Judges: K. N. AYERS
Agency: Agency for Health Care Administration
Latest Update: Aug. 29, 1988
Summary: Where bed need methodology shows no need for additional beds, Certificate Of Need will not be granted absent access problems.
88-1832.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FORUM GROUP INC., Sponsor of )
Retirement Living Of Lee )
County, )
)
Petitioner, )
)
vs. ) CASE No. 88-1832
) CON No. 5449
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) PALMETTO HEALTH SERVICES, INC., )
)
Petitioner, )
)
vs. ) CASE No. 88-1834
) CON No. 5452
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a consolidated hearing in the above-styled cases on July 7 and 8, 1988, at Tallahassee, Florida.
APPEARANCES
For Petitioner R. Terry Rigsby, Esquire Forum Group: 325 John Knox Road
Building C, Suite 135 Tallahassee, Florida 32303
For Petitioner Richard G. Coker, Jr., Esquire Palmetto Health: 100 Northeast 3rd Avenue, Suite 1100
Fort Lauderdale, Florida 33301
For Respondent: Theodore E Mack, Esquire
Department of Health and Rehabilitative Services
2727 Mahan Drive, Room 363
Tallahassee, Florida 32308
By Petition for Formal Hearing dated March 30, 1988, Forum Group, Inc., Sponsor of Retirement Living of Lee County (Forum), Petitioner in Case No. 88- 1832, requested a hearing to contest the denial by the Department of Health and
Rehabilitative Services (DHRS), Respondent, of its application for a Certificate of Need to construct and operate a 60 bed nursing facility in Lee County in conjunction with a proposed retirement community.
By Petition for Formal Administrative Hearing filed April 1, 1988, Palmetto Health Services, Inc. (Palmetto), Petitioner in Case No. 88-1834, by and through its attorney, requested a hearing to challenge DHRS', Respondent, denial of its application to construct and operate a 180 bed nursing facility in Lee County with 120 beds for skilled and intermediate care and a 60 bed facility devoted to serve AIDS patients.
These cases were consolidated with three other applicants for nursing home beds in Lee County filed in the same batch and scheduled to be heard commencing July 5, 1988. Prior to the date scheduled for hearing, the other Petitioners voluntarily dismissed their petitions, and the hearing proceeded on July 6, 1988, with only these two applicants.
By Notice of Voluntary Dismissal dated August 15, 1988, Palmetto Health Services withdrew its request for hearing to challenge the denial of their application for a 180 bed nursing home. By order entered August 18, 1988, it was dismissed in these proceedings.
In the prehearing stipulation filed prior to the commencement of the hearing, the parties stipulated that of the review criteria listed in Section 381.705(1), Florida Statutes, only subparagraphs (a), (b), (c), (1), (n) and that part of (h) pertaining to availability of resources are in dispute in these proceedings. At the hearing, Respondent stipulated that both Petitioners met all criteria for the issuance of the certificates requested, except for bed need in the service area (Lee County) or special circumstances in the service area demonstrating need despite the lack of need pursuant to the appropriate bed need rule. With the withdrawal of Palmetto, there is no longer a need to compare the applicants if a need is found to exist.
At the hearing, Forum called three witnesses, Palmetto called one witness, DHRS called one witness and 10 exhibits were admitted into evidence. Proposed findings have been submitted. Treatment accorded those proposed findings is contained in the Appendix attached hereto and made a part hereof.
FINDINGS OF FACT
Forum is a national corporation which owns and operates 16 retirement projects in the United States. These projects generally consist of a complex, including apartments for retirement couples, an adult congregate living facility, a nursing home and accessory facilities to provide meals, laundry and other housekeeping requirements. The same type project is proposed in this application to be built in Lee County, Florida, with the 60 bed nursing home the essential ingredient of the complex requiring prior approval before construction. Such projects offer many advantages for elderly people. The proposed nursing facility would be open to the public as well as to members of retirement living.
Pursuant to the bed need formula found in Rule 10- 5.011(1)(k), Florida Administrative Code, the "fixed need pool" when calculated identifies a need for no new beds in the Lee County subdistrict of (District VIII) in the July 1990 planning horizon.
Lee County is an appropriate subdistrict in District VIII and is so identified in the District VIII Health Plan.
There were 1056 licensed community nursing home beds in Lee County on August 1, 1987, the cutoff date used for determining bed need for the applications submitted in the batching cycle for development and operation in the July 1990 planning horizon. There were also 342 approved, but not licensed beds, in Lee County on August 1, 1987. Including these bed with the licensed beds and calculating bed need in Lee County for the July 1990 horizon shows no need for additional beds.
To justify need for additional beds, Forum used a different number as approved beds than was used by DHRS in determining no additional beds are needed in the July 1990 planning horizon. Specifically, Forum challenged CON 4748 issued to Careage for 120 beds contending that zero beds should have been used because no CON for 120 beds was ever issued, and the CON for 60 beds was not published until September 4, 1987, after the August 1, 1987, cutoff date for this batch.
The January 23, 1987, issue of Florida Administrative Weekly published the issuance of CON 4748 to Careage Southwest Healthcare Center for a new 120 bed skilled and intermediate care facility in Lee County. Due to changes in personnel at DHRS at this time, this CON was not processed promptly, and Forum Group, among others, filed a petition for hearing to challenge the CON (Exhibit No. 18). Prior to the issuance of CON 4748 to Careage, DHRS discovered that on initial processing of CON 4748, only 60 of the 120 beds requested had been approved, and 60 beds had been denied. This error was not corrected until the publication of Florida Administration Weekly on September 4, 1987, where CON 4748 was corrected to show 60 beds issued to Careage. However, prior to August 1, 1987, Careage was notified that DHRS intended to award it 60 nursing home, beds.
A good argument can be made for Forum's position that the notice that
120 beds had been awarded to Careage was a clear error which would ultimately be corrected. If that premise is accepted, it must also be accepted that 60 beds were approved for Careage. Reducing the number of approved beds as of August 1, 1987, by 60 and using the calculations for determining the District Projected Bed Need (A) Table III, Exhibit No. 9, to calculate the SA (Subdistrict Allocation) shows the following:
SA = A x LBD (Subdistrict Beds) x (OR (Subdistrict Occupancy Rate) LB (District Licensed Beds) .9
or
SA = 5650.9 x 1056 x .9347 = 1286.57
4817 .9
Beds Available = LBD + (.9 x Subdistrict Approved Beds (282)
= 1056 + 238 = 1308.8
Subtracting this from SA shows approximately 23 beds needed.
Under the fixed pool rule, DHRS will not, for any reason, alter the published fixed pool inventory unless an error is brought to its attention during a grace period that will allow DHRS to notify interested parties through publication. Any errors not corrected in the grace period will be corrected in the next fixed pool batching cycle.
The grace period is triggered by a letter of intent which extends the filing deadlines for competitive letters of Intent. Correcting fixed pool errors during the grace period allows other applicants to compete for the same pool of beds. Correcting errors after this grace period would not give prospective applicants adequate notice of the need, and they would be unable to timely compete in the batch. Because no errors were brought to the attention of DHRS that could have been corrected within the grace period, DHRS could not make any changes to its published fixed pool need for Lee County.
Forum also reduced 30 beds from those approved for construction by Beverly Enterprises in Lee County in CONS 1991 and 1992. CONS 1991 and 1992 were issued December 5, 1986, to Beverly Enterprises and authorized the construction of a 90 bed nursing facility and a 60 bed nursing facility in Lee County. Both of the CONS were in effect on August 1, 1987, the cutoff date for counting approved beds for use in the bed need rule formula. Subsequent to August 1, 1987, Beverly completed construction on a 120 bed nursing facility, and a CON was issued for 120 beds, CON 1992 (for 60 beds) was rescinded and 30 beds were reallocated. On August 1, 1987, all 150 of these beds were approved beds.
DHRS defines approved beds to include those applications that have received CON approval either by issuance of a CON, letter of intent to issue a CON, and where a written settlement agreement has been entered to grant a CON to a certain applicant or applicants. DHRS also considers publication of intent to grant or granting a CON as tantamount to issuing a CON or letter of intent to issue.
But for the issue of need, Forum met all statutory requirements for the issuance of the requested CON.
Absent a need for the requested beds, granting the 60 beds requested by Forum would adversely affect existing providers and would not be economically feasible.
No evidence was submitted that special circumstances exist in Lee County which would justify the granting of a CON to Forum despite the lack of need under the appropriate bed need rule.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and subject matter of, these proceedings.
With Palmetto withdrawing from these proceedings, the only issue remaining is whether there is a need for the 60 bed facility proposed by Forum. If need exists, the project will be financially feasible and will not adversely affect existing providers.
This is the first nursing home CON hearing under the fixed need pool rule, Section 10-5.008, Florida Administrative Code. This Section provides in subparagraph (2)(a) in pertinent part:
These batching cycles specific fixed need pools shall not be changed or adjusted in the future regardless of any future changes in need methodologies, population estimates,
bed inventories, or other factors which would
lead to different projections of need if retroactively applied.
It is the bed inventory of approved, but not licensed, beds that Forum is attempting to challenge. This is clearly a "bed inventory" and, pursuant to the rule above-quoted, not subject to challenge.
Forum contends that the only beds that should be counted as approved beds are those for which Respondent had issued a CON. Until recently, in each batch of applications review by DHRS in which a need for beds was found to exist, DHRS issued CONS to those applicants deemed best qualified to meet the need. If other applicants challenged the issuance of those CONS within the time period allowed for challenge, those CONS did not become final until the administrative hearing process was complete. Recently DHRS changed its policy to one where a notice of intent to issue a CON to the successful applicant is published. If no one protests this notice of intent to issue within the 30 day period following publication of this notice, a final order is entered granting the CON in accordance with the letter of intent. Forum's contention that the beds contained in such a CON should be counted when the earlier procedure was followed but not when the latter procedure is followed is without merit. Since no agency action can be final until those with a right to challenge such action have been afforded an opportunity to do so, the notice of intent to issue a CON has exactly the same affect as did the DHRS earlier practice to issue a CON which could not become final until completion of the administrative hearing process.
On January 23, 1987, DHRS published a notice in the Florida Administrative Weekly that a CON for a new 120 bed skilled and intermediate care nursing home in Lee County was issued to Careage although the actual letter awarding these beds had not been signed due to an administrative mix-up. These
120 beds were properly counted as approved beds by DHRS under Rule 10- 5.008(2)(a), Florida Administrative Code, above quoted, even though a clear error had been made.
With respect to the 90 bed and 60 bed CONS issued to Beverly Enterprises, both of those CONS were in effect on August 1, 1987, and were properly counted as approved beds.
From the foregoing, it is concluded that no need exists for additional nursing home beds in Lee County for the July 1990 planning horizon, and special circumstances do not exist which would justify the granting of beds apart from the bed need rule. It is, therefore:
Recommended that the application of Forum Group to construct a 60 bed nursing facility in Lee County be denied.
Entered this 29th day of August, 1988, in Tallahassee, Florida.
K. N. AYERS Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 29th day of August, 1988.
APPENDIX TO RECOMMENDED ORDER, CASE NOs. 88-1832, 88-1834
Treatment Accorded Forum Proposed Findings 1-3. Included in preamble.
4-15. Accepted. Calculation of need was not made an issue by any party.
Accepted. However, DHRS has for some period of time used the same definition for approved beds used in these proceedings.
Included in H.O. #5. 18-20. Accepted.
Included in H.O. #6.
Accepted insofar as included in H.O. #6.
Included in H.O. #6.
Rejected.
Included in H.O. #10. 26-27. Rejected as immaterial.
Rejected.
Accepted.
Included in H.O. #1.
Included in prehearing stipulation.
Included in prehearing stipulation.
Included in H.O. #7.
34-36. Accepted, but not material to conclusions reached.
Rejected.
Accepted, but not material to conclusions reached.
Rejected.
Accepted.
Included in H.O. #12. 42-44. Included in H.O. #12
45-53. Accepted as unrebutted testimony, but immaterial as no comparative review of applicants is required.
54. Included in H.O. #12. 55-63. Rejected as immaterial.
64-83. Rejected as immaterial after Palmetto withdrew.
Treatment Accorded DHRS Proposed Findings
Included in H.O. #1.
Not relevant after Palmetto withdrew.
Included in preamble.
Included in H.O. #3. 5-6. Included in H.O. #4.
Included in H.O. #14.
Accepted, but not material to results reached. 9-10. Included in H.O. #10.
11-14. Included in H.O. #6.
Included in H.O. #8.
Included in H.O. #9.
Rejected as immaterial.
Included H.O. #9.
Rejected insofar as inconsistent with H.O. #7. 20-24. Rejected as immaterial after Palmetto withdrew.
COPIES FURNISHED:
R. Terry Rigsby, Esquire
325 John Knox Road Building C, Suite 135
Tallahassee, Florida 32303
Richard G. Coker, Jr., Esquire
100 Northeast 3rd Avenue Suite 1100
Fort Lauderdale, Florida 33301
Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive, Room 363
Tallahassee, Florida 32308
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
John Miller
Acting General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
Sam Power Clerk
Department of Health and Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
================================================================= ORDER CORRECTING RECOMMENDED ORDER
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FORUM GROUP INC., Sponsor of )
Retirement Living Of Lee )
County, )
)
Petitioner, )
)
vs. ) CASE No. 88-1832
) CON No. 5449
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) PALMETTO HEALTH SERVICES, INC., )
)
Petitioner, )
)
vs. ) CASE No. 88-1834
) CON No. 5452
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
ORDER
The RECOMMENDED ORDER entered August 29, 1988 contained an error on page 6 thereof. Subtracting beds available (1308.8) from the subdistrict allocation (1286.57) shows a surplus of existing beds over the subdistrict allocation.
Accordingly, the ultimate sentence in finding 7 is incorrect in saying "23 beds needed" when the phrase should be "23 beds surplus."
The Recommended Order should be corrected to reflect this change.
DONE and ORDERED this 2nd day of September, 1988, in Tallahassee, Florida.
K. N. AYERS Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1988.
COPIES FURNISHED:
R. Terry Rigsby, Esquire
325 John Knox Road Building C, Suite 135
Tallahassee, Florida 32303
Richard G. Coker, Jr., Esquire
100 Northeast 3rd Avenue Suite 1100
Fort Lauderdale, Florida 33301
Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive, Room 363
Tallahassee, Florida 32308
R. S. Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Blvd.
Tallahassee, Florida 32399-0700
Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd.
Tallahassee, Florida 32399-0700
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
FORUM GROUP, INC., Sponsor of Retirement Living of Lee County,
Petitioner, CASE NO.: 88-1832 CON NO.: 5449
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
PALMETTO HEALTH SERVICES, INC.,
Petitioner, CASE NO. : 88-1834 CON NO.: 5452
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above- styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services (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 as corrected by the attached Order of K.
N. Ayers dated September 2, 1988
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 Forum's application for certificate of need number 5449 and Palmettos application for certificate of need number 5452 are DENIED.
DONE and ORDERED this 19th day September of 1988, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
by Assistant Secretary for Programs
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
Terry Rigsby, Esquire RIGS BY & HOLDER
325 John Knox Road Suite C135
Tallahassee, Florida 32303
K. N. Ayers Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
Richard G. Coker, Jr., Esquire
100 Northeast 3rd Avenue Suite 1100
Fort Lauderdale, Florida 33301
Theodore Mack, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
FALR
Post Office Box 385 Gainesville, Florida 32602
Juanita Powell (PDDR)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 22nd day of September, 1988.
R. S. Power, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407
Tallahassee, Florida 32399-0700 904/488-2381
Docket for Case No: 88-001832
Orders for Case No: 88-001832
| Issue Date |
Document |
Summary |
|
Sep. 19, 1988 |
Agency Final Order
|
|
|
Aug. 29, 1988 |
Recommended Order
|
Where bed need methodology shows no need for additional beds, Certificate Of Need will not be granted absent access problems.
|
