to have daily activities involving both nursing home patients and day school students. For example, there would be an adopt-a-grandparent program, which would benefit both patients and students.
A fourth factor making Menorah House a Jewish nursing home is that it will provide an atmosphere which will be conducive to Jewish culture and enable it to flourish. Judaism is both a religion and a way of life. Menorah House will be sensitive to this and will emphasize aspects of Jewish culture and tradition in all of its activities.
The need for community nursing home beds is determined in various ways. Rule 10-5.11(21), Florida Administrative Code, provides that new or additional nursing home beds in a service district will "not normally" be approved unless there is a need for those beds in accordance with the mathematical formula contained in that rule. In the instant case, all parties agree that the nursing home bed need formula does not project a need for the additional beds proposed by the applicants in Palm Beach County, a sub district of DHRS Service District IX. However, numerical need is but one of several factors to be considered in determining whether beds are needed. While the approval of beds in excess of numerical need is done only in unusual circumstances, the need for the 120 Jewish nursing home beds proposed for Menorah House has been shown to be unusual and exceptional, issuance of a CON is justified under the exception specifically provided by bed-need rule.
Several years ago, the South County Jewish Federation retained Dr. Ira Sheskin, a demographer, geographer and professor at the University of Miami, to study the Jewish population in southern Palm Beach County. He prepared a detailed scientific report which was accepted in evidence.
According to Dr. Sheskin there are approximately 68,000 Jewish residents in the geographic area covered by the South County Jewish Federation, making this Jewish community one of the largest in the country larger than the Jewish population of major cities like Dallas, Houston, Cincinnati and Atlanta. This south county Jewish community is also considerably larger than the Jewish community in northern Palm Beach County. Because southern Palm Beach County is mainly a retirement community, it has the fourth or fifth largest elderly Jewish community in the United States. Approximately 63% (or 43,000 people) are over the age of
Dr. Sheskin estimated that by 1988 there will be almost 80,000 Jews living in south Palm Beach County, over 50,000 of whom will be over 65. Dr. Sheskin's testimony and detailed report, both uncontroverted, are accepted as persuasive.
DHRS has previously approved a specialized Jewish nursing home to serve a Jewish population of this size. Morse Geriatric Center is an existing 120-bed nursing home in West Palm Beach. It operates in close cooperation with the Palm Beach County Jewish Federation and has a kosher kitchen certified by the Palm Beach County Board of Rabbis. (These organizations are distinct from the South County Jewish Federation and the South County Board of Rabbis.) Despite the fact that there are currently excess nursing home beds in northern Palm Beach County, Morse Geriatric Center is filled to capacity and has a waiting list of over 280 people. Based on current utilization trends in that facility, a person would have to wait seven years for a bed
to become available at Morse Geriatric Center. People are willing to wait because Morse Geriatric Center is a uniquely Jewish nursing home, similar to that proposed by Menorah House. Jewish families in northern Palm Beach County often make other arrangements to care for their elderly rather than place them in a non Jewish nursing home. Morse Geriatric categorically refuses to put people on its waiting list or admit people that live in southern Palm Beach County. Morse Geriatric, the only Jewish nursing home in the county, is thus unavailable and inaccessible to the 68,000 Jews living in southern Palm Beach County. Morse has achieved its high utilization rate in a Jewish community that numbers only around 50,000 people.
DHRS has also taken action which, at least tentatively, supports approval of the Menorah House application. In a batching cycle subsequent to the one in which Menorah House filed, DHRS recently preliminarily approved an additional 160 beds at Morse Geriatric Center (under the DHRS rule formula) despite the absence of numerical need in Palm Beach County. If finally approved and built, those 160 beds at Morse Geriatric would, at least under its present admission policy, serve the same northern Palm Beach County area and be unavailable to residents of southern Palm Beach County.
In its "State Agency Action Report" on Morse Geriatric's application for 160 beds, DHRS evaluated the application against Priority VI of the District IX Local Health Plan:
Priority VI
Priority shall be given to those applicants who can demonstrate a distinct patient population that is currently not being served within the sub district. Ethnic-type services including special dietary requirements and bilingual personnel shall be considered in review of an application.
[Evaluation]
Joseph L. Morse addresses this priority in detail regarding their adequacies and expertise in serving the Jewish community. The applicant states that their facility meets all the requirements of the Jewish dietary regulations for a truly kosher diet. The nursing facility observes the Sabbath and
all of the High Holy Days, meeting the Jewish residents' spiritual, cultural and kosher dietary needs.
Although the need methodology of Chapter 10- 5.11(21), FAC, indicates there is no bed-need in Palm Beach County, subsection (b) of this rule indicates that an applicant may demonstrate that circumstances exist to justify the approval for additional beds. In Palm Beach County, there exists a large elderly Jewish population requiring special services such as a strict kosher diet and observance of the Sabbath and Holy Days at services performed by the Rabbi in the nursing facility. These special services are not easily accessible or available to this ethnic population in nursing homes in District 9, except through Joseph L. Morse Geriatric Center which currently operates the only kosher kitchen. While there is one other nursing home in the district which reports that it serves kosher meals, that facility, the King David Center, is not certified by the Board of Rabbis. The applicant, Palm Beach Continued Care Manor, proposed also to provide kosher food for the residents requesting a strictly kosher diet and to offer religious services utilizing the local rabbis and ministers from the appropriate faiths. Joseph L. Morse, however, is the only kosher nursing facility in this district which is certified by the Board of Rabbis. The Center currently serves residents of Palm Beach, Martin, St. Lucie and Okeechobee Counties and meets the physical, cultural, spiritual and dietary needs of their Jewish residents.
(Menorah House Ex.9) Like Morse Geriatric, Menorah House will have a kosher kitchen certified by an authoritative board of rabbis, the South County Board of Rabbis, it will meet all of the dietary requirements for a truly kosher diet it will hold services on the Sabbath and Jewish Holy Days, and it will meet the physical, cultural, spiritual and dietary needs of the Jewish residents of the southern part of the county.
One of the reasons why DHRS preliminarily approved the additional 160 beds at Morse Geriatric was the submission of a petition containing approximately 9,000 signatures. Menorah
House presented evidence of similar force and effect. A survey of members of the South County Jewish Federation was conducted. One of the questions on the survey was, "If a member of your household needed a nursing home, would you definitely, probably, probably not, or definitely not, prefer a Jewish nursing home?" Sixty percent of those responding answered they would definitely prefer a Jewish nursing home and an additional 13% indicated they would probably prefer a Jewish nursing home. These results support a conclusion that 26,000 out of 35,500 households in southern Palm Beach county would definitely or probably prefer a Jewish nursing home, should a need to place a household member arise. With an average household size of just under two people, this shows widespread support for a Jewish nursing home among Jewish residents of southern Palm Beach County and is tantamount to a supporting petition with 50,000 signatures.
In essence; DHRS' actions are fundamentally inconsistent. It has granted, finally or tentatively, 280 beds to Morse Geriatric to serve a Jewish population of 50,000 people but refuses to grant 120 beds to Menorah House to serve 68,000 Jews. Despite the presence of other nursing home beds in the area, these 68,000 Jewish residents have no access to beds or facilities needed to meet their needs the uniqueness of which has been recognized by DHRS as a legitimate basis for approving a CON application despite lack of numerical bed-need under the formula.
Menorah House presented other compelling evidence of need for a nursing home which provides a Jewish living environment. Rabbi Joseph Pollock has received repeated inquiries concerning the availability of a Jewish nursing home. His response:
I recommend that we make do as best that we can. It means if they want kosher meals, we would have to bring in airline meals. Or stick to strictly vegetables or fruit or something like that. It's not healthy for them, they are not going to get a balanced diet. It bothers them, because the older you get the closer you feel you want to get to God. You want to make amends, possibly for some of the things you haven't been doing in your younger years religiously. And being kosher is one of those things. Attending service is another one of those things. It's all part and parcel of them.
Q. Is this a problem just for the elderly
person; or do you have problems with families as well? How would you describe that?
A. It's a general problem if people have any concern about their Jewishness. In, hospital[s] as well, [the] stay in hospitals is comparatively short. In a few days we can manage to do things. If someone is going to be a long-term resident of a nursing home, this may last for years. Anyone who has had a traditional upbringing, or would like to get a little closer, as I said, to his relig ion, finds it practically impossible to do so in an unkosher place.
Tr. 184-185)
On why a Jewish nursing home is necessary to serve the unique needs of elderly Jewish people, Rabbi Pollock stated:
A. But generally, you have a Jewish feeling, if you have a feeling about your Jewishness, strong feeling about your Jewishness, there is no other place you'd rather be in than a Jewishly run home.
There are too many aspects of it really to discuss .. I don't want to belabor the point. Such as synagogue service, where a place is set aside. It's not just a kosher meal which comes in a tinfoil pan. It's a properly prepared dietically balanced kosher meal prepared the way it should be prepared.
To know there is a rabbi available on the premises, to know there is a synagogue available to walk into any time you want to pray, and not to concern yourself if it's a social room or used for many different purposes a theatre as a showroom or what ever it's a different atmosphere than walking into a church and walking into a synagogue if you want to be a Jew or Christian.
(Tr.186 )
Rabbi Pollock's description of the special needs of elderly Jewish patients, corroborated by other Jewish leaders and gerontologist Katty W. Cohen, was uncontroverted and is accepted as persuasive.
Menorah House also presented the testimony of Dr. Leo Shatin; a Ph.D. psychologist; Spencer Gellert, a clinical social worker and Executive Director of the Family and Children's
Services Division of the South County Jewish Federation and Katty Cohen, a gerontologist, licensed mental health counselor, and specialist in the needs of the Jewish elderly. From each of their professional prespectives, these witnesses substantiated the unique; and unmet, nursing home bed needs of elderly Jewish patients. Additionally, the South County Jewish Federation recently initiated a telephone advisory service to the residents of southern Palm Beach County. During the first six months of operation, this service received approximately 2,000 telephone calls. Interestingly, one-third of these callers inquired about the existence and availability of a Jewish nursing home in southern Palm-Beach County. This generally perceived need for a Jewish nursing home was corroborated by the testimony of three Jewish physicians practicing in Delray Beach and Boca Raton.
These physicians substantiated, as did the Jewish religious and
social service leaders, the dramatic growth of the Jewish community and the authentic need of Jewish residents for access to a Jewish nursing home.
The need for the Menorah House nursing home was also demonstrated by the testimony of two experts in health care planning. Ed Holloway, a professional health planner and Executive Director of the District IX Local Health Council, testified with regard to the consistency of the Menorah House application with the program priorities contained in the Long Term Care component of the Local Health Plan. This Plan includes program priorities for applicants that have a documented history of providing good resident care, staffing ratios that exceed minimum requirements, and a willingness to provide services to Medicaid patients. More importantly, the Local Plan confers a specific priority to applicants that can demonstrate a distinct patient population that is not currently being served within the district. A kosher facility is mentioned as a example of a nursing home serving a unique patient group that may require special consideration.
The Menorah House application meets, and is fully consistent with, the program priorities contained in the Local Health Plan. Menorah House will be a freestanding nursing home with 120 beds: will provide a minimum of 30% of its patient days to Medicaid patients if those patients are available and in need of services and will provide a broad range of long-term care services such as adult day care and respite care. It has a documented history of providing good resident care will have staffing ratios that meet or exceed minimum requirements will provide for the treatment of residents with mental health problems will provide intensive rehabilitation services where necessary and, most importantly, will serve the distinct unmet needs of a large and growing Jewish population.
There are no viable or practical alternatives to the approval and construction of a specialized Jewish nursing home to serve the residents of southern Palm Beach County. Existing providers of nursing home services in southern Palm Beach County have not met, and have not been shown capable of meeting, the unique needs of the large Jewish community.
Hillhaven owns and operates approximately 400 nursing homes nationwide. It has numerous internal committees and procedures to insure high quality care and employs full-time consultants to periodically visit each Hillhaven nursing home. It currently owns three nursing homes in Palm Beach County, each of which has been recommended for a superior rating, the highest rating possible. The regional director for Hillhaven is a licensed nursing home administrator and is certified to train other nursing home administrators. He regularly visits each of the nursing homes in his district to assure that the highest quality of care is provided. Menorah House would benefit from these quality control procedures. Additionally, the quality of care at Menorah House should be maintained at a high level because of the participation and involvement of the South County Jewish Federation. Literally hundreds of volunteers will be involved with the nursing home and the Federation insists that only nursing home operated under its auspices will be nothing
less than a superior facility. The proximity of the nursing home
to the Jewish community campus and the West Boca Medical Center should also enhance the quality of care at Menorah House.
Hillhaven has not had a nursing home license denied, revoked, suspended, nor a home placed in receivership during the past thirty-six months.
The relationship between Menorah House and the Federation campus will also provide economies and improvements in service due to joint, cooperative or shared health care resources, The volunteer workers will enhance the quality of life at the nursing home, as well as confer an economic benefit. Menorah House, through its affiliation with Hillhaven and National Medical Enterprises, will also have access to national buying contracts and professional consulting services provided by the parent company.
South County Jewish Federation plans to operate a gift shop in Menorah House, the proceeds of which will be funneled back into the nursing home. Proceeds from the gift shop, along with Federation funds, will also be used to insure that services will not be denied due to inability to pay. This is a commitment by the South County Jewish Federation over and above Hillhaven's commitment to provide care to Medicaid funded patients. As so
presented, it is a commitment binding on Hillhaven and incorporated by the Menorah Home application.
The total project cost for Menorah House is estimated to be $3,800,000. Funds are available through National Medical Enterprises to finance the project and insure its short term financial feasibility.
The short and long-term financial feasibility of Menorah House was established by the testimony of Robert Pacquer, an expert in health care finance. His testimony, accepted as persuasive; showed that Menorah House would turn a small profit even in its first year of operation, with a projected 75% occupancy level. Due to the pronounced need for the facility, his occupancy projections are likely to be conservative and the overall financial feasibility of the project is assured. Mr. Pacquer took into account some of the increased costs of a Jewish nursing home, such as the added expense of a kosher kitchen. However, this did not negatively impact his overall conclusion regarding financial feasibility.
None of the other parties, most notably DHRS, offered any facts or any competent substantial evidence to refute the need for Menorah House based on a claim of exceptional circumstances.
II.
Application by Manor Care
A.
Manor Care is an existing 120-bed nursing home located in Boynton Beach, just north of Delray Beach, about four minutes travel time from Bethesda Memorial Hospital and ten minutes from Delray Community Hospital.
Manor Care opened in February 1985. After twelve months, it achieved an occupancy of 90%, after 14 months, an occupancy rate of 95%.
Manor Care normally has a list of 30 to 40 patients waiting to be admitted into its nursing home.
The primary service area of Manor Care is Boynton Beach and Delray Beach. Manor Care receives patients residing north and south of its nursing home. Seventy-five percent of its patients live within five miles of its nursing home.
Manor Care offers a full range of nursing services. These include skilled nursing care, physical therapy, occupational therapy, speech therapy, respite care for patients
placed for a short period of time, and medical rehabilitation care.
Manor Care is certified to provide services to Medicare patients. This means that Manor Care meets certain skilled nursing and staffing ratio standards.
Manor Care also participates in the Medicaid program.
Manor Care has a residents advisory council to accommodate and meet the needs of its residents. It has received a superior license rating from DHRS.
B.
At issue in this proceeding is Manor Care's proposal to build a 60-bed addition to its nursing home. This addition would be committed to meeting the particular needs of the Jewish elderly and would operate, in large part, as a separate Jewish nursing home. Like Menorah House; it is designed to create a complete Jewish living environment.
This 60-bed addition will include a kosher kitchen and a synogogue. In addition to providing nursing and medical support services, it will host Jewish religious and cultural activities. Although connected to the existing nursing home, it will have its own separate entrance.
Although the primary purpose of this 60-bed addition is to serve the unique needs of elderly Jewish patients, it will be accessible to all persons, regardless of religion or place of residence.
The 60-bed addition will have its own patient services manager, who will develop appropriate recreational, social and cultural activities.
It is reasonably anticipated that there will be volunteer support for this proposed Jewish nursing home addition. Residents of surrounding condominiums have voiced support for the proposal.
c.
Many local Physicians support the Manor Care application. For example, 80-90% of the physicians at Delray Community Hospital are Jewish. Twenty-five physicians at this hospital were approached and each indicated support for the Manor Care proposal.
Jewish residents in the existing Manor Care facility, as well as their families, also support this proposed addition. At least 80 Jewish patients have been admitted in the Manor Care facility in the 14 months prior to hearing.
D.
On the same campus as the existing nursing home and proposed addition, Manor Care proposes to open a 120-bed adult congregate living facility ("ACLF") in 1987. An ACLF is a housing facility for the elderly who need minimal assistance in daily living but do not require the full scope of nursing home services it bridges the gap between independent living and full nursing care.
The ACLF proposed by Manor Care will have a full range of social programs, including library, chapel, game room, multi- purpose room, exercise room; ice cream parlor, and gift shop. These ACLF services would be convenient and accessible to residents of the proposed 60-bed addition.
The ACLF will be located on land currently owned by Manor Care, immediately adjacent to the existing nursing home and the proposed addition.
E.
The cost of the proposed 60-bed addition, with a planned opening date of May 1988, is a little more than 1.6 million dollars. It will be financed with 75% debt and 25% equity.
The patient payor mix for the proposed addition is 30% Medicaid, 9% Medicare, and 61% private pay.
Utilization in the first year is conservatively projected to be 65%: in the second year, 95%.
The full range of services now provided at the existing nursing home will be offered to, and shared by, residents of the proposed 60-bed addition.
The proposed addition would, however, be used only as a Jewish nursing home, and Manor Care is agreeable to accepting this restriction as a binding condition to its CON.
The application for this 60-bed addition was filed prior to the opening of the Manor Care facility. Based on more recent information and actual experience at the Manor Care facility; minor adjustments have been made to the project. These adjustments relate to the mix of semi-private and private rooms, the level of Medicare utilization, and other matters which do not change the essential nature or scope of the project.
F.
The findings under section I, infra, concerning the manifest need for Jewish nursing home beds in southern Palm Beach County; apply with equal force to the Manor Care application.
The needs of the Jewish elderly are unique and genuine the elderly Jewish population in the area is large and still expanding; there are no Jewish nursing home beds currently available in the area: Jewish elderly desire to be admitted to nursing homes in the area where they live: and, there is widespread physician and community support for Jewish nursing home beds.
There are several acceptable ways to calculate the number of new Jewish nursing home beds needed in southern Palm Beach County. One way is to allocate 27 beds per 1,000 population over 65. Using this formula for southern Palm Beach County, the Jewish nursing home bed-need for 1988 is 1367 beds for 1989, it is 1458 beds. This calculation assumes that all Jewish elderly would use a Jewish nursing home. If only 25% of the Jewish elderly preferred a Jewish nursing home, the Jewish bed need would be 342 beds in 1988 and 364 in 1989, without taking into account the Jewish population north of Delray Beach.
Another way to calculate Jewish nursing home bed need is based on the historical rate of nursing home use in Palm Beach County. In 1985, the use rate was 6048 patient days per 1000 population. Applying this use rate to the projected Jewish elderly population in south Palm Beach County produces a 1988
bed-need of 932, and a 1989 bed-need of 994. If only 25% of Jewish-elderly preferred a Jewish nursing home, that would show a bed need of 223 in 1988, and 249 in 1989. If this second methodology is applied only to the projected growth in Jewish population from 1985-1988, a need of 205 is shown.
Both methodologies are reasonable and conservative. They are conservative because the population of Palm Beach County is aging; the Jewish population is older than the county average
(for the age groups of 65-74 and 75+) and the rate of nursing home use is increasing in Palm Beach County. Expert opinion establishes, without dispute, that there is a Jewish nursing home bed need far in excess of 120 beds. Even Hillhaven, which opposes the Manor Care application, acknowledges that if Menorah House is approved, it will be full and have a large waiting list soon after becoming operational.
G.
There are more Jewish elderly in Delray Beach than in Boca Raton. (Manor Care will be located just north of Delray Beach: Menorah House, in Boca Raton.) The proximity of a nursing home to patients is very important to patients as well as their families. Elderly people prefer to go to the closest nursing home which provides appropriate care.
Most hospital patients in need of nursing home care are referred directly from the hospital to a nursing home. The closer a nursing home is to a hospital, the more likely there will be referrals between the two facilities. Manor Care is located four minutes from Bethesda Memorial Hospital and ten minutes from Delray Community Hospital. Moreover, Boynton Beach and Delray Beach are considered one medical community.
H.
Consequently, many Jewish elderly persons residing in the southern half of Palm Beach County would choose to utilize the Manor Care facility. This is true even if Menorah House were approved since Manor Care would be closer than Menorah House to many of these residents. Even Hillhaven acknowledges that Manor Care's proposed addition would be appropriate to serve the Jewish elderly needs in the Delray Beach and Boynton Beach areas.
As already noted; additional nursing home beds can be approved for a geographic area based on special circumstances even if there is no numeric need shown under Rule 10-5.11(21). DHRS has no policy which limits the number of beds that can be approved for a given geographic area on the basis of special circumstances.
DHRS preliminarily approved the Morse Geriatric application for additional beds (despite lack of numeric need) based on the high concentration of Jewish elderly in the northern half of Palm Beach County. This approval signified a need for at least 280 Jewish nursing home beds for a geographic area encompassing 50,000-55,000 Jewish residents. The affiliation between Morse Geriatric and the Palm Beach County Jewish
Federation was not identified as a factor in DHRS' preliminary approval of the Morse application.
It is conceded that a preliminary, non-final approval of a subsequent application (such as Morse's) does not count against an application filed in a prior batching cycle.
I.
The Manor Care application is consistent with the - District IX Local Health Plan. The application meets the Plan's objective of providing for a 90% occupancy rate within two years of operation.
The application also meets the Plan objectives which relate to promoting continuity of care and the provision of all types of long-term services, such as rehabilitative care and skilled nursing care.
Priority I of the Plan does not apply to the Manor Care application. Priority II relates to the minimum size of a unit. Priority III establishes a minimum of 30% Medicaid participation. Priority IV relates to the provision of long-term care services, such as respite care and adult day care programs. Priority V relates to the quality of care and level of services to be provided. The Manor Care application is consistent with each of these priorities.
As already mentioned, Priority VI gives preference to applicants who demonstrate that a distinct patient population is currently not being served within the sub district. Ethnic type services are defined to include special dietary requirements. The rational given is that:
. some residents require special services (a kosher kitchen, for example) that are not available in most nursing homes. These special needs should be recognized in the certificate of need process.
(Hillhaven Ex. 10)
It is this priority which supplied the basis for DHRS' preliminary approval of the Joseph Morse application. The Jewish elderly population in Palm Beach County is a special ethnic group within the meaning of this priority. There is no pre-established numerical limit on the number of Jewish nursing home beds that can be approved under Priority VI. The Plan does not limit the number of beds that should be approved to meet the needs of elderly Jewish patients in Palm Beach County.
The Manor Care proposal would be well utilized if approved and would be used solely as a Jewish nursing home.
There is no reasonable alternative to the Manor Care proposal in order to adequately meet the unique and genuine nursing home needs of the Jewish elderly in south Palm Beach County.
Converting the existing Manor Care facility to a Jewish nursing home would not be a reasonable alternative. Conversion would place an unfair burden on the non-Jewish residents who currently reside there.
Even with approval of Menorah House; the Jewish elderly in Palm Beach County wil1 experience serious problems in receiving needed nursing home care unless the Manor Care application is approved.
K.
Manor Care of Boynton Beach provides nursing home care which serves as a benchmark for the Boynton Beach/Delray Beach medical community. It has an excellent nursing staff and has earned a superior license rating from DHRS.
Most hospital patients at Bethesda Memorial Hospital who require nursing care are referred to Manor Care. As a result; Manor Care is often full and has a waiting list. Because of its proximity to at least two hospitals, Manor Care can ensure continuity of care for its residents.
Manor HealthCare Corporation; the parent company, was formed in 1968 and is committed to providing the highest quality of care at all of its nursing homes. It owns 140 nursing home throughout the country, and nine nursing care homes in Florida.
Quality assurance is an important consideration to Manor HealthCare. Quality of care standards have been developed at the corporate level, and are implemented in all its nursing homes. The corporate standards reflect a composite of the strictest quality assurance standards in all the states in which Manor HealthCare owns nursing homes. Thus each nursing home meets or exceeds the standards of every state in which Manor HealthCare operates.
Manor HealthCare inspects its facilities routinely. Corporate representatives conduct unannounced two-day surveys to make certain that corporate quality standards are met.
Each Manor HealthCare facility is Medicare-certified.
Patients at each Manor HealthCare nursing home are periodically surveyed as to the level of their satisfaction (or dissatisfaction) with the quality of care and services provided. The questionnaires are returned directly to the corporate office so as not to inhibit candor.
Residents at Manor HealthCare nursing homes also have access to a corporate toll-free number in order to ask questions or report problems they are experiencing.
Manor HealthCare encourages continuing medical education and training for its employees. Employee orientation and on-going training programs are provided.
Manor HealthCare is devoted to meeting the religious and spiritual needs of its residents. This religious focus is intended to improve the quality of life at its nursing homes. Chaplains and religious programs are provided.
Manor HealthCare employs a full-time corporate chaplain who is responsible for chaplaincy programs at its nursing homes. Religious services for all religious groups are currently provided at the Manor Care facility in Boynton Beach.
L.
Manor HealthCare has past experience in owning and operating Jewish nursing homes. It successfully opened and operates a Jewish nursing home unit which occupies one floor of a large nursing home in Bethlehem, Pennsylvania.
This unit contains a kosher kitchen and synogogue, and offers a full range of cultural, educational and religious programs devoted to creating a Jewish living environment.
These religious and cultural events and programs are operated by an Orthodox Rabbi. (Of the various sects of Judaism, the Orthodox sect is the most demanding.)
It is important that the Jewish activities as well as the kosher kitchen be developed to meet strict Orthodox standards: in this way, that the religious requirements of all Jews can be met. At the Bethlehem unit, a Mashgiach monitors the kosher kitchen and Manor HealthCare has experienced no problems in operating it.
The Bethlehem 31-bed unit has operated successfully for four years. It has achieved national recognition for its
creation of a Jewish living environment within the larger confines of a community nursing home.
In establishing the Bethlehem unit; Manor HealthCare worked closely with the community and the local Jewish congregations.
At this unit, Manor HealthCare distributes a summary of Jewish religious and cultural observances to all residents. A Jewish prayer book, also distributed, was prepared by an Orthodox rabbi; and contains prayers both in English and in Hebrew. The prayer book has been distributed in other Manor HealthCare nursing homes throughout the country for the use of interested Jewish residents.
The non-Jewish residents at the Bethlehem nursing home have not expressed opposition to this dedicated Jewish unit.
Manor Care is capable of creating a Jewish living environment in its proposed 60-bed addition without joint venturing with the South County Jewish Federation. This conclusion is supported by Manor HealthCare's experience with the Jewish unit in Bethlehem, which has operated successfully without joint venturing with a Jewish federation.
Manor Care's views do not entirely coincide with those of the South County Jewish Federation. Manor Care wants to maintain control over admissions and admission policy and intends to serve residents without regard to the geographical boundaries of the federations. Manor HealthCare has had no difficulty in establishing and opening its approved nursing home projects, including the three it opened during the last few years in Florida. Each of its facilities in Florida has a superior rating and is experiencing high occupancy.
N.
After securing CON approval, Manor Care normally focuses its efforts on the construction phase when that is underway, operational plans are designed, staff is hired, and programs are developed six to eight months before opening.
If its CON application is approved, Manor Care will work with local religious leaders to formulate the operations and activities of the 60-bed addition. Manor Care will retain a Mashgiach during the final stages of construction to insure that the kosher kitchen is properly built.
The kosher kitchen and Jewish cultural and religious activities will be established according to Orthodox standards.
Rabbi Eckstein, at the Manor Care facility in Plantation, Florida, will furnish any needed assistance.
The Rabbinical Association of Southern Palm Beach County would, if asked, help Manor Care establish a kosher kitchen and create a Jewish living environment.
Both of the Jewish federations in Palm Beach county are willing to provide services to all Jews. Residents of Manor Care would benefit from these social services.
O.
Manor Care and its residents would also benefit from economies of scale and shared health care resources. Manor HealthCare offers centralized services to its nursing homes, including bookkeeping services, computer services, and national purchasing contracts.
P.
The proposed 60-bed addition will also share administrative, personnel, therapeutic, and nursing personnel with the existing nursing home, thus enhancing efficient and cost effective use of space and staff. A separate administrator will not be required. Also, physical therapists, occupational therapists; the director of dietary services, bookkeepers, the director of nursing, and the admissions director can be shared with the existing facility. Skilled and rehabilitative care would also be shared. Residents of the proposed addition will also benefit from the services and activities to be offered at the nearby ACLF scheduled to open soon.
Q.
The Manor Care proposed addition is financially feasible, both in the short and long-term. Manor Care at Boynton Beach currently operates at a 10% profit margin, though it is only in its first full fiscal year of operation.
The pro forma for this project is reliable and credible. The underlying utilization projections are reasonable and conservative. The projected gross revenues, revenue deductions, and expenses are based on actual experience at the Boynton Beach Manor Care facility. Revenues and expenses are inflated for pro forma purposes.
Kosher food costs are projected to be about $6 per patient per day. This is twice as costly as regular food, and is based on Manor Care's experience at its Bethlehem facility.
Staff expenses are based on ratios and salaries currently experienced the Manor Care facility. Since certain administrative and support personnel will be shared with the existing facility, one-third of their salaries has been allocated for pro forma purposes. This is a conservative and reasonable assumption.
III.
Application by North Riviera Beach Convalescent Center; Inc.
A.
North Riviera Beach Convalescent Center, Inc. ("Riviera Beach"), proposes to build a 120-bed skilled nursing care facility in Riviera Beach, a relatively small community located just north of West Palm Beach in Palm Beach County, Florida.
B.
The principals of Riviera Beach are Robert Becht and Nicholas Raich. Mr. Becht is the president, sole shareholder and chief operating officer of Care Management, Inc., a Florida corporation which manages nursing homes. Since 1972, Care Management; Inc.; under his direction, has managed between twenty and twenty-five nursing homes. Currently it is managing three in Florida; and is under contract to manage a fourth as soon as it is completed. The three nursing homes are Lowe's Nursing Home in Tampa; and Key West Convalescent Center, and Plantation Key Convalescent Center; both in Monroe County. The fourth nursing home is PHEO, Inc., which will be located in Jacksonville.
In addition to managing nursing homes, Mr. Becht owns Lowe's Nursing Home in Tampa, a 180-bed facility, and is a one- half owner, with Nicholas Raich, of the Key West and Plantation Key Convalescent Centers, both 120-bed facilities.
Nicholas Raich is a local builder and developer in Riviera Beach with twenty-five years of experience. His construction projects include residential subdivisions, hotel- type projects, and nursing homes. After members of the Riviera Beach black community asked him to consider building a skilled nursing facility in Riviera Beach; he discussed the financial feasibility of such a project with Mr. Becht. After concluding that the project would be financially feasible and would have the support of local religious, community and political leaders, they prepared and filed the CON application at issue. The facility would cost approximately $3,516,000.00, have 40,000 square feet,
and be similar in design to the Key West and Plantation Key Convalescent Centers.
C.
Riviera Beach bases its CON application on Priority VI of the District IX Local Health Plan, which gives priority to applicants who demonstrate that a distinct patient population is not currently being served within the subdistrict.
HRS denied Riviera Beach's CON application based solely on the application of the numeric formula of Chapter 10- 5.11(21), Florida Administrative Code, which admitted by all shows no need for the proposed project in 1988, the target year.
The proposed 120-bed skilled nursing home would be located in Riviera Beach, a predominantly black community. At present there are no skilled nursing care facilities in Riviera Beach.
Edward 0. Holloway, Executive Director of the District IX Health Council testified that under Priority VI of the Local Health Plan, "there could be enough of black elderly population within that group that possibly could definitely be underserved. And upon proof they are not getting service, then in the public's best interest I think everbody should have the ability to have services provided to them." (e.s.) (Tr. 244) Riviera Beach has failed to prove on this record that existing underutilized nursing homes in Palm Beach County are not available or accessible to the black residents of Riviera Beach. Neither has it shown that these black residents have unique or special needs that are not being met by existing nursing homes. No studies have been conducted which establish that the existing beds are unavailable to black residents.
D.
Riviera Beach extends from the northern 54th Street boundary of West Palm Beach three or four miles north to Lake Park. From east to west, it extends from Singer Island to Military Trail. Most of the inner-city population is black. The population of Singer Island is white and contained in about thirty highrise residential buildings. The inner-city residents generally have lower income levels then the residents of Singer Island.
There is widespread support among community, religious, and political leaders for locating the proposed nursing home in Riviera Beach. The City of Riviera Beach may be willing to provide free land through a 99-year lease to the operators of the facility, as well as 100 percent bond financing for construction. Without local government assistance, the facility probably would not be profitable or feasible due to the large number of indigent or lower income residents in Riviera Beach.
E.
Elderly people generally prefer to stay in their own community as opposed to leaving it when they get older. To obtain nursing home care, Riviera Beach residents must now leave their community. This difficulty has not, however, been shown to be of sufficient magnitude, without more, to justify the construction of a nursing home in Riviera Beach.
F.
The population of Riviera Beach is approximately 35,000 approximately 60% of the residents are black. In addition, there is a large elderly population.
This-is a stable community in which there are few transients. Many elderly blacks reside in adult congregate living facilities of which there are approximately thirty-seven; housing from five to sometimes twenty-five or thirty residents. These homes do not provide medical care. The residents are generally not able to pay for doctors, and according to Reverend
A. C. Evans, "doctors only come out if someone can pay for them." (Tr. 598)
The population of Riviera Beach in 1979 was 35,164. Of this population, 31 percent were age 65 and older: approximately 60 percent of these were black. Consequently, in 1979 there were approximately 6,541 elderly blacks residing in the Riviera Beach community. If the standard of twenty-seven
beds per thousand of elderly population is applied, approximately
177 nursing home beds were needed in 1979 to serve the needs of elderly blacks. Current needs have not been shown, however, since updated population figures were not presented.
Many of the elderly in Riviera Beach are living in substandard homes; ostensibly cared for by relatives or friends. In some cases, custodians have misused funds needed to care for these elderly residents. In the City Manager's opinion, there is a need for a nursing home in Riviera Beach where adequate care, can be provided and responsibility assigned. Under existing CON criteria, however, his opinion even if shared by other community leaders is insufficient to justify issuance of a CON when no need is shown under the DHRS bed-need rule and no exceptional circumstances have shown.
G.
A primary goal of the State Health Plan is to develop an adequate supply of long-term nursing care facilities throughout Florida. Despite Riviera Beach's contention, however, it has not shown that existing nursing home beds are inadequate to meet the needs of black Riviera Beach residents.
Another goal of the State Plan is to insure that appropriate long-term facilities are accessible to all residents of Florida. Again, Riviera Beach has not substantiated its claim that existing nursing homes in District IX are inaccessible to black residents of Riviera Beach due to race or economic statue.
A third goal is to insure that long-term care services are properly utilized throughout Florida. Although the proposed facility might, in a short time, achieve 100 percent utilization as predicted, the impact on other nursing homes in District IX, currently underutilized, is unknown.
The proposed 120-bed facility meets the minimum size requirements of Priority II-A of the Local Health Plan.
Priority III-A is also met, since it requires that a minimum of 30 percent of patient days be Medicaid: Riviera Beach anticipates approximately 80 percent Medicaid beds.
Riviera Beach's application also satisfies Priority V, which requires a history of providing good nursing care.
Staffing ratios for nurses and aides exceed minimum requirements.
The first objective of the Local Health Plan states that an occupancy rate for nursing homes should be equal to or greater than 90 percent within two years. Riviera Beach projects
an occupancy rate of 95-100 percent within thirteen months after opening. This projection, however, is largely speculative and not based on a generally accepted methodology or a professional study conducted in accordance with health care planning standards.
Priority IV is met in that Riviera Beach will provide a range of long-term care services.
H.
Riviera Beach's own witnesses, who opined on the need for the proposed nursing home, testified that a large part of the existing problem was that black residents did not have knowledge of, or access to information about, the existing nursing home services that are available. Reverend Evans was questioned about this problem:
Q. Isn't . that a part of the problem; the lack of knowledge and information on the part of the elderly minority, they don't even know those services exist?
A. That is definitely it. It was on the news, talking about the news on TV the other day, that same thing. That is the problem. And I think it's basically our fault.
When I say our fault, I'm talking about the leaders basically, because sometimes well, sometimes we don't know and a lot of times we don't go to get if from where we should get it from. So we need someone to help us out here and I try to get it when I can. And that is a big problem there.
(Tr. 608)
This testimony suggests that there may be a reasonable and less costly alternative to constructing the proposed nursing home.
Educational programs could be initiated which would systematically disseminate information on available nursing home services to black residents.
I.
In summary, Riviera Beach has failed to demonstrate that there is sufficient need for its proposed nursing home. The DHRS bed-need formula shows "no need." Existing underutilized nursing homes in District IX and Palm Beach County have not been
shown to be inadequate, unavailable, or inaccessible. No special or unique needs of black resident have been shown. The problem of residents having to leave Riviera Beach to obtain nursing services does not, in itself, justify issuance of a CON. (If it did, every small community could seemingly assert entitlement to a nursing home within its boundaries.) The honest and strongly held belief of community leaders that a nursing home is sorely needed and would bring many benefits cannot substitute for a demonstration of need by presentation of concrete and verifiable facts. The need to investigate and gather information on the availability of nursing home beds to black residents was alluded to several times, but such efforts have apparently not yet begun.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1), Fla. Stat. (1985).
The criteria for issuance of a CON for community nursing homes are contained in Section 381.494(6)(c) and (d), Florida Statutes. and Rule 10-5.11(21), Florida Administrative Code. By stipulation, the criteria of Section 381.494(6)(c)6, 7, 8, 10, 11 and 13, and Section 381.494(6)(d)3, are either satisfied or inapplicable.
In reviewing CON applications, a balanced consideration must be given to all criteria the appropriate weight assigned to each is not fixed, but varies on a case-by- case basis. Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So.2d 361 (Fla. 1st DCA 1984) Collier Medical Center, Inc. v. Department of Health and Rehabilitative Services, 462 So.2d 83 (Fla. 1st DCA 1985). A rigid formula cannot control the granting or withholding of a CON.
In addition to applying other statutory and rule criteria, DHRS uses a formula or methodology specified in Rule 10-5.11(21), Florida Administrative Code, to predict need for additional nursing home beds. DHRS will "not normally" approve additional beds unless the formula shows a need. Id.
All parties to this proceeding concede that the DHRS formula does not project a numerical need for additional nursing home beds in 1988, the target year. (Significantly, the formula assumes that all patients have the identical needs: special or unique patient needs go unrecognized.)
Special, exceptional, or "abnormal" circumstances have been shown, however, which justify approval of both the Menorah House and Manor Care applications.
These applications are consistent with priorities expressed in the State and Local Health Plans, Section 381.494(6)(c)1: there are no available nursing home beds in Palm Beach County which meet the unique ethnic, religious, and cultural needs of a large and growing population of elderly Jewish residents, Section 381.494(6)(c)2. There is, and will continue to be; sufficient demand to justify more than the total of 180 beds provided by the two applicants. It is uncontroverted that many elderly Jewish patients require a Jewish living environment for their physical and emotional well being and that the existing lack of Jewish nursing home beds creates a serious hardship. Both applicants are experienced providers of high quality nursing care and are capable of constructing and operating nursing homes which provide the kind of environment needed by elderly Jewish patients; Section 381.494(6)(c)3. Both projects are cost-effective and will derive benefits from economies of scale and shared health care resources, Section 381.494(6)(c)4; 5: both are financially feasible in the short and long-term. Finally, by locating needed Jewish nursing home beds in different facilities serving the same general area; competition will be enhanced.
The application by Riviera Beach, however, must be denied. Exceptional or special circumstances justifying issuance have not been shown. The Local Health Plan's requirement that an applicant show that a district patient population is not currently being served has not been met. Existing nursing home beds have not been shown to be unavailable or inaccessible. A less costly alternative to constructing a new and perhaps unnecessary nursing home, may be available namely, inform black residents of the services available at area nursing homes. Since need has not been shown, utilization and financial feasibility in the short and long term are uncertain.
Based on the foregoing, it is RECOMMENDED:
That the application by Hillhaven, Inc. d/b/a Menorah House-Hillhaven for a CON authorizing a 120-bed nursing home in southern Palm Beach County be GRANTED, subject to the following special condition:
(a) Beds will be made available to all, without regard to a patient's religion or place of residence. Further, elderly Jewish patients will be admitted without regard to ability to pay;
That the application by Manor Care of Boynton Beach for a CON authorizing a 60-bed addition to its existing nursing home in Boynton Beach be GRANTED, subject to the following conditions:
The new unit will provide a Jewish living environment; including kosher food and a full range of Jewish religious; cultural, and social activities; and
Patients will be admitted without regard to religion or place of residence; and
That the application by the North Riviera Beach Convalescent Center, Inc., be DENIED.
DONE and ORDERED this 19th day of August, 1986, in Tallahassee, Florida.
R. L. CALEEN, 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 19th day of August, 1986.
ENDNOTES
1/ The preliminary award of a CON is being contested in a pending Section 120.57(1) proceeding.
2/ The validity of such a policy is questionable.
3/ This statement is erroneous since Morse Geriatric serves only residents within the boundaries of the Northern Palm Beach County Jewish Federation.
4/ Joint venturing with a Jewish federation has not been shown to be a prerequisite to the successful operation of a Jewish
nursing home. Hillhaven successfully operates a 120-bed Jewish nursing home in Massachusetts which is neither operated by nor joint ventured with a Jewish federation. Moreover, Hillhaven did not have a joint venture agreement with the local Jewish federation when it applied for the CON at issue.
5/ In this regard. Menorah House has similarly deferred finalizing details for its kosher kitchen and Jewish programs. Menorah House has not yet hired a full-time staff coordinator, finalized design or operation plans for its kosher kitchen prepared a specific floor plan, selected a full-time rabbi (or determined what sect he should be), or prepared a programmatic description of the Jewish religious and cultural services to be offered.
APPENDIX I.
RULINGS ON DHRS' PROPOSED FINDINGS OF FACT
Adopted.
Adopted, but modified to reflect that, as established without contradiction by Mr. Richardson, the DHRS numeric bed need methodology treats all patients alike and does not take into account any unique or special nursing home needs of particular ethnic groups.
Adopted, but modified because this misses the point. The question issue is not discrimination against elderly Jews, but whether there are nursing homes currently available which meet their unique and legitimate ethnic needs. The question is answered in the negative.
II.
RULINGS ON RIVIERA BEACH'S PROPOSED FINDINGS OF FACT
1-11. Approved in substance.
Approved. Constitutes only recitation of testimony, but the evaluative factors which Mr. Holloway described may be reasonably used.
Approved. But See 12, infra.
Rejected as only recitation of testimony.
Approved in substance.
First sentence approved; second, rejected as only recitation of testimony.
First sentence approved; second, rejected as only recitation of testimony.
Approved.
Approved in substance, except for the last two sentences rejected as recitation of testimony.
Approved.
Rejected as only recitation of testimony.
Approved.
Approved, and modified to indicate that the City of Riviera Beach has not committed to either form of assistance.
Rejected as only recitation or as speculative.
Rejected as unsupported by the preponderance of competent substantial evidence.
Approved in substance.
Rejected as either unsupported by the evidence or as only recitation of testimony.
First sentence, approved: second, rejected as irrelevant and unproven.
Rejected, as "absolute necessity" for the proposed nursing home has not been proven.
Rejected as only recitation of testimony.
Rejected as only recitation of testimony and (in substance) as unproven.
Approved in substance.
Approved.
Approved in substance except for the last sentence, which is rejected as speculative.
Rejected as speculative and unproven.
Rejected as only recitation of testimony. Accepted to the extent that it states that there is no predominantly black nursing home in the county.
Approved, except "broad" is substituted for the word, "total."
Rejected as speculative and unproven. 39-43. Approved.
44-47. Rejected as speculative and unproven.
Approved in substance.
Rejected as recitation, but the principle that nursing home patients prefer to stay in, or close to, their home communities is accepted.
Approved except as to last sentence, which is rejected as speculative and unproven.
Approved, except as to last sentence, which is rejected as speculative and unproven.
Approved; except as to last sentence which is rejected as speculative and unproven.
Approved, except as to last sentence which is rejected as speculative and unproven.
54-57. Approved in substance.
Approved; except for last sentence which is rejected as speculative.
Approved.
Approved to the extent that it restates Priority VI.
Approved.
Approved in substance.
Rejected as only recitation of testimony.
Approved in substance.:
III.
RULINGS ON PROPOSED FINDINGS OF FACT FILED BY MENORAH HOUSE
1-33. Approved in substance.
The connotation of willful misrepresentation by manor Care is rejected as unproven.
First sentence, rejected as unproven, second sentence, approved.
Rejected as unproven, except for the statement concerning no previous contact with the two rabbinical boards in Palm Beach County.
Rejected as unproven.
38-40. Approved in substance.
IV.
RULINGS ON PROPOSED FINDINGS OF FACT FILED BY MANOR CARE
1-166. Approved in substance.
Approved, but modified to reflect that Hillhaven has not previously constructed and operated a Jewish nursing home in the county.
Approved.
169-71. Approved in substance.
172. Approved, except for second sentence which is rejected as unproven.
173-175. Rejected as unproven. 176-180. Approved in substance.
181. Rejected as a comment on the testimony and as unproven. 182-185. Approved in substance.
186. Rejected as unproven.
187-188. Approved in substance. 189-201. Approved.
Copies furnished:
C. Gary Williams, Esquire Michael J. Glazer, Esquire P. O. 80x 391
Tallahassee; Florida 32302
(904)224-9115
James C. Hauser, Esquire
O. Box 1S76
Tallahassee; Florida 32302
(904)222-0720
John Rodriguez, Esquire Bldg. One, Room 407 1323 Winewood Blvd.
Tallahassee, Florida 32301
(904)488-2381
Keith A. Seldin, Esquire 1340 U.S. Hwy I, Suite 106
Jupiter, Florida 33469
(305)747-3000
================================================================= AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
HILLHAVEN, INC. d/b/a MENORAH HOUSE-HILLHAVEN,
Petitioner, CASE NO. 85-2634
CON NO. 3879
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
/ NORTH RIVIERA BEACH CONVALESCENT CENTER, INC.,
Petitioner, CASE NO. 85-3320
CON NO. 3881
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
And
HILLHAVEN, INC., d/b/a MENORAH HOUSE-HILLHAVEN,
Intervenor.
/
MANOR CARE OF BOYTON BEACH
Petitioner, CASE NO. 86-0903 CON NO. 3877
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent,
And
HILLHAVEN, INC. d/b/a MENORAH HOUSE-HILLHAVEN,
Intervenor.
/
FINAL ORDER
This cause came on before me for the purpose ofissuing a final agency order. The hearing Officer assignee by the Division of Administrative Hearings (DOAH) in the above styled case submitted a Recommended Order to the Department of Health and Rehabilitative Servicas (HRS). A copy of that Recommended Order is attached hereto.
FINDINGS OF FACT
The Department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order excepts as follows:
Paragraphs 57 & 58 of the findings of fact set forth formulae for calculation of "the number of new Jewish nursing home beds needed in Southern Palm Beach County." These formulae are rejected on the following grounds:
They are conclusions of law.
They suffer from a major flaw in that they assume new construction is needed to meet the needs calculated. Existing or approved nursing homes could meet the same need by modifying kitchens to prepare Kosher food and making common space available for religious services and activities.
The use of arithmetic formulae to prove need justified by exceptional circumstances is not authorized by Rule 10- 5.11(21)(b)10, Florida Administrative Code.
The conclusions found in paragraphs 59 and 119 are likewise rejected for the reasons set forth above.
CONCLUSIONS OF LAW
The Department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order.
Based upon the foregoing, it is
ADJUDGED, that CON application 3879 is granted to Hillhaven subject to the following special requirements:
Hillhaven will serve a minimum of 30% Medicaid.
A Kosher kitchen and a Jewish synagogue will be included in the nursing home.
It is further adjudged that CON application 3877 is granted to Manor Care with the following special requirements:
Manor Care will serve a minimum of 30% Medicaid.
A Kosher kitchen and a Jewish synagogue will be included in the nursing home.
It is further adjudged that North Riviera's CON application 3881 is denied.
DONE and ORDERED this 4th day of November, 1986, in Tallahassee, Florida.
WILLIAM J. PAGE
Secretary
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:
R. L. Caleen, Jr. Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
Nell Mitchem (PDCFM) 1317 Winewood Boulevard
Building 2, Room 255
Tallahassee, Florida 32399-0700
C. Gary Williams, Esquire Michael J. Glazer, Esquire Post Office Box 391 Tallahassee, Florida 32302
James Hauser, Esquire Post Office Box 1876
Tallahassee, Florida 32302
Keith A. Seldin, Esquire
1340 U. S. Highway I, Suite 106 Jupiter, Florida 33469
John Rodriguez
Legal Representative Department of Health and Rehabilitative Services 1323 Winewood Blvd.
Building One, Room 407 Tallahassee, Florida 32399-0700
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U. S. Mail this 5th day of November, 1986.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and
Rehabilitative Service" 1323 Winewood Boulevard Building One, Room 407 Tallahassee Florida
32399-0700
| Issue Date | Proceedings |
|---|---|
| Aug. 19, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 05, 1986 | Agency Final Order | |
| Aug. 19, 1986 | Recommended Order | Certificate of Need was issued. No numerical need for nursing home beds but special circumstance present. Project provided unique ethnic environment for Jewish residents. |
