STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MERIDIAN, INC., MERIDIAN NURSING ) CENTERS, INC., and MANATEE MERIDIAN ) LIMITED PARTNERSHIP, )
)
Petitioner, )
)
vs. ) Case No. 86-0063
) (CON NO. 4154)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) MANOR CARE OF MANATEE COUNTY, )
)
Petitioner, )
)
vs. ) Case No. 86-0931
) (CON NO. 4153)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) FORUM GROUP, INC., SPONSOR OF ) RETIREMENT LIVING OF MANATEE COUNTY, )
)
Petitioner, )
)
vs. ) Case No. 86-0943
) (CON NO. 4159)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
The final hearing in these consolidated cases was held in Tallahassee, Florida, on December 2-5 and 12, 1986, and January 30, 1987. At issue in the case is whether the Department of Health and Rehabilitative Services should approve all or any part of any of the applications of the Petitioners each to build a 120 bed community nursing home in Manatee County, Florida.
Representing the parties were:
For Petitioner, Robert D. Newell, Jr. Meridian, Inc.: Robert D. Newell, Jr., P.A.
102 South Monroe Street Tallahassee, Florida 32301
For Petitioner, Donna H. Stinson, Esquire Manor Care of Moyle, Flanigan, Katz, Manatee County: Fitzgerald and Sheehan, P.A.
The Perkins House, Suite 100
118 N. Gadsden Street Tallahassee, Florida 32301
For Petitioner, R. Terry Rigsby, Esquire
Forum Group, Inc.: Moffitt, Hart, Rigsby & Herron, P.A.
215 S. Monroe Street, Suite 800 Tallahassee, Florida 32301
For Respondent, Darrell White, Esquire Department of Health Department of Health and and Rehabilitative Rehabilitative Services Services: 1323 Winewood Boulevard
Building 1, Room 407
Tallahassee, Florida 32399-0700
Meridian exhibits 1-8, 12, 14, 16-19 were received into evidence. Meridian exhibit 20 was officially recognized. Manor Care exhibits 1 and 2 were received into evidence. Manor Care exhibits 3-5 were officially recognized. Forum Group exhibits 1-7 were received into evidence. HRS exhibits 1-7 were received into evidence, and HRS exhibits 8-9 were officially recognized. Joint exhibits 1 and
were received into evidence. The transcript is in eight volumes.
FINDINGS OF FACT
Procedural history
In July, 1985, each Petitioner submitted an application for a certificate of need to build a 120 bed community nursing home in Manatee County, Florida. Manatee County is subdistrict 2 of Department of Health and Rehabilitative Services District VI. The application of Meridian was assigned certificate of need number 4154, the application of Manor Care was assigned certificate of need number 4153, and the application of Forum Group was assigned certificate of need number 4159. The applications were comparatively reviewed by HRS. After initial review, all applicants were denied.
The state agency action report does not discuss the availability, accessibility or adequacy of existing licensed community nursing homes in Manatee County.
Each applicant requested a formal administrative hearing upon the proposed denials of their applications, and those cases were assigned the above cases numbers and consolidated for comparative review and formal administrative hearing.
Prior to the hearing, each applicant filed an updated application. M Ex. 1; MC Ex. 1; FG Ex. 2. HRS objected to admission of evidence concerning updated applications, and particularly objected to evidence from Manor Care concerning services to Alzheimer's disease patients, but did not ask that the applications be remanded for further consideration by HRS.
The Petitioners' letters of intent, applications, and requests for formal administrative hearing were all timely filed. T. 16-17.
The Petitioners agreed that if need exists for 180 beds or more, each applicant would agree to receive certificates of need for one-third of such need.
Need
The applications of the Petitioners were received in the July, 1985, batching cycle, and the correct planning horizon for determining bed need pursuant to rule 10-5.0011(1)(k), the community nursing home bed rule, is July, 1988. T. 856.
Craig Thornton testified as to need on behalf of the Petitioners. Mr. Thornton's calculation of need pursuant to the numeric need rule resulted in a net need of 187 community nursing home beds by July, 1988, in subdistrict 2 (Manatee County) of District VI. T. 814.
Mr. Thornton's calculation of need used the following statistics (using the same abbreviations as used in the rule):
Licensed beds in the District (LB) of 5,557 as of June 1, 1986, rather than 1985. T. 837.
Licensed beds in the subdistrict 2 (LBD) of 1,005 as of June 1, 1986. T. 840.
Approved beds in the District (AB) of 508 was as of August 1, 1986. T. 838.
Approved beds in subdistrict 2 (AB) as June 1, 1986, was zero. T.
840-41.
POPE of 243,978 was July I, 1986 estimates of July 1, 1986
population of persons age 65 and older in District VI. T. 838, 840.
The poverty rate in District VI for persons age 65 and older (PBD) is higher than the poverty rate for the same age group for the state (PBS). T. 811.
Using these statistics, Mr. Thornton made the following calculations:
He calculated the second portion of the test in subparagraph e of the rule to determine whether the poverty adjustment should apply. That calculation, (LB + AB)/POPE, results in 0.02486, rounded.
Since the last calculation was less than 27/1000, and since the poverty rate in District VI is higher than the rate statewide, Mr. Thornton next calculated PA, which is the poverty-adjusted number of beds in the District. This calculation pursuant to the rule is (27 X POPE)/1000. The result is 6,587 beds using Mr. Thornton's statistics.
Following the next step in the rule, Mr. Thornton calculated SPA, which is the final subdistrict community nursing home allocation where a poverty adjustment is made. SPA pursuant to the rule is (LSD/LB) X PA. Using the above figures already obtained from Mr. Thornton's statistics, SPA is 1,192. T. 813.
Finally, Mr. Thornton calculated net bed need by subtracting LSD and 90% of AB in the subdistrict (which was 1,005, using his statistics) from SPA. The result is a net bed need of 187 beds in subdistrict 2.
The calculation of net bed need performed by Mr. Thornton is not correct as a matter of law, which will be discussed in the conclusions of law.
There were 5,270 licensed community nursing home beds (LB) in District VI as of June 1, 1985. HRS Ex. 3 and 4; T. 863, 866.
There were 765 licensed community nursing home beds (LBD) in subdistrict 2 of District VI (Manatee County) as of June 1, 1985. HRS Ex. 3 and 4; T. 866.
The July 1, 1985, estimate of population of persons in District VI who were 65 to 74 years of age on July 1, 1985, (POPC) was 126,792, and the July 1, 1985, estimate of population of persons in District VI who were 75 years of age and above on July 1, 1985 (POPD) was 84,723. HRS Ex. 3 and 6; T. 872-73. The total of these two populations is 211,515 (POPE). HRS Ex. 3.
The July 1, 1985, estimate of population of persons in District VI who were 65 to 74 years of age on July 1, 1988, (POPA) was 135,921, and the July 1, 1985, estimate of population of persons in District VI who were 75 years of age and above on July 1, 1988 (POPB) was 94,434. HRS Ex. 3 and 6; T. 873.
The occupancy rate (OR) for subdistrict 2 (Manatee County) for the period from October, 1984, to March, 1985, was 94.6%. T. 866; HRS Ex. 3 and 4.
HRS has a policy of counting beds as approved if approved before the supervisor signs the State Agency Action Report (SAAR) initially determining whether to grant or deny an application. This policy is not applicable to this case since no such beds were approved in the period between June 1, 1985, and the date of signature upon the state agency action report.
Additionally, HRS has a policy of counting as approved all beds licensed after the cutoff date for counting licensed beds (here, June 1, 1985) but before the date the supervisor signs the SAAR. HRS Ex. 3, explanation on P. 2; T. 869.
Pursuant to the above policy, there were 755 approved beds (AB) in District VI and 240 approved beds (AB) in subdistrict 2. Id. It should be noted that these numbers would be the same if these beds had been counted as approved if approved on June 1, 1985. Thus, application of the policy in this case is unnecessary.
Based upon the statistics set forth above, the preliminary subdistrict allocation (5A) of community nursing home beds for July, 1988, is 889. HRS Ex. 3.
Based upon the statistics set forth above, the poverty adjustment contained in subparagraph e of the rule does not apply, even though the District VI poverty rate is higher than the statewide rate, because licensed beds (LB) plus approved beds (AS) in District VI divided by the July 1, 1985 estimate of population in the District on July 1, 1985, of age 65 and above (POPE) is more than 27/1000. HRS Ex. 3, step 5.
Based upon the statistics set forth above, there is no need for any portion of any of the projections proposed by the Petitioners. The final net bed need for subdistrict 2, pursuant to subparagraph i of the rule, is a surplus of 92 beds. HRS Ex. 3, step 6; T. 862.
Suncoast Nursing Center is the former name of the Center at Manatee Springs. T. 879.
Suncoast Nursing Center had 120 approved community nursing home beds on March 24, 1984, and these 120 beds became licensed on July 17, 1985. HRS Ex. 5; T. 868. It is located in Bradenton (Manatee County), Florida, J. Ex. 1, pp.
and 6, and opened in September, 1985. Id. at p. 6.
The Center at Manatee Springs currently provides services only to patients suffering from traumatic brain injury. J. Ex. 1, P. 7. The current operational goal of the Center at Manatee Springs is to seek out patients suffering from traumatic brain injury and that diagnosis is currently one of the Center's admission criteria. Id. at p. 9, 10, 16; J. Ex. 2, p. 10. The Center has expanded its marketing efforts to the entire nation. Id. at p. 26. It recently ordered new brochures to advertise itself for the purposes discussed above. Id. at p. 27.
Traumatic brain injury is caused by trauma to the head from the outside, and does not include injuries originating internally, such as due to stroke. J. Ex. 2, pp. 5-6.
On December 1, 1986, the Center had 36 traumatic brain injured patients in its 120 beds, and the average age of these patients was 26. Id. None of the patients were over age 65. Id. at p. 7.
The Center at Manatee Springs does not currently consider itself to be in competition with community nursing homes in the area. J. Ex. 1, p. 16.
The Center has purchased certain kinds of equipment specifically for treatment of traumatic brain injured patients (such as a brain atlas, ventilators for comatose patients, and special audiology equipment for speech pathology and memory loss). J. Ex. 1, p. 10-11. A lot of new equipment is in the process of being ordered. Id. This equipment is usually not found in a community nursing home. Purchase of certain new equipment is in the planning stage, Id. at p. 9, but has been delayed because the census has not yet been that strong. Id. at p. 12. The facility has not been remodeled in any way. Id. at p. 23.
The Center is specially staffed to care for patients having traumatic brain injury. J. Ex. 1, p. 13. The Center has a high percentage of nurses on its staff, and has therapists of all types, speech pathologists, and neuropsychologists. Id. at p. 14.
The Center informally contacted HRS and obtained approval from HRS to try to increase its occupancy by admitting traumatic brain injured patients. T. 901; J. Ex. 1, p. 22.
HRS apparently views the practice of the Center of not taking conventional community nursing home patients as a "problem," and HRS's expert witness was of the opinion that absent permission from HRS, the Center would have to provide services to conventional community nursing home patients. T. 900-01. HRS does not have a rule governing the procedure to be followed in this
situation, however, and has proceeded on informal policy. Id. If the Center were to continue indefinitely to refuse to provide services to conventional community nursing home patients, HRS would view that as a significant problem. T. 903.
For the long term, the Center has not decided what the patient mix should be, and is still studying the question whether it can continue to provide services only to traumatic brain injured patients. Id. at p. 15. The Center is not limited by its license to treat only traumatic brain injured patients, and could admit community nursing home patients. T. 900. If the census of the Center does not improve, it is possible that it will then broaden its marketing efforts and admit more usual nursing home patients. Id. at p. 23. That has not yet happened, however. The current marketing intent of the Center is to admit only traumatic brain injured patients.
The Center at Manatee Springs is currently not operated as a community nursing home, and is currently not accessible to persons needing conventional community nursing home services.
The statewide licensed nursing home bed to population ratio was 23.18 beds per 1,000 persons as of the summer of 1986. The ratio in District VI is 24.44, and is higher than the statewide ratio. But the ratio in Manatee County is 20.47, lower than both the District and statewide ratios. T. 54. If 120 additional community nursing home beds were added to Manatee County, its ratio would be 22.92, and thus would still be lower than both the District and statewide ratios. Id.
In the planning horizon (the summer of 1988), accounting for both licensed beds and all beds currently approved, the statewide ratio would be 25.46, the District ratio would be 24.86, and the Manatee County ratio would be 19.26, which would increase to 21.56 if 120 additional beds were added to Manatee County. M. Ex. 7; T. 55.
HRS has previously granted a certificate of need for a nursing home where the existing numeric need rule showed little or no need and one licensed nursing home in the county was not generally accessible to conventional nursing home patients due to restrictive admission policies and low occupancy rates. T. 1018, 1032-33. The applicability of this as precedent in the case at bar is clouded by the fact that in that case the local health plan explicitly mentioned the problem, and recommended approval of new beds in that county as the first priority. T. 1030. That circumstance does not exist in this case. Moreover, it is unknown in that case pursuant to the then existing rule whether disregarding the nonaccessible beds resulted in a net numeric need sufficient to justify approval of the certificate of need. See T. 1020.
The vast majority of persons using community nursing home beds in Florida are age 65 or more. Persons younger than 65 years of age using nursing home services in Florida recently constituted 7.36 percent of the total, and
8.25 percent of the total in District VI. T. 992.
Since the 120 licensed community nursing home beds at the Center of Manatee Springs are not available to conventional community nursing home patients in Manatee County, or in District VI, and there is no evidence in this record to conclude that they will be available to such persons in the near future, those 120 beds should be treated as not available for purposes of determining the net bed need in the horizon year.
It should be noted that the 120 beds at the Center of Manatee Springs appears in the numeric need rule only as approved beds, not as licensed beds. Thus, deletion of these beds within the context of the numeric rule would not involve deletion from either LB or LBD, and therefore would not give rise to an opportunity to witness the rather bizarre inverse mathematical relationship in the rule between the number of existing beds and "need." If the 120 approved beds at the Center at Manatee Springs are disregarded in the numeric rule, the following consequences occur:
The 120 approved beds would be subtracted from the 755 approved beds in the District in step 5, concerning the poverty adjustment, but the result would still be more than 27/1000. The result would be 5,905/211,515 = 0.0279. Thus, the poverty adjustment still would not apply.
Ninety percent of the 120 approved beds in the subdistrict would be deleted from the amount to be subtracted in
step 6, resulting a net bed need of 16 beds, instead of a net bed surplus of 92 beds. HRS Ex. 3; T. 880-81.
Sixteen beds would not be sufficient need to
grant any portion of any Petitioner's application. T. 881.
Petitioners argue that the 120 beds at the Center should be disregarded in another way external to the numeric need formula. Mr. Nelson, testifying as an expert for the Petitioners, was of the opinion that the problem of the 120 beds at the Center at Manatee Springs was solely an accessibility issue, and not an issue giving rise to an alteration within the numeric need calculation. T. 81-2. He reasoned that since the Center was presumptively needed at one time (because it was approved for a certificate of need for a community nursing home) but is now in fact not accessible to persons needing it, the 120 beds it represents should be replaced. Id. Mr. Nelson's method has been rejected in the conclusions of law.
There is no need for any portion of any of the projects proposed by any Petitioner.
No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of these cases.
The Petitioners have a substantial interest sufficient to entitle them to a formal administrative hearing.
The Petitioners have the burden of establishing entitlement to the certificates of need sought in their applications. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981).
The applications of the Petitioners are governed by rule 10-5.011(k), the community nursing home bed need rule.
Rule 10-5.011(k)2. provides that ". . . the Department will determine if there is a projected need for new or additional beds 3 years into the future according to the methodology specified under Sub-subparagraphs a.
through j." The correct planning horizon in this case is July, 1988, which is three years from the date the applications were filed. The three year period logically must begin with the date of the batching cycle because that date is the only clear point of origin for the staff of HRS in its free form review of the application. See Manor Care of Hillsborough County v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 1102 (February 5, 1987).
The number of licensed beds (LB and LBD) used in the first part of the numeric rule is expressly defined by rule to be "as of June 1 preceding that cycle." Rule 10-5.011(1)(k)2.g. Thus, the correct statistics for LB and LBD were for June 1, 1985, as used by Mr. Straughn, rather than June 1, 1986, used by Mr. Thornton. Manor Care of Hillsborough County, supra.
"Current" populations (POPC, and POPD) mean populations current at the time of application and batching cycle. Manor Care of Hillsborough County, supra. No party argues that it is incorrect to use July 1, 1985, estimates of July 1, 1985, populations, and thus no opinion is expressed as to the propriety of not using a later estimate of July 1, 1985, populations.
The correct occupancy rate is 94.6%, the rate for the period October, 1984, through March, 1985, immediately preceding the batching cycle. Rule ID- 5.011(k)2.d.; Manor Care of Hillsborough County, supra.
The calculation of need by HRS (HRS Ex. 3) is basically correct, setting aside for the moment the two need issues raised by the Petitioners. That calculation pursuant to the rule shows that subdistrict 2, District VI, will have an excess of 92 community nursing home beds in July, 1988.
The first of the two need issues presented by the Petitioners is whether the poverty adjustment in subparagraph e of the rule should be applied as it literally reads, or as interpreted by Petitioners' expert, Mr. Thornton. Petitioners have asserted that the poverty adjustment of subparagraph e of the rule should be read so as to delete the word "current," to substitute the words "three years into the future," and to redefine POPE to mean the population in the District three years into the future of persons age 65 and over.
The poverty adjustment has two conditions precedent for its applicability. The first condition for the applicability of the poverty adjustment has been met in this case: District VI does have a poverty rate for those 65 and older that exceeds the state average.
At stake, then, is the second condition for the applicability of the poverty adjustment. The second condition depends upon the calculation of (LB + AB)/POPE. The poverty adjustment does not apply unless the result is less than 27/1000.
POPE is defined in the poverty adjustment section of the rule as merely the sum of POPC and POPD. Since POPC and POPD are populations current for the batching cycle, POPE must also be current for the batching cycle. This is apparent for another reason as well. The numerator, LB, is clearly defined by the rule to be as of June 1, 1985. It would make no sense to allow the denominator, POPE, to be derived from some other time. The test is to simply find the ratio of beds to population, and to compare that to the goal of 27/1000. Dividing the number of beds existing in 1985 by the population in 1986 (or some other year) would not produce a coherent ratio because it would fail to account for beds that may have come into existence (approved or licensed) in the year from 1985 to 1986.
Finally, AB as used in the second step to determine the applicability of the poverty adjustment, must also mean as of the same time as LB. It would make no sense to add licensed beds existing in 1985 to approved beds existing in another year to obtain the complete numerator of the fraction. See the preceding paragraph. HRS, however, argues that beds which become licensed after June 1, 1985, but before the supervisor signed the state agency action report (the 120 beds at the Center) are to be counted as approved pursuant to its incipient policy on the subject. A ruling on this point is not needed, however, since the beds at the Center were in an approved status as of June 1, 1985; regardless of which route one takes, they should be counted as approved (AB) for purposes of the poverty adjustment.
The arguments of the Petitioners to construe the poverty adjustment as based upon populations three years into the future, rather than "current" as the rule clearly states, are not persuasive. Discussion of these arguments follows. (Citations to the record in this section are to the expert opinion testimony of Mr. Thornton. These opinions have been rejected as not persuasive and incorrect as a matter of law.)
Subparagraph 2 of the rule, entitled "need methodology," states that the rule "will determine if there is a projected need for new or additional beds
3 years into the future." Petitioners argue that the poverty adjustment, as applied by HRS, does not "project need . . . 3 years into the future." T. 833. This is true, but it is not due to misinterpretation of the poverty adjustment portion of the rule. The poverty adjustment explicitly says that if the first two tests are met, then ". . . the district shall be allocated a total of 27 .
. . beds per thousand residents age 65 and older in the current year." (E.S.) The rule does not say that the 27 beds are to be provided per 1,000 persons who may exist three years into the future. Moreover, the rule uses POPE as the designation of District population, and, as discussed above, POPE is the sum of populations defined earlier in the rule (POPC and POPD) to be "current" populations, not populations in the future. In effect, the rule in its primary operative portion does project need three years into the future, but the rule additionally has a separately articulated adjustment based upon poverty considerations.
Petitioners further note that the last sentence of subparagraph 2 of the rule provides that "[i]n districts with a high proportion of elderly residents living in poverty, the methodology specifies a minimum bed rate." They then argue that if the poverty adjustment is to be 27 beds per 1,000 persons counted as "current" population, the allocation of beds by the poverty adjustment is less than is allocated by the basic method of the rule, and thus is not a "minimum" bed rate. T. 833.
It is true that most Florida Districts are growing in population, and that a poverty adjustment based upon populations in the future would (for such Districts) be greater than it would have been based upon current populations. But the poverty adjustment is no less a "minimum" rate for having as its predicate the populations current at the time of the application: it simply is not as great a minimum rate as it might have been.
Analysis, then, of Petitioners' argument that the poverty adjustment does not provide a "minimum" rate must begin with the given that the poverty
adjustment rate is not based upon horizon year populations. That being the case, there are three circumstances that must be examined to see if the poverty adjustment lives up to the promise that it is a "minimum" rate when, as here, the district has a higher proportion of elderly living in poverty than the statewide average.
The instant case is an example of the first possibility. Here, District VI was examined in step 5 of Mr. Straughn's analysis, HRS Ex. 3, to see if the current number of licensed and approved beds in the District exceeds
27 per 1,000 of current elderly population, with "current" meaning at the time of the application. District VI already had more than 27 beds per 1,000, and thus the minimum rate was not needed because a higher rate already had been achieved.
The second circumstance would be the situation where the District has more elderly living in poverty than the statewide average, and the current (at the time of the application) ratio of beds to population is less than 27/1000, but the net bed need provided by the basic methodology is less than 27 beds per 1,000 persons in the current population. In such an event, the poverty adjustment would be applied and would provide a minimum rate.
The third circumstance would be the same as the second, except that the net bed need provided by the basic methodology is more than 27 beds per 1,000 persons in the current population. In that event, there does not appear to be anything to prevent HRS from construing the poverty adjustment (the minimum of 27 beds per 1,000) to be inapplicable since it would not be needed to provide a minimum bed level.
The second and third circumstances discussed above are not presented by the facts in this record, however, and thus this case does not present an occasion for finally determining those issues.
Petitioners cite Sebesta v. Miklas, 272 So.2d 141 (Fla. 1972) for the proposition that if a law is internally inconsistent, clerical errors should be corrected through judicial interpretation. Also cited is Scenic Hills Utility Co. v. Pensacola, 156 So.2d 874 (Fla. 1st DCA 1963).
The Sebesta case states that a court should, in its construction of a statute, add language only if the intent of the statute is clear on its face, or if the result is facially absurd, or if legislative intent is readily ascertainable by means external to the statute. The Court in the Sebesta case was confronted with a districting statute that omitted the Davis Islands from Hillsborough County. That circumstance is quite different from the rule in the case at bar. As discussed above, the problem with respect to the poverty adjustment rule is not the addition of language, but the substitution of language for language having a clear and quite different meaning: the substitution of "three years into the future" for the word "current" as it relates to population, and the similar redefinition of the term POPE.
The Scenic Hills Utility case is similarly inapplicable. In that case, the Court added the word "exclusive" as a modification of the power to grant a franchise, and did so after lengthy discussion of numerous internal cues. The Court did not substitute the word "exlusive" for the word "non- exclusive," which is effectively what would occur in the case at bar if Petitioners' argument were adopted.
Testimony that some members of the staff at HRS consider the poverty adjustment portion of the rule to be a mistake is of little relevance in this case. The fact is, the rule exists and it is clear on its face. The opinion of one or two staff members might be a reason for HRS to amend the rule, but is irrelevant as long as the rule continues to exist.
Similarly, no conclusions can be drawn from the fact that HRS once proposed to amend the rule regarding the poverty adjustment and then decided not to amend the rule. Such behavior is as consistent with the conclusion that the rule is clear, and that HRS is satisfied with it, as with the conclusion that the rule is unclear or contains an error.
In summary, it follows that Mr. Thornton's calculation of the second part of the test for the applicability of the poverty adjustment in paragraph e of the rule is in error. Rather than being less than 27/1000, the correct result is 0.028 (rounded) as found by Mr. Straughn. Thus, pursuant to subparagraph e of the rule, the poverty adjustment does not apply in this case.
A second major issue concerning need is whether the 120 licensed community nursing home beds at the Center at Manatee Springs should be counted as available to meet the gross need for community nursing home beds in the horizon year, July, 1988.
Section 381.494(6)(c), Fla. Stat., provides that the accessibility of existing facilities is a factor to be considered in determining whether a certificate of need application should be approved.
The bed need rule is based solely upon the need of persons who are age
65 and older, see rule 10-5.011(1)(k). It has been found as a fact that the community nursing home beds at the Center are not accessible to persons age 65 and older. Thus, the 120 licensed community nursing home beds at the Center at Manatee Springs are not accessible to persons who need them in the subdistrict.
Though the 120 beds at the Center are not now accessible, it is a close factual and legal question whether those beds should be considered to be unavailable to fulfill need in July, 1988, in the horizon year. See Balsam v. Department of Health and Rehabilitative Services, et al., 486 So.2d 1341, 1346-
47 (Fla. 1st DCA 1986). Compare Federal Property Management Corporation v. Department of Health and Rehabilitative Services, 482 So.2d 475 (Fla. 1st DCA 1986). The Center has only about 30% of its 120 beds occupied, and out of economic necessity will begin to admit conventional nursing home patients if its census does not improve. See finding of fact 33. It had been open for fifteen months at the time of the hearing, and one might have expected a better census by that time. Still, there is no evidence from which one can determine what a reasonable start up time should be for a facility having the goal of serving traumatic brain injured patients. Moreover, it is very clear from the record that the Center now is steadfast in its resolve to admit only that type of patient, and would continue to so limit its admissions if the program is economically feasible. The preponderance of the evidence favors the conclusion that the Center will still be serving only traumatic brain injured patients in the horizon year, which is July, 1988, and which was only 18 months from the time of the final hearing when this evidence was received. Thus, it must be concluded that the 120 beds at the Center at Manatee Springs should not be counted as available to serve need in July, 1988.
The problem then arises as to the correct method for accounting for the inaccessibility of the 120 beds at the Center.
Petitioners argue that the legally appropriate way to account for the inaccessibility of the Center's 120 beds is not to delete that number of beds in the calculations within the numeric bed need rule. Petitioners argue that need as shown by the numeric bed need rule is irrelevant. Instead, Petitioners assert that such beds should be treated as beds originally needed, now unavailable, still needed in the horizon year, and thus ones that must be replaced in the subdistrict.
The problem with this argument is that there is a numeric need rule in this case which specifically applies to issues of need with respect to the type of bed sought by the Petitioners. Petitioners' argument assumes that licensed but inaccessible beds are still needed in the horizon year without proof of such need. If this were true, an applicant to replace licensed but inaccessible beds would be entitled to a certificate of need without proof of need pursuant to the numeric need rule. But this is contrary to current law. An applicant for a certificate of need must identify need for the beds sought as may exist pursuant to the Department's numeric need rule, if one exists. University Medical Center, Inc. v. Department of Health and Rehabilitative Services, et al., 483 So.2d 712, 716 (Fla. 1st DCA 1986)(on motion for rehearing). See also NME Hospitals, Inc., d/b/a Delray Community Hospital, et al. v. Department of Health and Rehabilitative Services, et al., 492 So.2d 379 (Fla. 1st DCA 1986); Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700 (Fla. 1st DCA 1985). If a numeric need rule exists to provide an estimate of need in the horizon year, it cannot be completely disregarded in favor of secondary methods of determining need.
Admittedly the numeric need rule is only one criterion that must be consulted, and a balanced inquiry must be made of all relevant criteria. Balsam, supra, 486 So.2d at 1349. But the Balsam case does not hold that the numeric need rule can be ignored, for to do so would fly in the face of University Medical Center and Gulf Court and their progeny, supra. All that Balsam holds is that a certificate of need might be granted, even if no need is
shown pursuant to the numeric rule, if there is a "not normal" condition of need in the District, after review of all criteria that may bear on the issue of need. Id. The question of a "not normal" condition of need will be discussed ahead. For the moment, it is sufficient to rule that the question of the inaccessibility of the 120 beds at the Center at Manatee Springs must be considered with respect to all aspects of need, whether numeric rule need, or need based upon any other consideration.
Petitioners further argue that it would not be correct to delete the
120 beds at the Center from the computation of need pursuant to the primary numeric need formula in the rule. Petitioners presented M. Ex. 18, which illustrates that if beds are subtracted from LBD (licensed beds in the subdistrict) or from LB (licensed beds in the District), the need in the subdistrict becomes smaller rather than larger due to the inverse relationship in the rule between existing beds and bed need. The point is not relevant, however, since the 120 beds at the Center were not counted in that part of the formula as licensed beds in the first place. In the calculation of net need, the Center's 120 beds appear as approved beds (AB) only at the end when net bed need is calculated. See finding of fact 40 and subparagraph i of the rule. Thus, an adjustment for the 120 beds at the Center would have no impact in this case upon the initial calculation of the grass subdistrict bed allocation.
As noted earlier, the Center's 120 beds were in an approved status on June 1, 1985. Thus, these beds must be treated as "approved beds" (AB) in any event, and no ruling need be made on the propriety of the Department's policy of determining "approved beds" for purposes of the net bed calculation as of the date that the supervisor signs the state agency action report.
Subtraction of the 120 approved beds at the Center in the calculation pursuant to subparagraph i of the rule, which is the calculation of net bed need, however, would be entirely logical and mathematically appropriate. That subparagraph simply derives net bed need by subtraction of the subdistrict's licensed beds and 90% of the approved beds from the gross subdistrict bed allocation established earlier in the formula. Since the beds at the Center are not available to serve the need identified in the subdistrict bed allocation, it makes good sense not to subtract those approved beds to reach the net bed figure.
However, even if the 120 approved beds at the Center are removed from the last subtraction step of the formula (effectively disregarding 90% of those beds, or 108 beds) the result is a net need of only 16 beds, which is not sufficient to approve any portion of the Petitioners' applications. See finding of fact 40.
Refinement of the above calculation might be in order, but the ultimate conclusion of lack of need would still not change. The net bed formula subtracts only 90% of approved beds, and in this manner appears to already have taken into account the possibility (as here) that approved beds may not become available to persons needing them in the future. The rule having already roughly accounted for the circumstance that exists in the Manatee County subdistrict, it might be proper to not delete any portion of the 120 beds at the Center from the 240 approved beds originally used in the calculation to derive net bed need. If this method were followed, the original calculation of a surplus of 92 beds would be correct. On the other hand, observing that the rule had only diminished the approved bed number by 24 (90% of 240), while the actual diminution of beds has been 120 due to after the fact observation of the experience at the Center, an equally good argument could be made that all 120 beds now should be removed from the calculation, leaving only 108 beds (90% of the remaining 120 approved beds) to be subtracted from the gross subdistrict bed need. If this were done, however, the net bed need would be increased only by
12 beds, to a total of 28 beds needed, still an insufficient number to grant any portion of any of the Petitioners' projects. Neither of these approaches are recommended, but have been discussed only to illustrate that lack of effect upon the ultimate conclusion of a lack of net bed need.
Assuming for the moment that it makes sense to delete the 120 beds at the Center from the tally of approved beds to reach net bed need, it would similarly be logical to delete those approved beds in the poverty adjustment step. When this is done, however, the poverty adjustment still is not applicable because the resultant ratio is more than 27/1000. See finding of fact 40.
Subparagraph 1 of the community nursing home bed rule, like many such rules adopted by HRS, provides that the Department will "not normally" approve an application for community nursing home beds if the approval will cause the number of such beds in the District to exceed the number of beds estimated to be needed by subparagraphs 2, 3, and 4 of the rule.
The Court in the Balsam case, supra, 486 So.2d at 1349, citing Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So. 2d 889, 891 (Fla. 1st DCA 1985), provided further guidance for how an applicant might prove a "not normal" condition of need:
. . . [A]n applicant should have "the opportunity to demonstrate need by showing that existing facilities are unavailable or inaccessible . . . ." (E.S.)
The evidence presented by the Petitioners that the beds at the Center at Manatee Springs are not accessible is the beginning of proof of a "not normal" condition. However, subparagraph 2.j. of the rule provides an explicit procedure for proof of need where the net bed allocation is zero. Proof of lack of access in a general sense, as shown in this case, is not enough.
Subparagraph 2.j. provides in pertinent part that:
. . . [T]he applicant may show that persons using existing and like services are in need of nursing home care but will be unable to access nursing home services currently licensed or approved within the subdistrict. Under this provision, the applicant must demonstrate that those persons with a documented need exceeds the number of licensed unoccupied and currently approved nursing home beds. . . . Patients' need for nursing home care must be documented by the attending physicians' plans of care or orders, assessments performed by staff of the Department of Health and Rehabilitative Services, or equivalent assessments performed by attending physicians indicating need for nursing home care. (E.S.)
There is no evidence of the needs of specific persons for nursing home care, and there is no evidence that specific persons needing nursing home care have been denied access to nursing home services. In particular, there is no evidence of patients' need documented by attending physicians' plans of care or orders, assessments performed by HRS staff, or equivalent assessments performed by attending physicians.
Thus, the record does not have adequate evidence of a "not normal" condition in the District or subdistrict sufficient to warrant approval of the Petitioners' applications.
In summary, there is no need for any portion of the projects proposed by any Petitioner.
For these reasons, it is recommended that the Department of Health and Rehabilitative Services enter its final order denying the applications of Meridian, Inc., Meridian Nursing Centers, Inc., and Manatee Meridian Limited Partnership, Manor Care of Manatee County, and Forum Group, Inc., sponsor of Retirement Living of Manatee County, for certificate of need numbers 4154, 4153, and 4159, respectively.
DONE and ORDERED this 12th day of May, 1987, in Tallahassee, Florida.
WILLIAM C. SHERRILL, JR.
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 1987.
APPENDIX
The following are rulings upon proposed findings of fact which have been rejected in this Recommended Order. The numbers used correspond to the numbers of the findings of fact proposed.
Findings of fact proposed by Meridian Inc.:
Subordinate to primary findings of fact, and not needed.
The second sentence is not relevant.
4. That last sentence is not relevant.
The second sentence is not supported by the record. The witness was testifying to his current census, not historical experience.
Irrelevant.
Irrelevant.
The words "intensely" and "full-time" are not supported by the record cited.
The words "sole purpose" are not supported by the record cite. The witness only testified that its was necessary for that purpose.
Subordinate.
The word "exclusively" is not supported by the record cited.
Cumulative.
Cumulative.
Cumulative and subordinate.
20. An issue of law, not fact.
The words "demographically similar" are not supported by the record cited.
The first sentence and last sentence are rejected because, due to lack of numerical need and lack of other legally relevant evidence of a "not normal" condition, reference to only the bed ratios cited is not a sufficient basis for concluding that it would not be unreasonable to add 120 more beds to Manatee County.
The numeric need rule already accounts for population growth, so this finding of fact is legally irrelevant.
Subordinate.
The second sentence is irrelevant. The third and fourth sentences are issues of law, and have been rejected in the conclusions of law.
The example provided by M. Ex. 18 is not relevant because the 120 beds at the Center at Manatee Springs appear in the numeric need formula as approved beds, not licensed beds.
While this proposed finding of fact is true, it is legally irrelevant since the applicant has the burden of proof of showing a "not normal" condition in Manatee County, and has the burden of proof of showing need for the proposed project.
The third sentence is not relevant because it stops short of the relevant issue: whether the deletion of the Moose Haven Health Center beds resulted in sufficient net bed need to grant the beds to Beverly. It is very probable that the "miniscule amount of numerical need" plus the Moose Haven beds resulted in sufficient net beds to grant Beverly's application.
35-77. No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need.
Findings of fact proposed by Manor Care:
Irrelevant. The fact that the Department published a rule change to calculate the poverty adjustment on populations that are "projected three years into the future," instead of as now in the rule, "current," and stated that the proposed amendment "clarifies" the existing provisions of the rule, and then withdrew the proposed amendment, is too ambiguous to rely upon as argued by the Manor Care. One cannot tell from this whether the Department was carelessly using the word "clarify," as agencies often do in a euphemistic way, or actually thought that the word "current" was unclear. Moreover, the fact that the proposed amendment was withdrawn raises another set of unknowns: whether the Department withdrew the amendment because it had second thoughts and decided the word "current" was clear, or because it affirmatively rejected the adoption of a poverty adjustment as the Petitioners would have it on this record.
Rejected as explained in the last paragraph. The Department does not rely upon its actions with respect to the proposed amendment to the rule as a basis for its decision in this case, and thus does not have to explicate it on this record.
Rejected as more fully explained in the conclusions of law.
11-42. No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need.
Findings of fact proposed by Forum Group:
1-21. No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need.
22-23. The lack of a need calculation in the state agency action report has no relevance to the correctness of the need calculation now offered by HRS.
24. The word "authoritative" must be rejected since the method was not legally correct.
27. Irrelevant since the error was corrected at the formal hearing, and the result of lack of need would not change, in any event.
30. Irrelevant. The prior policy contravened the rule.
34. Irrelevant. Growth in population is already contained in the numeric need rule as a factor.
38-66. No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need.
Findings of fact proposed by HRS:
4-5. Issues of law, not fact.
7. The first sentence is an issue of law, not fact.
The first sentence is an issue of law, not fact.
An issue of law, not fact.
The second sentence is an issue of law, not fact.
No findings of fact have been made with respect to the comparative aspects of the three projects since there is no need. Manor Care has presented evidence concerning its plan to treat Alzheimer's disease patients only in support of the comparative aspects of its project in relation to the projects of the other two applicants. It has not presented such evidence to show need, i.e., evidence that patients having Alzheimer's disease (either specifically or generally) need the services that Manor Care proposes. See proposed findings of fact 14-19 by Manor Care. Thus, it is unnecessary to reach the factual and legal issue raised by HRS as to whether Manor Care may present evidence concerning services to Alzheimer's disease patients.
COPIES FURNISHED:
Robert D. Newell, Jr. Robert D. Newell, Jr., P.A.
102 South Monroe Street Tallahassee, Florida 32301
Donna H. Stinson, Esquire Moyle, Flanigan, Katz
Fitzgerald and Sheehan, P.A. The Perkins House, Suite 100
118 North Gadsden St. Tallahassee, Florida 32301
R. Terry Rigsby, Esquire Moffitt, Hart, Rigsby & Herron, P.A.
215 S. Monroe St.
Suite 800
Tallahassee, Florida 32301
Richard A. Patterson, Esquire Department of Health and Rehabilitative Services
1323 Winewood Blvd. Building One, Room 407
Tallahassee, Florida 32399-0700
John Miller
Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
| Issue Date | Proceedings |
|---|---|
| May 12, 1987 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| May 12, 1987 | Recommended Order | Record does not show evidence of ""not normal"" conditions to warrant approval of application. Final order denied Cert. of Need for #4154,4153 & 4159 resp. |
