STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS
HEALTH QUEST MANAGEMENT )
CORPORATION III, )
)
Petitioner, )
)
vs. ) CASE NO. 89-2502
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES and )
WHITEHALL BOCA, AN ILLINOIS )
LIMITED PARTNERSHIP, )
)
Respondents. )
) MANOR CARE OF BOCA RATON, INC. ) d/b/a MANOR CARE OF BOCA RATON, )
)
Petitioner, )
)
vs. ) CASE NO. 89-2504
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES and ) VARI-CARE, INC. d/b/a BOULEVARD ) MANOR NURSING CENTER, )
)
Respondents. )
) MANOR CARE OF BOCA RATON, ) INC. d/b/a MANOR CARE OF BOCA ) RATON, )
)
Petitioner, )
)
vs. ) CASE NO. 89-2505
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
) MANOR CARE OF BOCA RATON, INC. ) d/b/a MANOR CARE OF BOCA RATON, )
)
Petitioner, )
)
vs. ) CASE NO. 89-2506
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES and )
WHITEHALL BOCA, AN ILLINOIS ) LIMITED PARTNERSHIP QUALIFIED )
TO DO BUSINESS IN FLORIDA, )
)
Respondents. )
) MAPLE LEAF OF PALM BEACH COUNTY ) HEALTH CARE, INC., )
)
Petitioner, )
)
vs. ) CASE NO 89-2507
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES; ) VARI-CARE, INC.; and WHITEHALL ) BOCA, AN ILLINOIS LIMITED )
PARTNERSHIP, )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on September 5-14, 1989, in Tallahassee, Florida.
APPEARANCES
Petitioner Maple Leaf of Alfred W. Clark, Esquire Palm Beach County Health Post Office Box 623
Care, Inc.: Tallahassee, Florida 32302
Petitioner Manor Care James C. Hauser, Esquire of Boca Raton, Inc.: Messer, Vickers, Caparello
French & Madsen, P.A. Post Office Box 1876
Tallahassee, Florida 32302
Petitioner Health Quest Steven W. Huss, Esquire Management Corporation 1017 Thomasville Road III Suite C
Tallahassee, Florida 32303
Respondent Whitehall Byron B. Mathews, Esquire Boca, an Illinois Paul Shelowitz, Esquire Limited Partnership: 700 Brickell Avenue
Miami, Florida 33131
Respondent Vari-Care, Samuel J. Dubbin, Esquire Inc., d/b/a Boulevard Gerald M. Cohen, Esquire Manor Nursing Center: STEEL HECTOR & DAVIS
4000 S.E. Financial Center Miami, Florida 33131-2398
Respondent Department Richard Patterson, Esquire of Health and Department of Health and Rehabilitative Services: Rehabilitative Services
2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
STATEMENT OF THE ISSUES
Which of the applications for certificates of need for community nursing home beds for the Palm Beach County July, 1991, planning horizon filed by Whitehall Boca, an Illinois limited partnership; Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton; Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center; and Maple Leaf of Palm Beach County Health Care, Inc., should be granted, if any?
PRELIMINARY STATEMENT
Respondent Whitehall Boca, an Illinois limited partnership; Petitioner Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton; Respondent Vari- Care, Inc. d/b/a Boulevard Manor Nursing Center; and Petitioner Maple Leaf of Palm Beach County Health Care, Inc., each filed with Respondent Department of Health and Rehabilitative Services an application for a certificate of need for additional community nursing home beds for the July, 1991, planning horizon for Palm Beach County, a sub-district of the Department's planning District IX. After reviewing those applications, the Department issued its report containing its preliminary determinations to grant the applications of Whitehall Boca and Vari-Care Inc., and to deny the applications of Manor Care of Boca Raton, Inc., and Maple Leaf of Palm Beach County Health Care, Inc. Petitions for formal hearing were filed by Health Quest Management Corporation III, an existing provider in Palm Beach County, and by Manor Care of Boca Raton, Inc., and Maple Leaf of Palm Beach County Health Care, Inc., challenging the Department's preliminary determinations. Those petitions were transmitted by the Department to the Division of Administrative Hearings for the conduct of a formal comparative hearing to determine which, if any, of the applications should be approved, and the individual cases were subsequently consolidated.
The parties entered into a Prehearing Stipulation that the letters of intent, CON applications and statutory publication requirements had been filed and met in a timely manner and that the architectural and spatial design proposed by each applicant is reasonable and meets minimum Florida licensure standards. All parties except Health Quest also stipulated chat each applicant has sufficient financial resources to accomplish its project and that each applicant can recruit the necessary health manpower and management personnel to accomplish its project. All parties except Health Quest stipulated that the criteria contained in Section 381.705(1)(d), (f), the first clause in (h), immediate financial feasibility in (i), (j), (k), and (m) and 381.705(2)(c), Florida Statutes, are not in dispute in this proceeding.
The statutory criteria which remain at issue among the applicants and HRS are those contained in Section 381.705(1)(a), (b), (c), (e), (g), all of (h) except the first clause, long-term financial feasibility in (i), (1), and (n). Health Quest reserved the right to contest the compliance of those applications concerning which it has standing with the criteria found in Section 381.705(1)(h), (i), and Section 381.705(2)(a), (b), (d), and (e), Florida Statutes. Further, the Department and Vari-Care, Inc., did not clearly stipulate that Section 381.705(2)(a), (b), (d), and (e), Florida Statutes, were
not in dispute. Lastly, each applicant reserved its right to prove that its application is superior to those of the other applicants.
The parties stipulated that the following issues remained to be litigated: Whether the applications meet the applicable and disputed criteria set forth in Section 381.705, Florida Statutes, and Rule 10-5.011(1)(k), Florida Administrative Code; whether Health Quest has standing to participate as a party; the numeric need for nursing home beds in Palm Beach County for the applicable planning horizon; whether the Department's scoring mechanism is valid and reasonable and, if so, whether the Department properly applied its scoring mechanism to these applications; and which of the four applications is superior.
During final hearing, Maple Leaf and Health Quest stipulated that Maple Leaf's proposal to add 30 beds to its approved nursing home in the Jupiter area of northern Palm Beach County will have no substantial impact on the existing programs at the Health Quest facility located in Boca Raton in southern Palm Beach County and that Maple Leaf nursing home and the Health Quest nursing home will not be competing facilities. Maple Leaf's motion to limit the evidence elicited by Health Quest to those parties concerning whom Health Quest has standing was granted. HCR (Maple Leaf's) Motion for Determination of (Health Quest's) Participation in this Proceeding for an Improper Purpose was withdrawn during final hearing. Additionally, Health Quest stipulated during final hearing that it bad no standing to challenge the application of Vari-Care, in addition to that of Maple Leaf (HCR).
Respondent Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center presented the testimony of Ann Wood, Robert A. Beiseigel, Vincent Di Stefano, D. Wendell Hall, and Gail Buck. Additionally, Vari-Care's Exhibits numbered 1-4 and 16 were admitted in evidence.
Petitioner Maple Leaf of Palm Beach County Health Care, Inc. (HCR) presented the testimony of Milo Bishop, Gail Buck, Paul G. Sieben, and Brenda Kennedy. Additionally, Maple Leaf's Exhibits numbered 1A, 1B-8 and 10-12 were admitted in evidence.
Petitioner Manor Care of Boca Raton, Inc. presented the testimony of Joseph Schmitt, Regina Roberson, James A. MacCutcheon, Karen L. Caldwell, and Rachelle Walter. Additionally, Manor Care's Exhibits numbered 1-7, 9, 10, 12, 13, 17, and 18 were admitted in evidence.
Respondent Department of Health and Rehabilitative Services presented the testimony of Paul David Swartz, Sharon Gordon-Girvin, and Amy M. Jones.
Additionally, the Department's Exhibits numbered 1-3 were admitted in evidence.
Respondent Whitehall Boca, an Illinois limited partnership qualified to do business in Florida, presented the testimony of Steve Mulder, Perry Goldberg, Gilda Osborn, Gene Nelson, and Stephen Sussholz. Additionally, Whitehall Boca's Exhibits numbered 1-6 and 10 were admitted in evidence.
Petitioner Health Quest Management Corporation III presented the testimony of Laura Mamelson, Kevin Krisher, and Amy M. Jones. Additionally, Health Quest's Exhibit numbered 1 was admitted in evidence.
All parties submitted post hearing proposed findings of fact in the form of proposed recommended orders. A ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.
FINDINGS OF FACT
In November, 1988, the applicants in this proceeding filed applications for certificates of need for nursing home beds in District IX, subdistrict 4 (Palm Beach County) for the July, 1991, planning horizon.
The Department of Health and Rehabilitative Services (hereinafter "HRS") published a fixed need pool applicable to this batching cycle of 62 additional nursing home beds for Palm Beach County.
Maple Leaf of Palm Beach County Health Care, Inc., a wholly-owned subsidiary of Health Care and Retirement Corporation of America (hereinafter "HCR") proposes to add 30 nursing home beds to its approved 90-bed nursing home to be located in the Jupiter area of northern Palm Beach County. HCR's 30-bed addition would be accomplished by construction of a new 20-bed wing and the conversion of 10 private rooms to semi-private rooms.
HCR will license and operate its nursing home through Maple Leaf of Palm Beach County Health Care, Inc., a corporation wholly-owned by HCR and established expressly for the development of this project. There is no operational difference between Maple Leaf of Palm Beach County Health Care, Inc., and HCR. HCR has been in the business of developing and operating nursing homes for over 25 years and operates 130 facilities with 16,000 nursing home beds in 19 states. In Florida, HCR operates 10 nursing homes and has several additional facilities under development.
The 90-bed approved nursing home to which HCR seeks to add 30 beds will offer extensive rehabilitation, subacute care, high tech services and a 20-bed special care unit for Alzheimer's Disease and dementia victims. HCR's application for the 30-bed addition does not propose any additional special programs, but the rehabilitative and restorative care capability of the nursing home will be available to the patients admitted to the 30 additional beds.
The new construction proposed by HCR consists of a sixth 20-bed wing (pod) added to the nursing home. Upon completion, the 120-bed nursing home will consist of 46,000 square feet with six individual resident pods and a central core area for administrative and support services. Each pod consists of 20 beds, and three pods comprise one nursing unit. One nursing unit is located on each end of the nursing home. Each three-pod unit has its own dining and activities areas. It will not be necessary to construct any additional support services for the proposed 30-bed addition.
The pod design proposed by HCR provides unique and innovative benefits to the residents of the nursing home. The pod design breaks down the traditional institutional corridor design into smaller, residential-like increments. Instead of long corridors with rooms on each side, living areas are constructed in 20-bed increments (pods) clustered around a home-like living area or atrium located in the center of the pod. Each atrium is intended to have an identity of its own, such as a sitting area, activity area, library, living room, or game room. The pod design is much more residential in character than the traditional nursing home.
HCR nursing homes, including this 30-bed addition, incorporate design elements necessary for both skilled nursing care and subacute care. The 30-bed addition proposed by HCR will meet subacute care standards. Vari-Care, Inc. d/b/a Boulevard Manor Nursing Center (hereinafter "Vari-Care or Boulevard") suggests than its design is superior because it proposes to provide piped-in
oxygen to rooms designated for subacute care. However, there is no requirement for oxygen supplies to be built into a room in order to provide subacute care. In today's technology, equipment for oxygen is brought into the room. HCR's allocation of equipment costs for this addition include equipment for the provision of subacute care.
The project cost for the 30-bed addition proposed by HCR is $706,000 or
$23,533 per bed. The total project cost for the approved 90 beds would be
$3,865,000, or $42,944 per bed. Combining the 90- and 30-bed projects results in a total project cost of $4,571,000, or $38,092 per bed. Economies of scale make HCR's 120-bed nursing home more cost effective than construction of only the 90-bed nursing home. Purchase of additional land is not required for the HCR addition. HCR's total project costs for its 30-bed addition and for its resulting 120-bed facility are lower than those of any competing applicant.
HCR enjoys economies of scale in its purchase of equipment for nursing homes because of the number of projects that it has under development at any given time and because of the national contracts which it has with material and equipment suppliers. HCR's volume purchasing allows HCR to obtain substantial discounts which, in turn, allows HCR to provide higher quality furnishings and equipment at competitive prices.
HCR projects a second year utilization of 93.1% for the 30 additional beds, comprised of 42% Medicaid patients, 10% Medicare patients and 48% private pay and insurance patients. The 90-bed approval has a Certificate of Need (hereinafter "CON") condition which requires a minimum 33% Medicaid payor mix. The overall Medicaid payor mix at the 120-bed nursing home is projected to be 35%. All of the beds including the added beds at the HCR nursing home will be certified to serve Medicaid patients. HCR's most recent history of service to Medicaid patients is 59.4% companywide, which includes a range of 26.7% to 90.4% in Florida facilities. HCR will be able to fulfill its commitment to Medicaid patients in the addition. HCR intends to meet any conditions which include a requirement of 42% Medicaid utilization in the 30 added beds. HCR's utilization projections are reasonable.
The HCR nursing home will be accessible to all residents of the service district.
HCR proposes the following patient charges for 1992: private room,
$101.66; semi-private room, $87.17; Medicaid, $83; and Medicare, $86. HCR's patient charges for 1992, the only year for which each applicant submitted charges, are lower than any competing applicant's charges.
In determining the financial feasibility of this 30-bed project, HCR took into consideration financial feasibility of the approved 90-bed nursing home as well as the financial feasibility of the total 120-bed project. The 30- bed addition proposed by HCR as well as the resulting 120-bed nursing home are financially feasible.
HCR has never had a nursing home license denied, revoked, or suspended and has never had a nursing home placed into receivership. HCR has never experienced a condition in one of its nursing homes which threatened or resulted in direct significant harm to any of its residents.
At the time of hearing, HCR operated four nursing homes in Florida which had superior ratings, including one nursing home which, though continuing to be operated by HCR, underwent a technical change of ownership and thus became
ineligible for a superior rating. HCR also operates nursing homes in West Virginia, which has a licensure rating system similar to that of Florida's. In West Virginia, all of HCR's nursing homes have licensure ratings comparable to Florida's superior rating.
HCR adheres to extensive quality assurance (hereinafter "QA") standards which are based upon, and in some instances more stringent than, state and federal regulations. The purpose of the QA standards is to ensure the highest possible quality care for the residents of the nursing home. HCR utilizes a multi-tiered system to monitor compliance with the QA standards.
Each nursing home performs quarterly a quality assurance audit to determine its compliance with the quality assurance standards. From the regional level, HCR provides professional services consultants, typically registered nurses or registered dieticians, who serve as problem solvers and trouble shooters for facilities within their region and typically visit each facility at least once a month. These professional consultants, who are employees of HCR, act as support for the nursing homes within their region, working with directors of nursing, administrators, registered dieticians, and the department heads in the individual nursing homes to ensure compliance with QA standards and monitor the quality of care provided in the nursing homes. Each HCR nursing home is subjected to an annual QA audit performed pursuant to a contract by an independent, outside organization. After the annual survey, the nursing home is provided with a written report and is required to submit a written plan of correction for any identified deficiencies. Implementation of the plans of correction and ongoing compliance with the QA program are monitored by the professional services consultants and management.
HCR utilizes a formalized acuity program which provides for a total assessment and evaluation of each resident to determine the level of care needed for each resident. After admission, the required level of care may change. It is common for the condition of a nursing home resident to change during the nursing home stay. HCR's formalized acuity program takes into account these changes in condition and allows the nursing home to provide the level of staffing appropriate to the level of care required by each resident.
The staffing proposed by HCR exceeds state requirements. There will be 13.6 total FTE RN, LPN, and nurse aide staff for the 30-bed addition, organized with 6.126 FTE staff on the first shift, 4.374 on the second shift, and 3.1 on the third shift. This is equivalent to a total staff per resident ratio for the 30 additional beds of .493, and a shift staff per bed ratio for the three shifts of .20, .15, and .10, respectively. HCR's 120-bed nursing home will have 78.4 total FTE RN, LPN, and nurse aide staff, or .653 total nursing staff per resident. The shift staffing in the 120-bed HCR nursing home will consist of 35 FTE for the first shift, 25.2 for the second, and 18.2 for the third, which is equivalent to a shift staff per bed ratio of .29, .21, and .15, respectively. The level of staffing proposed by HCR will enable HCR to provide high quality patient care. The staffing proposed by HCR in its 30-bed addition is higher than any competing applicant except Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton (hereinafter "Manor Care") and the staffing for HCR's 120-bed facility is the highest of any of the applicants.
Vari-Care sought to demonstrate that its design of providing showers in each resident's room was superior. There are safety concerns relating to providing showers in each patient room. Residents receiving skilled and subacute care usually have to be assisted in and out of tubs or showers. Most residents in the HCR nursing home will not be able to enter or bathe unassisted in a shower or tub. Although it is possible for some patients to be rolled into
showers in wheel chairs, baths are superior to showers for increasing circulation and preventing decubitus (skin breakdown). Each HCR nursing unit provides a central bathing unit each for males and for females. Central tubs and showers are easier for disabled residents because of the availability of hydraulic lifting devices to assist the residents in and out of the tubs and showers. There are no hydraulic lifting devices in individual rooms. HCR's QA standards establish procedures for protecting patient privacy and patient dignity during times of bathing, and HCR always uses privacy curtains and individual showers for men and women.
HCR and each other applicant provided a description of their plans for various operational details of their proposed nursing homes, including plans for recruitment, career ladders, preadmission screening, appropriateness review, discharge planning, utilization review, QA programs and procedures, specialized programs, resident surveys, residents' councils, security and protection of residents' property, dietary services, linkage with local providers, activity coordination, spiritual development, mental health services, restorative and normalizing activities, quality of life enhancements, training-related plans for staff development and improvement of staff skills, and the availability of the facility for training programs. Compliance with these plans and procedures is important in providing high quality of care to nursing home residents. The plans and procedures described in the HCR application are appropriate.
Nursing home beds in Palm Beach County are clustered into three distinct areas: the northern area near Jupiter, the middle area near West Palm Beach and Boynton Beach, and the southern area near Boca Raton and Delray Beach. The social and economic environments of these areas and the highway support system suggest the reasonableness of these divisions, although the Local Health Council has not subdivided Palm Beach County into these three areas for formal health planning purposes. At the time of hearing, there were eight approved nursing home projects with 584 new nursing home beds under development in Palm Beach County: 210 of these approved beds were to be located in southern Palm Beach County; 284 beds were to be located in the mid-Palm Beach County area; and
90 beds were to be located in the northern Palm Beach County area. The only new nursing home in the northern Palm Beach County area is the HCR nursing home.
HCR will be located in one of the least affluent sections of Palm Beach County. The HCR nursing home will enhance competition in the service area, because it is the only new nursing home to be located in the northern Palm Beach County area and the quality of services to be offered by HCR will challenge existing facilities to enhance their quality of care.
Whitehall Boca, an Illinois limited partnership (hereinafter "Whitehall") is an existing, combined ACLF and nursing home located in Boca Raton in southern Palm Beach County. Whitehall is licensed for 73 skilled nursing beds and 115 ACLF beds. However, because Whitehall has converted some semi-private ACLF rooms to private rooms, its effective ACLF capacity is 62. Whitehall proposes to convert 27 ACLF beds to nursing home beds. Whitehall's expressed purpose for the conversion is to meet the demand for nursing home beds from some of their existing ACLF residents.
Structurally, the facility is two-stories and consists of two "V"- shaped wings on each floor. Three of the four wings have identical floor plans. The other wing consists of laundry, kitchen, and mechanical facilities, and nine semi-private ACLF resident rooms. The three identical wings each contain 28 resident rooms, two community tubs, and two showers. One of these wings is currently used for ACLF residents only, another is exclusively designated for skilled nursing, and the third wing is divided between 14 ACLF rooms and 14
skilled nursing rooms. Whitehall proposes to convert the 25 ACLF beds located in these 14 rooms of this third wing to 24 skilled nursing beds. Additionally, three existing skilled nursing rooms located on the first floor will be converted from private to semi-private rooms. In total, the conversion will result in Whitehall's nursing home beds increasing from 73 to 100, configured in
12 private and 44 semi-private bed, rooms. This conversion can be accomplished without construction or additional equipment and would involve only $70,000 in new expenditures (representing attorneys' and consultants fees).
During the three years prior to filing its CON application, and as long as it has been eligible, Whitehall has received superior licensure ratings.
Whitehall directs its marketing so as to attract residents from outside Palm Beach County and from outside the State of Florida. The visibility that this marketing provides Whitehall makes it better able than its competitors to fill the new beds to be awarded in this proceeding, but makes it less likely that any approved additional nursing home beds would be available to residents of Palm Beach County. Therefore, granting Whitehall's CON application could result in the need for new beds in Palm Beach County remaining unsatisfied.
To foster career advancement, Whitehall pays 100% tuition for courses of study that relate directly to its employees' jobs. Whitehall also pays 50% tuition for any course of study an employee pursues that does not pertain to their position at Whitehall.
Whitehall Boca contracts with Professional Medical Review, a quality assurance review organization. Whitehall Boca's procedure for quality assurance is that Whitehall's Director of Nursing provides to Professional Medical Review data which quantifies the quality of care that is provided at Whitehall. Professional Medical Review then assembles the data and, with guidelines established by that organization, provides Whitehall with its analysis of that data. With that data, Whitehall plans a method of correction.
In addition, Whitehall performs its own in-house, day-to-day quality assurance. This level of quality assurance involves documentation of the quality of patient care, infection control, and safety.
Because incoming residents may have difficulty adapting to the nursing home setting, Whitehall has created the "newcomers" Sunshine Group to assist in this transition. If further assistance in the transition process is necessary, Whitehall refers the resident to specialized counseling.
Whitehall staffs more dietary personnel than other facilities its size because it offers individual catering throughout the entire facility through its contract for food services provided by the Marriott Corporation. It also makes room service available to all residents.
Whitehall has in place a restorative dining program. This program is designed for residents who are not eating independently, but are capable of being restored to this level. The restorative dining program at Whitehall stresses the use of special utensils, modifications of diet, and independent eating training.
Whitehall provides hospice services on two levels. The first is Whitehall's in-house social worker who is available to the facility's terminally ill residents on a day-to-day basis. The second consists of Whitehall's
association with Hospice by the Sea, a private organization that provides counseling to terminally ill patients.
Whitehall arranges with amateur entertainers, school children groups, The Humane Society, the YMCA, and the Girl Scouts to provide its residents with entertainment and linkages to the outside world.
Whitehall's architectural design provides extraordinary amenities that improve the residents' quality of life. Whitehall's facility features original artwork and elaborate moldings in the corridors, hallways and patient rooms, making it residential in nature.
Whitehall's patient rooms are home-like in design and are all equipped with brand name residential furniture. Each room has a quilted bed spread and a designer headboard. The ceilings in the rooms are nine feet high rather than the standard eight feet required by code. Additionally, each room is centrally heated and cooled and has an individual thermostat and fan speed control.
The Whitehall facility features a "market square" which provides an outdoor street setting for a dental office, podiatry office, saloon where beer and wine are served, gift shop and a designated chapel for religious services.
Whitehall's dining room is large and elegant. The tables are covered with linens, and fresh flowers are placed on each table. Whitehall has an outdoor patio with an awning to provide shade. Entrance to the patio is facilitated by automatic sliding glass doors which allow residents in wheelchairs to move about conveniently. The corridors in the Whitehall facility are ten feet wide rather than eight feet as required by code. Wall coverings and fixtures are used in the corridors.
At Whitehall, breakfast is served by special order at any time during the morning. For lunch, Whitehall serves hot and cold foods, i.e., sliced meats and salads (egg and tuna). For dinner, Whitehall serves a variety of meals which are posted on a daily menu.
Whitehall offers an Alzheimer support group for families of Alzheimer patients - these groups are open to residents' families as well as to the public generally. Whitehall coordinates a diabetes support group that meets regularly at the facility. Whitehall also conducts an annual health fair, seminars on a variety of subjects and brings in speakers on health related issues all of which are open to the general public.
In terms of geographic accessibility to necessary medical services, Whitehall is strategically located. It is conveniently situated between I-95 and the Florida Turnpike in southern Palm Beach County. It is further west than any of the competing applicants which is the area where the majority of growth in the county is taking place.
In terms of offering new techniques and quality of care for patients through relationships with research entities, Whitehall is currently the site of a clinical research project of the F.A.U. School of Nursing into the "life cycle of humans." The purpose of the project is to acquaint nursing students with an understanding of the role of the elderly in American society, to develop in them a more thorough understanding of the many functions of a long-term care facility.
The Florida Board of Nursing requires nurses to undergo continuing education and obtain a certain number of continuing education units (CEU) in order to maintain their licensure. The nurse training seminars conducted by Whitehall are recognized by the Board of Nursing for CEU credit. These seminars are also open to the public.
The costs and methods of conversion proposed by Whitehall are not in question. The beds Whitehall seeks to convert were originally constructed to nursing home code. As a result, the only modification necessary to implement its conversion is the installation of curtain tracks in rooms being converted from private to semi-private.
Whitehall maintains referral agreements and other contacts to link it to the surrounding community.
Whitehall maintains links with the following hospitals in the area: Boca Community Hospital; Delray Community Hospital and West Boca Hospital.
Whitehall estimates that the total project cost for the 27-bed conversion will be $1,368,188 or $50,674 per bed. Whitehall's estimates include
$209,090 for land costs or $7,744 per bed. The original costs for the Whitehall building was over $8,000,000.
Financially, the Whitehall operation is a highly-leveraged investment, which results in Whitehall paying a high rate of interest. Interest costs on the Whitehall construction mortgage are approximately $1,100,000 per year.
Whitehall has never admitted Medicaid-eligible residents to its facility and does not offer to serve any Medicaid-eligible residents in its proposed 27-bed conversion. Although Whitehall's refusal to accept Medicaid- eligible residents is based upon Whitehall's belief that the level of reimbursement for those patients is insufficient for Whitehall to continue to maintain its existing levels of amenities and service, Whitehall has performed no calculations to determine what its Medicaid reimbursement would be or whether it would have to decrease its level of care or amenities in order to accept Medicaid-eligible residents. Whitehall has accepted a small percentage of Medicare-eligible patients in the past, but Whitehall does not propose to certify any portion of the 27-bed conversion to provide care to Medicare- eligible patients.
Whitehall has distributed $909,000 to its partners since Spring, 1988. Whitehall's projection of revenues and expenses after the 27-bed conversion assumes a yearly disbursement to partners of $500,000. Thus, high charges are necessary to cover the substantial mortgage interest and partnership dividends.
Whitehall projects patient room charges in 1992 of $181 for a standard private room, $115 for a semi-private room, and $96 for Medicare reimbursement. This room rate applies to both nursing home and ACLF residents at Whitehall.
The private pay charges projected by Whitehall are higher than those of any other applicant. Whitehall's semi-private room charge is the highest in Palm Beach County.
Whitehall projects that it will have 79 total FTE direct care staff in the combined nursing home/ACLF in the second year of operation after conversion of the 27 beds. However, Whitehall's staffing projections are based upon a patient census of 130, which includes ACLF residents. Upon conversion of the 27 ACLF beds, Whitehall will have only 100 nursing home beds, not 130. Whitehall
did not fully describe its staffing per shift. It is not possible to determine how Whitehall's nursing home beds will be staffed.
Whitehall does not propose to change its staffing levels as a result of the conversion of 27 ACLF beds to nursing beds. An ACLF resident does not require as high a level of staffing as a nursing home resident. Because 27 ACLF beds are being converted to 27 nursing home beds, Whitehall's level of staffing for nursing home patients will be reduced if Whitehall does not add staff.
Approximately 10% of Whitehall's nursing home residents come from outside Florida. Approximately 15% to 20% of Whitehall's nursing home residents come from outside Palm Beach County. Whitehall has been operating 62 ACLF beds rather than its full licensed complement of ACLF beds for approximately six years. Whitehall's 62 ACLF beds are occupied at approximately 80% to 85% occupancy. Most of the beds which Whitehall proposed to convert to nursing home beds are occupied by ACLF residents, who tend to be long-term residents. Whitehall's occupancy projections require its 27 converted beds to be filled to 95% occupancy within the first quarter of their operation. However, Whitehall does not assume that it is going to fill the 27 additional nursing home beds with its ACLF patients (in spite of Whitehall's stated purpose to convert the beds for use by ACLF residents) and Whitehall does not intend to atop admitting ACLF residents to its facility. Whitehall was unable to explain how it could continue to accommodate its ACLF patients while at the same time meeting its nursing home occupancy projections.
The financial projections and schedules prepared in support of the Whitehall application are based upon facility-wide revenues and expenses for nursing home and ACLF residents. Whitehall prepared no financial feasibility projections for the 100-bed nursing home which will result from the 27-bed conversion or for the 27-bed conversion. It is not possible to determine from the evidence submitted by Whitehall whether this 27-bed conversion or the resulting 100 nursing home bed operation will be financially feasible in the long term.
Boulevard is an existing nursing home located in Boynton Beach in the mid-Palm Beach County area. Boulevard currently operates 110 nursing home beds. Boulevard has a license to operate 44 additional beds acquired from Mason's Nursing Home. Boulevard is constructing a new wing to house the 44 beds.
During construction, those 44 beds are inactive. Twenty-five (22.7%) of Boulevard's existing 110 beds are certified for Medicaid and 56 are certified for Medicare. When the 44 additional beds become operational, Boulevard's Medicaid certified beds will increase to 43 (27.9%).
Vari-Care, Inc., a Delaware public corporation established in 1968, operates 25 nursing care facilities throughout the country, 20 of which are nursing homes. Since its inception, Vari-Care has operated its nursing facilities consistent with its corporate credo, "health care hospitality," that is, providing a health care environment with many of the hospitality characteristics commonly offered by the hotel and restaurant industries.
Vari-Care operates three superior-rated nursing homes in Florida including Boulevard Manor Nursing Center, located on Seacrest Boulevard in Boynton Beach, Palm Beach County, Florida, which it has operated since 1976 and purchased in 1988.
All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, have received superior ratings since the rating system has been
in effect in Florida. Vari-Care's nursing homes outside Florida have always received the highest or next-to-highest rating in states having a nursing home rating system.
All nursing homes owned or operated by Vari-Care in Florida, including Boulevard Manor, comply with or exceed staffing ratio requirements established by applicable laws, rules, and regulations.
Boulevard Manor is currently medicare certified, does not have any outstanding deficiencies with the Health Care Financing Administration, has satisfied the Health Care Financing Administration's conditions of participation during its past three surveys, and has never been the subject of any certification or licensure revocation proceeding or moratorium. Vari-Care has never owned or operated a nursing home which has had its license revoked, been decertified from Medicare, or had its Medicare participation status revoked.
Vari-Care provides managerial, programmatic, and operational resources to nursing homes it owns and operates, including the provision of a full-time Operations Director, who performs an operational review in each facility on a quarterly basis.
Vari-Care's quality assurance program at Boulevard Manor incorporates the use of a regional nurse to perform approximately 25 to 30 quality assurance audits in a nursing home for each visit. After conducting the audit, the nurse confers with the nursing home's Director of Nursing and Administrator to review the scoring results and analyze any problems discovered. The Director of Nursing then turns the audits over to an established quality assurance committee within the nursing home to review the audits and determine what corrective actions need to be taken. The quality assurance committee makes recommendations to the Administrator and Director of Nursing, who formulate and institute an action plan. Vari-Care's quality assurance program meets or exceeds legal requirements.
Boulevard Manor's utilization review plan evaluates the effectiveness and appropriateness of care rendered to Medicaid and Medicare patients. Reviews are performed by a committee comprised of two physicians having no financial interest in Boulevard Manor, the Administrator, the Director of Nursing, the Assistant Director of Nursing, and other professional personnel. The utilization review committee meets at a minimum on a monthly basis and on an on- call basis if there is a need.
Boulevard Manor's activity program offers 4 to 5 activities on a daily basis, including educational programs, entertainment, and religious activities. Residents of Boulevard Manor are apprised of daily activities through rounds made by Boulevard Manor's staff, daily announcements posted on the facility's bulletin board, and a monthly newsletter designed to inform the residents, staff, community, and families of activities and events at the nursing home.
Quality of life enhancements available to Boulevard Manor residents include: an ice cream and gift shop; non-institutional, residential-style furniture throughout the facility; a private dining room for residents and their family members; a chapel and library; a special foster grandparents program; color televisions and private baths within each room; an on-site laundry facility; and a barber and beauty shop.
Community programs at Boulevard Manor include: participation in a Meals-on-Wheels program in conjunction with a neighboring church; a "speakers
bureau" where nursing home residents go out into the community; visits with students from area schools, including Atlantic High School; a volunteer program for community activities; a voter registration program for residents that are not currently registered voters; and a respite care program for residents requiring care for a short period of time to relieve their usual caretaker.
Boulevard Manor has extensive links within the community through informal and formal agreements with acute care hospitals, HMOs, physicians, rehabilitation facilities, the area's Veteran's Administration hospital and clinics, mental health and substance abuse programs, other nursing homes, ACLFs, adult day care programs, adult foster homes, hospice and home health agencies, social service agencies, and other related health care and human services programs.
Intensive rehabilitative services available to residents at Boulevard Manor include speech, occupational, physical, and musical therapies, extra- nutritional therapy and dietary training, reality therapy for dementia and other patients, chemical therapy for sufferers of terminal illnesses and severe pain, bladder/bowel retraining and managing of incontinence, active and passive range of motion exercises, and ambulation programs to learn or relearn how to use walking aids and prostheses.
Boulevard Manor's provisions for treatment of residents with mental health problems include a contract with a local psychiatrist, Dr. Tom O'Leary, a contract with Hospice-by-the-Sea, in-house programs offered by specially trained staff for treatment of Alzheimer's patients, and relationships with other community mental health resources.
The majority of Vari-Care's facilities, including Boulevard Manor, are "clustered" in a particular geographic region with at least two other facilities operated by Vari-Care. Economies of scale resulting from this "clustering" concept include the use of one Regional Director and QA Nurse for all facilities in a particular area, and the ability to enter into regional food vendor contracts which contemplate a similar menu at all area facilities for better quality food at significant savings.
Boulevard Manor's educational program includes ongoing affiliations with training programs and schools in the immediate area including Palm Beach Junior College, in which professors from the college teach training courses on such subjects as sexuality, motivation, and controlling personal stress. The addition of a subacute care unit would expand the availability of training programs for professional staff.
Career advancement opportunities and other incentives and employee benefits such as tuition reimbursement and recruitment bonuses enable Boulevard Manor to recruit and maintain highly qualified staff at all levels.
Boulevard Manor is geographically accessible to its community. It is located 1/2 mile east of 1-95, is directly accessible by public transportation, and is adjacent to Bethesda Memorial Hospital. Boulevard Manor makes use of the out-patient services provided at Bethesda Memorial Hospital including patient therapy, chemotherapy, radiation therapy, X-rays, and blood transfusions.
Vari-Care integrates its "health care hospitality" philosophy into the design of its proposed bed addition at Boulevard Manor by offering non- institutional, residential-style furniture throughout the facility, corridors
that are not straight but are avenues with room offsets, ceilings that are not flat but vary in height, and a mall concept around a courtyard with landscaping.
Unique design features at Boulevard Manor include a drive-up entrance with a covered canopy, a large lobby with hotel-like furniture, a reception area, accent lighting, a beauty shop, a chapel and a study off the lobby, an ice cream and gift shop, a private dining room, a staff lounge and dining area, and a child day-care center for staff.
Vari-Care's proposed 26 beds will be housed in semi-private accommodations wherein a partition wall enables each resident to have his or her own window, air conditioning unit, television, full bath, "roll-in" shower to accommodate wheelchairs, and walk-in closet. A partition in the room creates, in effect, a private room within a semi-private accommodation. There will be
120 square feet per resident in the semi-private rooms, which exceeds the State of Florida requirement for semi-private space in nursing homes.
Vari-Care proposes to add 26 beds to its facility. Ten of the beds will be added by new construction in each wing of the existing 110-bed structure, bringing that structure up to 120 beds with two nurses stations. The remaining 16 beds will be added by converting 16 private rooms in the new 44-bed addition to semi-private rooms. There are no design changes required in the new wing, other than the conversion of 16 private rooms to semi-private rooms.
Vari-Care proposes to certify 15 (58%) of the 26 additional beds to serve Medicaid-eligible residents. Vari-Care does not propose to certify any additional Medicare beds. Vari-Care projects a 32% Medicaid payor mix after addition of the 26 beds. This projection is based solely upon Vari-Care's intent to certify 58 (32% of 180) beds for Medicaid. Vari-Care's application describes a "high demand" for Medicaid beds and Vari-Care testified to a need for additional Medicaid beds. Nevertheless, only 25 of Boulevard's existing beds and 58 of Boulevard's proposed 180 beds will be Medicaid certified. Vari- Care's ability to serve Medicaid patients will be limited by the fact that it will certify only a portion of its beds. Vari-Care's projections of a 32% Medicaid payor mix are inconsistent with its historical payor mix of approximately 20%. Vari-Care's testimony that it will achieve 32% Medicaid simple because it will certify 32% of its beds is inconsistent with Vari-Care's testimony that it has never reached its maximum capacity for Medicaid patients in its existing facility.
Vari-Care owns two other nursing homes in Palm Beach County, Medicana located in Lake Worth and The Fountains located in Boca Raton. Boulevard provided 18% of its patient days to Medicaid-eligible residents in calendar year 1988, and provided approximately 20% for the year to date at the time of hearing. In 1988, Medicana provided 15.5% of its patient days to Medicaid- eligible residents, and The Fountains provided 19.6%.
Vari-Care's total project cost for the 26-bed addition will be
$1,095,353 or $42,129 per bed. This cost includes the cost overrun anticipated by Vari-Care in its new wing but not included in the application estimates. The portion of that cost overrun allocable to the 16-bed conversion in the new wing is $106,408, or $6,650 per bed. Vari-Care's project cost estimates include land purchase costs of $107,620, or $4,139 per bed.
Vari-Care projects patient charges in 1992 of $117 for a private room,
$107 for a semi-private room, $87 as its Medicaid reimbursement, and $161 as its Medicare reimbursement.
The long-term financial feasibility of Vari-Care's proposal is demonstrated by a positive net income for the first two years of operation, the ability of Vari-Care to service its debt adequately, its low debt-to-equity ratio, and its strong projected current ratio.
Vari-Care testified that it does not intend to provide subacute care in its new 44-bed wing but that it would provide subacute care in the additional
16 beds in that wing. Boulevard's new wing incorporates design elements intended by Vari-Care to facilitate subacute care, such as piped-in oxygen. However, neither the design nor the construction of this new wing are contingent upon the approval of the 16-bed conversion. From a design standpoint, nothing proposed by Vari-Care in its application will enhance Boulevard's ability to provide subacute care. Boulevard's physical plant will be constructed to provide subacute care in the new wing, regardless of whether this application is approved.
Vari-Care presented a schematic with its application which designated those private rooms to be converted to semi-private rooms. At final hearing, Vari-Care identified those rooms to be designated as the distinct subacute care unit. However, the rooms which Vari-Care designated for subacute care are not the same rooms to be converted from private to semi-private. Four of the rooms in the subacute care area are already semi-private rooms. Only four of the beds to be converted to semi-private use are located within the designated subacute care area. Therefore, except for four beds, Boulevard's designated subacute care unit will be in place upon completion of the 44-bed addition.
Vari-Care described subacute care as care between acute hospital therapy and nursing home therapy or services not normally provided in a nursing home because of expense, specialized equipment and additional staffing that is necessary. Vari-Care cited examples of subacute care which it would provide to be respirator and ventilator care, tracheotomy care, IV services and decubitus care. However, Boulevard already provides subacute care, including tracheotomies, IV therapy, antibiotic therapy, pain management, dehydration and nutritional services, and decubitus care. Currently, subacute care at Boulevard is provided in the dedicated Medicare wing. The only type of subacute care which Boulevard will add is respirator and ventilator care. However, Vari-Care has not attempted to quantify the number of ventilator or respirator patients that it would treat. In any event, a CON is not required to provide ventilator or respirator care.
The subacute care patients which Boulevard currently treats in the existing 110 beds are predominantly Medicare patients. Vari-Care expects 50% of the patients in the new 16 subacute beds and 10% of the patients in the 44 new beds to be Medicare patients. However, Boulevard does not propose to certify any additional Medicare beds, and only 1% of its Medicare patients will be treated in the existing 110 beds after construction of the new wing. Although Boulevard mist recently experienced a 14% Medicare utilization, or about 15 Medicare patients, Vari-Care's application assumes a 7.22% Medicare utilization, or about 12 patients (.0722 x 170), after the addition of a subacute care unit. The new subacute care beds will not increase the number of Medicare patients which Boulevard treats. Virtually all of the Medicare patient load which Boulevard now treats in its existing 110 beds will be treated in the new wing, and about half of Boulevard's current Medicare patient load will move to the new
16 subacute care beds.
Subacute care requires a much higher level of staffing. The administrator of the Boulevard nursing home testified that the staffing ratios for the new addition, "as one of the conditions of the CON", are "much higher than" the current staffing levels, because of the planned subacute care. The CON condition referred to by the administrator was the condition imposed by HRS in its intent to approve the Vari-Care application. This condition would require a direct care staff to bed ratio (RNs, LPNs, and nurse aides) of .18 for the first shift, .12 for the second shift, and .08 for the third shift. Actually, these staff ratios reflect the current staffing levels at Boulevard's 110-bed facility. The testimony of the Boulevard administrator was contradicted by Vari-Care's Vice President of Operations, who testified that Boulevard's current staffing ratios will be maintained by Boulevard in the 26 new beds. There is no evidence that Boulevard will provide a much higher level of staffing in the addition.
Boulevard's staffing is lower than that of any other applicant. Boulevard's proposed total nurse staffing for the second year of operation of the 180-bed nursing home is 73.5 total FTE, which is equivalent to a staff per resident ratio of .432. The shift staffing proposed by Boulevard is 33 FTE for the first shift, 24 FTE for the second, and 17 FTE for the third, which is equivalent to a shift staff per bed ratio of .18, .13, and .09 respectively. These staff ratios are roughly equivalent to those required by HRS in its condition for the 26-bed addition.
Boulevard's proposed 16-bed subacute unit is closely related to its new 44-bed wing. However, the staffing proposed by Vari-Care for the new 44-bed wing is inconsistent with the staffing proposed by Vari-Care for the 16-bed subacute unit. When Vari-Care submitted its CON application for the new 44-bed wing, it proposed a direct care nursing staff of 88.02 total FTE for the resulting 154-bed facility. The staffing described by Vari-Care for the 154-bed facility is higher than the staffing which Vari-Care now proposes for the 180- bed facility. The staffing proposed by Vari-Care is inconsistent with its testimony that it did not intend to provide subacute care in the 44-bed addition and that higher staffing is required to provide subacute care.
Vari-Care has not submitted an application consistent with its proposal for subacute care. Vari-Care has not quantified any need for the only two forms of subacute care, ventilator care and respirator care, which it does not currently provide. Although subacute care is acknowledged to require a higher level of staffing, the level of staffing proposed by Vari-Care is essentially the same as that in its existing 110-bed facility and is lower than that proposed for its 154-bed home. Boulevard's facility design is not dependent upon its proposal to provide subacute care. The rooms designated for subacute care are not the same as the rooms containing the beds to be converted from private to semi-private beds. The level of staffing proposed by Vari-Care is actually lower than that proposed by any other applicant, none of whom proposes to add subacute care through these pending applications.
Manor Care is a 120-bed skilled nursing home facility in Boca Raton, south Palm Beach County. It holds final CON approval for a 30-bed dedicated Alzheimer unit. The Alzheimer unit will open in June, 1990.
Manor Care currently holds a superior license and has held a superior license for as long as the facility has been eligible for one.
Currently, 30% of its total patient days are for Medicaid residents. Of Manor Care's existing 120 beds, 36 beds (30%) are licensed for Medicaid.
That is consistent with the CON condition on the original facility that 30% of the beds be licensed for Medicaid.
Manor Care offers full physical therapy, occupational therapy, and speech therapy services. Manor Care offers a full complement of skilled nursing care, including tracheotomy, IV therapy and decubitus care. Manor Care classifies these specific services as skilled nursing care," not "subacute care." Manor Care characterizes "subacute care" as those services which would normally be delivered in a rehabilitation hospital. Subacute care requires 3 times the staffing normally provided in a nursing home. Manor Care believes that examples of subacute care are spinal cord injury and head trauma. On the other hand, Vari-Care chooses to characterize the services of tracheotomy, IV therapy and decubitus care as "subacute" care, and that is what it proposed to provide in its dedicated subacute unit. Manor Care offers these skilled services throughout its facility; it does not utilize a dedicated unit to provide them.
Medicare patients in nursing homes normally require skilled nursing care. In this regard, 11.6% of total patient days at Manor Care in 1988 were for Medicare residents. That represents the highest Medicare percentage in Palm Beach County.
Manor Care employs the state-of-the-cart approach for providing nursing home services. For example, Manor Care holds CON-approval to establish a 30-bed dedicated Alzheimer unit with specialized staff and programming. Manor Care is the only existing provider in this proceeding which treats Alzheimer disease in a segregated modality. (HCR's approved facility will also house a dedicated Alzheimer unit.)
Manor Care has neither transferred nor voided any CON. Manor Care has had no Medicare conditions of non-compliance. Its license has never been revoked, suspended or denied. Manor Care has had no beds decertified by Medicare or Medicaid. Manor Care has no intention of selling its facility.
Manor Care of Boca Raton, Inc. d/b/a Manor Care of Boca Raton is a wholly-owned subsidiary of Manor Healthcare Corp. Manor Healthcare Corp. owns
155 nursing homed in 28 states. It has 9 nursing homes and 3 ACLFs in the State of Florida.
Manor Healthcare has established six regional-based offices with a full complement of staff to assist its individual nursing homes in all areas of operations. It has a regional office in Orlando to service Florida.
Through its corporate and regional offices, Manor Healthcare employs a team of professionals who are responsible for providing support functions to the nursing centers, such as: quality assurance, nursing training, administration, purchasing, facility planning, assisted living, Alzheimer care, managed care, accounting, dietary, marketing, staff recruitment, and chaplaincy. This centralized support system enhances operational capabilities and efficiencies.
Manor Healthcare's primary goals are quality assurance and quality of care. It seeks to return nursing home residents to the community as soon as possible. In this regard, Manor Healthcare, on the average, returns 45% of its residents to the community.
Manor Care proposes to add 30 skilled beds to its facility by locating them on the 2nd Floor above the 30-bed Alzheimer unit. This addition will include 15 semi-private rooms, lounge space, office space, conference space, an elevator, and a nursing station.
Manor Care will offer the same quality, level and scope of skilled nursing services in the 30-bed addition as currently offered at its facility.
The proposed addition will be integrated into the existing facility. The addition will be adjacent to existing therapy areas and near several dining room and lounge areas. Due to substantial existing ancillary areas, these 30 beds can be added without adding much ancillary spaces.
Manor Care expressly agrees to the following CON conditions: 30 skilled nursing beds; 2.8 nursing hours per patient day; 37% Medicaid patient days in the addition; and 9400 square feet on the 2nd Floor.
The total project cost (before CON application fee) for the 30-bed addition is $1,270,700. Manor Care projects that the 30-bed addition will be in use by June 1, 1991. The project cost will be 51% debt-financed; the rest will be financed with equity funds.
The nursing and other staff at Manor Care are well qualified; its staffing ratios exceed licensure requirements by at least 25%. The proposed staffing levels, including the 30-bed addition, also exceed licensure requirements by at least 25%.
Manor Care maintains an educational program plan to improve the ability of staff to meet the demands of its nursing home residents. These programs will continue to be employed at the Manor Care facility.
All employees are required to attend educational programs pertinent to the improvement of skills within their respective disciplines. All employees are required to attend annual programs on fire prevention, accident prevention, infection control, effective communication, and the psychosocial/psychophysical aspects of aging.
Health care seminars are sponsored by Manor Care on a quarterly basis. Topics cover a wide range of subjects related to enhancing quality of care in nursing homes. These seminars are available to facility staff and community health care professionals.
Manor Care maintains a restorative program intended to enable each resident to achieve maximum function with the ultimate goal of returning patients back to the community whenever possible. For those unable to return home, the program seeks to ensure that all residents continue to function at their maximum potential.
Examples of specific restorative programs include: progressive ambulation; bowel management; bladder management; self-feeding training; activities of daily living training; pain management for chronic and post operative pain; muscle control training and others.
In this regard, Manor Care utilizes its "Excel Care" computerized system intended to document and evaluate the success of its restorative and rehabilitative programs. This program allows for the efficient monitoring of residents' responses to therapy and nursing care. Per this system, every unit
of care is measured by outcome standards. The outcome standards describe the expected results in the patient's condition if treatment and therapy is successfully carried out.
Manor Care maintains a utilization review committee comprised of three physicians, the administrator, the social services director, and the Director of Nursing. Its purpose is to meet every 30 days to assess patients and to ensure that appropriate and effective utilization of services is being provided.
The purpose of Manor Care's QA program is to promote and support optimum quality standards in all disciplines. This objective is accomplished through: continuing in-service education programs; on-going consultation among corporate quality standards staff and QA regional specialists; unannounced annual surveys conducted by a Manor Healthcare QA team of health care professionals; and on-going surveying of guarantor/resident satisfaction with nursing home services.
The Manor Care nursing home is reviewed annually on an unannounced basis by the QA interdisciplinary team of Manor Healthcare Corp. specialists. The QA review criteria meet all the minimum standards set by Medicare and exceed the most stringent state regulations throughout the country, including Florida. The unannounced annual review covers the following areas: resident care, dietary, activities, housekeeping, laundry, physician services, maintenance, medical records, pharmacy services, social services, administrative records and safety.
Manor Care of Boca Raton was internally surveyed in January, 1989. It rated within the top 10% of all 150 Manor Healthcare facilities in the country.
Within 30 days of an admission, the patient's guarantor is mailed a "satisfaction survey" form. The guarantor is asked to evaluate Manor Care's performance as to nursing, dietary, activities, therapies, etc. The form is self-addressed and is to be mailed to the Manor Healthcare corporate offices.
Manor Care maintains an 800 toll-free health care hotline that is a direct line to the QA department of Manor Healthcare. This is available to all persons who want to ask questions, obtain information, make suggestions, or who require follow-up on unresolved concerns at the individual nursing home level. In effect, this serves as a consumer hotline.
Manor Care designs and maintains activity programs that are responsive and appropriate to meet the physical, mental, and social needs of its residents. They include at least the following: various therapy activities; large group activities weekly; at least two religious activities per week; facility-wide general visits from the public; special events; birthday parties; activities after the evening meal; therapeutic programs for residents with special needs (such as stroke victims or blind persons); outings away from the nursing home; music activities; and special holiday events.
Manor Care maintains a formalized program for involving families and community volunteers to promote the quality of life for its residents.
Community volunteers participate on a routine basis in providing services to the residents, such as: reading to residents, distributing newspapers and magazines, assisting on community outings, and assisting with correspondence. These services bring the community closer to the nursing home residents.
Manor Care establishes and maintains linkages with state and local health care providers to ensure that a continuum of care is available to residents and to facilitate community involvement by the nursing center. These community linkages and referral agreements include: local hospitals, physician specialists, therapists, home health agencies, adult day-care centers, area agencies on aging, homemaker services, private insurance companies, ACLFs, and other community agencies. Manor Care currently holds transfer agreements with four local hospitals.
Manor Care works very closely with local agencies to ensure that residents are located in the most appropriate setting for their needs. Manor Care maintains linkages and agreements with less intensive institutions to meet the needs of those persons or residents who do not require or no longer require nursing home care, such as: adult day-care, meals-on-wheels, and senior centers.
Due to existing ancillary space, Manor Care can add its proposed 30- bed unit at a relatively small cost. Manor Care already has ample dining room space, activity areas, therapy areas, and social areas which can accommodate an additional 30 beds without difficulty.
In addition, Manor Care already retains the core nursing, administrative, therapy, and other staff required to operate a nursing home. As such, additional staff for the 30-bed addition is not substantial. The Manor Care application therefore provides a cost-effective approach to add nursing home beds to the community.
Manor Care currently offers and will continue to offer clinical and training opportunities to students currently enrolled in nursing educational programs at local technical schools and universities. Manor Care also provides services to persons seeking to become certified nursing assistants.
Manor Care serves as a clinical site for gerontological rotations for nursing students at Palm Beach Community College. Manor Care is developing a similar internship program with Atlantic Vocational Technical School and seeks to develop clinical affiliations with South Technical Vocational School and Florida Atlantic University.
This working relationship not only trains students and health care professionals, but also provides Manor Care valuable resources in staff recruitment and development.
Manor Care sponsors and will continue to sponsor nurse "refresher" courses which are taught by local area nursing school instructors. Persons wishing to renew their nursing licenses and certification can do so through this course work. Manor Care finances these nurse refresher programs.
Manor Care sponsors and finances various health care seminars on a quarterly basis. These seminars are advertised in local hospitals, adult day- care centers, and other agencies. These seminars are available to both Manor Care staff and community health care professionals.
Manor Care maintains a "career ladder" program which enables Manor Care employees (both at the facility and within the Manor Healthcare Corp. system) to reach their career goals through promotion, career advancement programs, and tuition support for additional schooling.
Both the financial statements of Manor Care of Boca Raton and Manor Healthcare Corp. (which will provide the debt financing) demonstrate the financial strength and financial resource availability to accomplish and operate the proposed 30-bed addition.
Manor Care has historically been very accessible to Medicare and Medicaid residents. In 1988, 11.9% total patient days were for Medicare patients. This represented the highest percentage in Palm Beach County. In calendar year 1989 to date, Manor Care has provided 30% of total patient days to Medicaid patients.
For its proposed 30-bed addition, Manor Care commits to a minimum of 37% Medicaid If the 30 beds are approved, Manor Care's total facility after one year of operation would provide 34% Medicaid.
Manor Care's historical and projected Medicare/Medicaid commitment is substantial, particularly when considered with the other existing providers/applicants in this case:
Actual | Actual | Projected | |
1988 Medicare | 1988 Medicaid | Total Facility Medicaid After First Year of Operation | |
Whitehall | 1.3% | 0 | 0 |
Vari-Care | 5% | 18.0% | 26.65% |
Manor Care | 11.9% | 26.8% | 34% |
The pro formas in the Manor Care application are reasonable. These pro formas demonstrate that the Manor Care proposal is financially feasible in the long-term.
The pro formas are based on reasonable assumptions. The projected utilization underlying the pro formas is reasonable. The projected charges are reasonable. The projected staffing levels, staff salaries, and the other expenses were based on existing data and expense levels, and then reasonably inflated forward.
Manor Care's proposed 30-bed addition will be integrated into the existing facility. The addition will benefit from existing, innovative quality of life features designed to enhance privacy and personal choice options for residents and family members. These features include: beauty/barber shop, formal private dining room, lobby areas, therapy areas, activity/recreational areas, specially-equipped rehabilitation dining room, distinct lounge area for families, self-contained Alzheimer's unit, carpeted conference room, several private room accommodations, outdoor patio areas, each patient room with its own bathroom, and reading rooms. In addition, the patient rooms are larger than the state requires and are very proximate to the nursing stations.
The Manor Care facility incorporates many residential design and home-like features. Color schemes are emphasized for a home-like atmosphere, such as: muted vinyl wall covering; color-coordinated draperies, bedspreads and curtains (residents can choose their color scheme at admission); and lounges which are theme-decorated around particular purposes, such as a game room. Patients are permitted to exercise choice in furnishings and decorations.
Patient room size is a major factor in controlling construction costs. At Manor Care, the rooms are rectangular with the shorter walls on the outside. This design minimizes exterior wall space, which is more expensive to construct than interior wall space. Minimized exterior walls also improve energy efficiency.
The proximity of nursing stations to the patient rooms at Manor Care is cost-effective. The rectangular room shape reduces the cost of construction by reducing corridor length and square footage. Shorter corridors are less costly and also are more operationally efficient.
The central core area at the facility concentrates the ancillary and support areas. Administrative areas are centrally located for easy access by residents and families. Resident lounges are located near the nursing station, thereby facilitating supervision by nursing staff.
The State Health Plan consists of three broadly-stated goals. Goal 1 is to develop an adequate supply of long-term care services throughout Florida. Each of the four proposals for additional beds is consistent with this goal in that each proposal contributes to the supply of beds determined to be needed in Palm Beach County.
Goal 2 of the State Health Plan is to develop a supply of appropriate long-term care services that are accessible to all residents. The HCR, Manor Care, and Vari-Care proposals are consistent with this goal in that each would supply nursing home services to those in need of such services, and their nursing homes will be accessible to all residents of the planning district, including Medicaid patients. Further, HCR will be the only new facility in northern Palm Beach County, and Manor Care is located in southern Palm Beach County, which experiences the highest demand for nursing home beds in Palm Beach County. Lastly, all three of those applicants will accept a significant number of Medicaid and Medicare patients. On the other hand, the Whitehall application is not consistent with this goal. First, Whitehall has never served Medicaid residents and does not propose to do so. Second, Whitehall does not provide substantial Medicare: .7% in 1987, and 1.3% in 1988. Third, Whitehall may not be affordable for many Palm Beach County residents. Its charges are the highest in Palm Beach County. Fourth, Whitehall markets itself to non-Florida residents. About 20% of its nursing home and ACLF patients reside outside Florida. Hence, approval of Whitehall's 27-beds does not promote access for Palm Beach County or Florida residents.
Goal 3 is to insure that long-term care services are appropriately utilized throughout Florida. All four applicants have in place utilization and pre-admission screening programs for appropriate utilization of nursing home services.
Accordingly, the proposals of HCR, Vari-Care, and Manor Care are consistent with the State Health Plan; however, the proposal of Whitehall is not.
The District IX Local Health Council has adopted five long-term care CON allocation factors which are applicable to proposals for additional nursing home beds in Palm Beach County. The first factor is that freestanding nursing homes should have a minimum of 120 beds in urban subdistricts. Palm Beach County is an urban subdistrict in District IX. HCR's proposal is consistent with this recommendation in that the HCR proposal will bring HCR's nursing home up to the minimum 120-bed size unit. Manor Care is consistent with this
recommendation in that it is an existing 120-bed facility with a 30-bed Alzheimer unit approval. Likewise, Vari-Care meets this recommendation since it is a 154-bed facility. Whitehall, however, fails to meet this recommendation since it only has 73 nursing home beds and only seeks approval for 27 more, for a total of 100 beds. Within this first recommendation is a recommendation that priority be given to additions to nursing homes so that the total capacity would reach, but not be greater than, 120 beds. The HCR proposal is consistent with this recommendation in that its proposal, if granted, would increase the number of beds in that facility to only 120. Accordingly, HCR should be given priority in this proceeding in order to meet the first recommendation in the Local Health Council. To the contrary, Whitehall should be given no priority since it does not propose to meet the first recommendation of the Local Health Council.
The second recommendation of the Local Health Council is that all new nursing homes and expansions should agree that a minimum of 30% of its patient days will be provided to Medicaid-eligible patients, if such patients are available within the subdistrict. Medicaid-eligible are available within the subdistrict and accounted for more than 700,060 patient days in Palm Beach County in calendar year 1988. HCR's proposal for 42% of its additional patient days to be devoted to Medicaid-eligible patients exceeds the recommendation of the Local Health Council, and the facility-wide commitment to 35% of its patient days to Medicaid-eligible patients likewise exceeds the recommendation. Similarly, Manor Care agrees to a 37% Medicaid condition to its CON approval and, therefore, this factor is satisfied. Likewise, Vari-Care projects a 32% Medicaid payor mix. Whitehall will serve no Medicaid patients, and, accordingly, fails to comply with this recommendation of the Local Health Council.
The third recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a range of long-term care services. HCR's 120-bed facility would offer a range of services to all of its patients including those in the proposed addition. Similarly, Manor Care Vari- Care, and Whitehall propose and provide a range of services to their patients and will do so in their proposed additions.
The fourth recommendation of the Local Health Council is that priority should be given to applicants who demonstrate a documented history of providing good residential care, staff ratios that exceed minimum requirement, provisions for the treatment of residents with mental health problems, and the inclusion of intensive rehabilitation services The HCR, Manor Care and Vari-Care proposals are consistent with this recommendation in that their staffing ratios exceed minimum requirements, they provide treatment for residents -with mental health problems, they have documented their ability to provide good quality care by operating facilities with superior licenses, and intensive rehabilitation services will be available to their residents. Medicare participation often indicates the level of intensity of skilled services offered at a facility. In this regard, Whitehall's Medicare participation of .7% in 1987 and 1.3% in 1988 does not demonstrate a substantial commitment to intensive skilled or rehabilitation services.
The fifth recommendation of the Local Health Council is that priority should be given to applicants who propose service to a distinct patient population that currently is not being served within the Subdistrict. No applicant identified a distinct patient population that is not currently being served within the Subdistrict. Whitehall suggests that its application promotes this factor since it has Jewish patients. It does not suggest that the other applicants do not have Jewish patients. However, there are already three
dedicated Jewish nursing homes in Palm Beach County. The presence of three dedicated Jewish nursing homes clearly indicates that the Jewish population is currently being served within the Subdistrict. Whitehall further concedes that its services (frozen Kosher dinners) is not the equivalent of those services of offered at a dedicated Jewish nursing home. Accordingly, no applicant should receive priority pursuant to this final recommendation of the Local Health Council since no applicant has identified a distinct population not currently being served, and no applicant has proposed to serve such a population.
Accordingly, the HCR, Vari-Care, and Manor Care proposals comply with the District IX Local Health Council plan, but the Whitehall application does not.
HCR's proposed facility will be located in northern Palm Beach County, Vari-Care's facility is located in central Palm Beach County, and Manor Care and Whitehall are located in very close proximity to each other in southern Palm Beach County. The two facilities in southern Palm Beach County both have licensure ratings of superior. It is clear that Whitehall's facility is more luxurious than that of Manor Care (and the other applicants for that matter), and its patient charges are high enough to offer many quality of life enhancements which other facilities are unable to offer. For example, Whitehall offers its patients room service, complimentary beer and wine, and a chauffeur- driven Cadillac for excursions outside the nursing home. However, Manor Care offers services more indicative of a high quality of care than Whitehall.
Per its application, Whitehall will not staff its 3-11 or its 11-7 shift with nursing administrators, therapists, nurse-aides, activity directors, or social services. In comparison, Manor Care will provide such staff in its 3-
11 shift, and nurse-aides in the 11-7 shift. Whitehall does not provide in- house physical therapists. Manor Care employs physical therapists. Whitehall provides minimal skilled nursing services based on its small levels of Medicare participation. Whitehall proposes no additional Medicare-certified beds. Manor Care maintained the highest level of Medicare participation in Palm Beach County in 1988. At Whitehall, Alzheimer's patients are mingled in with other nursing home patients. Manor Care has final CON approval to establish a 30-bed dedicated Alzheimer unit so as to treat Alzheimer disease in the most appropriate modality. Whitehall mixes its ACLF and nursing home residents.
They share dining rooms, activities, staff, and occupy the same floor. That is very uncommon.
Regents Park of Boca Raton (hereinafter "Regents Park"), operated by Petitioner Health Quest Management Corporation III, is a 120-bed nursing center located in Boca Raton. Whitehall is located only about one mile from Regents Park, and Manor Care is located three to five miles from Regents Park.
Approximately 90% of Regents Park's patients come from the Boca Raton area. Most are referred to the facility by Boca Hospital and West Boca Hospital. Like Regents Park, Manor Care and Whitehall also receive referrals from Boca Hospital and West Boca Hospital.
Regents Park's general nursing program is the bedrock of the facility's service program. Additionally, Regents Park offers an established rehabilitation program. The facility maintains a fully equipped rehabilitation department housed in a specialized module that was built onto the facility some years ago. All of Regents Park's Medicare patients, as well as a substantial proportion of its skilled care patients, participate in the rehabilitation
program. Boca Raton's local hospitals refer patients to Regents Park for rehabilitation.
Most nursing homes experience less than half the Medicare utilization of Regents Park and Manor Care. These two facilities have historically ranked among the largest providers of Medicare services in Palm Beach County, despite their close proximity.
Regents Park also offers an established program for low-functioning patients, which includes Alzheimer's patients and patients suffering from other dementias. Approximately thirty residents participate in the low-functioning program, and the program has four specialized staff.
Health Quest claims that it would lose staff and patient days if Whitehall or Manor Care were approved. At the same time, Health Quest admits: it would not release staff; it would not limit current services; Health Quest is an excellent provider and can compete in the future for new residents; and Health Quest staffs well above minimum licensure requirements. Hence, by its own admission, Health Quest failed to show any credible or meaningful adverse impact if Manor Care or Whitehall were approved. Health Quest estimates it might suffer only a $12,000 or a $26,000 net loss if either application were approved. That amount does not constitute substantial, adverse impact.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.
Section 120.57(1) proceedings are de novo proceedings intended to formulate final agency action, not to review prior or preliminary agency action. Each applicant has the burden of proving entitlement to a certificate of need. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). The award of a certificate of need must be based upon a balanced consideration of all statutory and rule criteria. Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So.2d 361 (Fla. 1st DCA 1984). The weight to be given to each individual criterion is dependent upon the facts of each case.
A threshold issue in this proceeding is the need for additional nursing home beds. Section 381.705(1)(a), Florida Statutes (1987). Need for nursing home beds is computed pursuant to the methodology contained in Rule 10- 5.011(1)(k), Florida Administrative Code.
HRS has established by rule a procedure for publication of fixed need pools which provides, inter alia, that the fixed need pool published by HRS in the Florida Administrative Weekly shall not be changed or adjusted in the future regardless of any future changes in factors which would lead to different calculations of need, if retroactively applied. The fixed need pool and other relevant planning information are used to review applications against all statutory criteria. Section 10-5.008(2), Florida Administrative Code. The validity of the fixed need pool rule recently was upheld in Health Quest v. HRS, DOAH 89-2623R, Final Order entered October 4, 1989, citing Meridian, Inc. v. Department of Health and Rehabilitative Services, Case Nos. 88-419 and 88-421 (Fla. 1st DCA 1989), Opinion filed September 12, 1989.
In this case, the bed need is determined to be that published by HRS, or 62 beds. Because the number of beds sought by the applicants exceeds the number of needed beds, comparative review must be undertaken.
Section 381.705(1)(a) also requires comparison of the applications to the goals and recommendations of the State and Local Health Plans. The Local Health Plan recommends that nursing homes be sized at 120 beds, in order to take advantage of recognized economies of scale. The HCR application demonstrates the highest degree of consistency with the Local Health Plan, in that the HCR proposal will cause the HCR nursing home to achieve the Local Health Council's recommended optimum size of 120 beds for a nursing home and HCR is, therefore, entitled to receive priority. Also, the HCR addition and the entire HCR nursing home will provide more than 30% of its patient days to Medicaid-eligible patients, and HCR demonstrated compliance with the quality of care, staffing recommendations and program recommendations of the Local Health Council. Similarly, Manor Care and Vari-Care comply with the Local Health Council recommendations regarding size, substantial service to Medicaid-eligible patients, quality of care, staffing, and programs. None of the applicants proposed to serve a distinct patient population not currently being served, and none of the applicants are entitled to this priority.
The Whitehall application is not consistent with the recommendations of the Local Health Council. Whitehall does not accept any Medicaid-eligible residents, the Whitehall proposal will not achieve the minimum 120-bed size recommended by the Local Health Council, and its commitment to rehabilitative services is unclear.
HCR, Manor Care and Vari-Care are consistent with the goals of the State Health Plan relating to supply, access and utilization. However, access to the Vari-Care nursing home will be limited because of its limited certification of Medicaid beds. The Whitehall proposal is inconsistent with the State Health Plan, because it will be completely inaccessible to Medicaid- eligible residents.
Section 381.705(1)(b) requires consideration of the availability, quality of care, appropriateness, accessibility, utilization and adequacy of existing nursing home services in the district. This criterion is addressed in broad terms by the bed need formula, which takes into account most of these concerns. This criterion is met by all applicants, to the extend that there is a need for 62 additional nursing home beds. No party demonstrated or proposed to correct any significant deficiencies among these concerns in the district, and none of the applicants demonstrated superiority with regard to this criterion.
Section 381.705(1)(c) requires consideration of the ability of the applicants to provide quality of care and their record of providing quality of care. Each of the applicants operates one or more superior rated nursing homes in Florida, and each of the applicants proposes to staff their nursing homes at a level in excess of the requirements of licensure regulations. Each applicant meets this criterion. Rule 10-5.011(1)(k)4., Florida Administrative Code, requires HRS to assess the applicants' abilities to provide quality of care through evaluation of whether any nursing home licenses have been denied, revoked or suspended, whether any nursing homes have been placed in receivership and whether there have been any conditions which threatened or resulted in direct or significant harm to residents. Each applicant has demonstrated the ability to provide quality of care in accordance with these provisions.
Staffing is an important element of a provider's ability to provide quality care and special programs. Among the applicants who disclosed their staffing levels for nursing home care, HCR proposes the highest level of total facility staffing, with Manor providing the second highest level. Boulevard proposed to maintain its current staffing levels in its 26 additional beds, even though Boulevard proposes to provide a higher level of care in those beds. In view of the higher level of care required by the subacute patients, Boulevard's staffing proposal is not consistent with its program proposal. On the other hand, if Boulevard's current staffing level is adequate to provide subacute care, there seems to be no reason why Boulevard could not now be providing such care.
Whitehall proposes the highest total facility staffing, but it is not possible to determine what level of staffing will be devoted to the nursing home residents. Furthermore, in view of the fact that nursing home care is a higher level of care than ACLF care, Whitehall's proposal to maintain its current total facility staffing level is inconsistent with its proposal to convert 27 ACLF beds to nursing home beds requiring a higher level of care.
Section 381.705(1)(e) requires consideration of probable economies and improvements in service derived from operation of joint, cooperative or shared health resources. No applicant demonstrated a proposal for the operation of joint, cooperative or shared health care resources. To the extent that it may be argued that the joint operation of nursing home and ACLF beds, such as the Whitehall operation, is addressed by this criterion, it is noted that Whitehall demonstrated no economies or improvements in service relating to its operation. In fact, patient charges for ACLF patients and nursing home patients at Whitehall are identical; Whitehall's patient charges, therefore, bear no relationship to the level of care provided.
Section 381.705(1)(g) requires consideration of the need for research and educational facilities. None of the applicants demonstrated any need for such programs or proposed any programs of research or education which cause their applications to be superior with regard to this criterion. Each of the applicant's facilities are and will be available for training and educational programs.
Section 381.705(1)(h) requires consideration of a variety of issues, including the availability of resources, the availability of the facilities for training and educational purposes, and the extent to which the proposed services will be accessible to all residents of the service district. The applicants stipulated among themselves that each applicant had the available resources, including manpower-management personnel, and funds for project accomplishment and operation. No applicant demonstrated that its project would have any significant effect on the clinical needs of health professional training programs. There is no evidence that additional facilities are required for training or that the proposed facilities might be subject to better alternative uses. Except for accessibility, each applicant meets this criterion.
Accessibility to proposed services is a significant distinguishing factor among these applicants. The Whitehall nursing home will not be accessible to any patients who have insufficient private financial resources to pay for nursing home care. Whitehall refuses to accept Medicaid-eligible residents. Whitehall's proposed patient charges are substantially higher than those of any of the competing applicants and are the highest in Palm Beach County, thereby further limiting the accessibility of Whitehall to the residents of the district.
Economically, the HCR facility will be the most accessible, because its patient charges are the lowest and it will certify all of its beds to accept Medicaid-eligible residents. Geographically, the HCR proposal will improve the accessibility to nursing home services for residents in northern Palm Beach County, where the HCR nursing home will be the only new nursing home. The remaining applicants propose to add nursing home beds to areas of middle and southern Palm Beach County where there are currently several hundred additional approved nursing home beds. After HCR, Manor Care is the next superior applicant on this criterion. Its patient charges will be lower than Vari- Care's, yet its staffing levels will be higher. Additionally, its Medicaid commitment is more substantial than that of Vari-Care, and it has been historically the highest provider of Medicare services in Palm Beach County.
Section 381.705(1)(i) requires consideration of the financial feasibility of the competing proposals. Each party except Health Quest has stipulated that each proposal is immediately financially feasible. The evidence demonstrates that the proposals of HCR, Vari-Care and Manor Care are financially feasible, both immediately and in the long term. Although the total Whitehall facility, which includes both ACLF and nursing home beds, is shown to be financially feasible, Whitehall submitted no evidence concerning the financial feasibility of the project for which it now requires a certificate of need, and all of its financial data and projections are based on a census of 130 which matches neither its nursing home component nor its nursing home/ACLF combined facility. Except to the extent that Whitehall failed to provide any evidence of the financial feasibility of its proposed nursing home services, there is no basis for finding the feasibility of any of the competing proposals to be superior.
Section 381.705(1)(1) requires consideration of the probable impact of the projects on the cost of providing the proposed health services, the effects of competition, and improvements or innovations which promote quality assurance and cost effectiveness. HCR demonstrated that its project, by increasing the size of its 90-bed nursing home to the recommended size of 120 beds, will take advantage of economies of scale and reduce the capital cost per bed. HCR's proposal enhances the cost effectiveness of its own nursing home, and HCRs proposal is the most cost effective of the competing proposals to add beds to existing facilities.
The HCR project will provide nursing home services to residents at a lower cost than any of the competing proposals. Although the HCR nursing home will not compete with the nursing homes located in middle or southern Palm Beach County, HCR's proposal will enhance competition and consumer choice in northern Palm Beach County, where HCR is the only new provider. None of the competing proposals in middle and southern Palm Beach County have been shown to have any impact on competition, either positive or negative.
Section 381.705(1)(m) addresses the cost and methods of construction and the availability of less costly or more effective methods of construction. Each applicant proposes reasonable costs and appropriate methods of construction. HCR proposes the most innovative design, with its emphasis on a residential atmosphere and elimination of traditional institutional design. The HCR proposal is also the most cost effective means of providing additional beds. One reason the HCR proposal is least costly is because addition of 30 beds at the HCR nursing home will not require the construction of any new support spaces. By comparison, 16 of the 26 beds to be added by Boulevard must share the cost of construction of significant additional support spaces in the new
wing. Although Whitehall can convert existing ACLF beds at little present cost, those beds must continue to bear the high cost of the original Whitehall project, with its unusually high interest costs. The HCR proposal is superior, in terms of cost and methods of construction.
Section 381.705(1)(n) requires consideration of the applicant's past and proposed provision of service to Medicaid and indigent patients. Whitehall has never served Medicaid patients and does not propose to do so in the future. Whitehall has not demonstrated compliance with this criterion. Although HCR, Manor Care, and Boulevard each have served Medicaid-eligible residents in the past, HCR demonstrated the highest level of historic service to Medicaid- eligible residents, with Manor Care demonstrating the next highest. Facilitywide, HCR, Manor Care and Boulevard propose approximately the same level of service to Medicaid patients. However, HCR is committed to certification of all of its beds for Medicaid-eligible residents. By comparison, the Vari-Care proposal has inherent limits, because Vari-Care will certify only 15 additional beds in its 26-bed addition, for a total of 58 in its 180-bed facility. This number of beds is the minimum number required for Boulevard to meet its projections and CON condition for Medicaid service. If Boulevard experiences any additional demand for Medicaid admissions, Boulevard will not be able to accept those patients.
All parties except Health Quest, HRS, and Vari-Care have stipulated that the applicants meet the criteria of Section 381.705(2). It is determined that all applicants meet this criterion.
A balanced consideration of all the relevant criteria and a comparative review of the competing applications results in the conclusion that the HCR proposal to add 30 beds to its approved 90-bed nursing home in northern Palm Beach County is the superior proposal. HCR's proposal is the most cost effective, HCR proposes the lowest patient charges, HCR will provide the highest level of staffing, and HCR's proposal to increase the size of its nursing home to 120 beds best takes advantage of the economies of scale recommended by the local health council.
After HCR, Manor Care has clearly demonstrated that it is the next superior applicant at bar. It complies with the recommendations and goals of the State Health Plan and the District IX Local Health Council Plan. It meets the statutory criteria and has maintained a superior license ever since it became eligible to receive one. Its staffing levels will be higher and its proposed charges will be lower than those of Vari-Care. It has historically been the highest provider of Medicare services in Palm Beach County. It will serve a substantially higher number of Medicaid and Medicare patients than Vari- Care.
Vari-Care has failed to demonstrate that its application is superior in any way. HRS testified that it gave preliminary approval to Vari-Care's application for the reason that it was proposing a subacute care unit. Yet, HRS has no definition of what constitutes subacute care services. On the other hand, the evidence indicates that those services described by Vari-Care as "subacute" are basically the services offered in any community nursing home offering skilled nursing services. The only two forms of subacute care which Boulevard does not currently provide are ventilator care and respirator care.
No CON is necessary to provide ventilator care or respirator care. Although subacute care is acknowledged to require a higher level of staffing, the level of staffing proposed by Vari-Care is essentially the same as that already experienced in its existing 110-bed facility and is actually lower than that
proposed for its approved 154-bed home. Vari-Care's facility design is not dependent upon its proposal to provide subacute care. The rooms designated for subacute care are not the same as the rooms in which Vari-Care would place the beds sought by it in this proceeding. The level of staffing proposed by Vari- Care is actually lower than that proposed by any other applicant, none of whom proposes to add subacute care through these pending applications. Vari-Care's projected staffing is lower than that projected by HCR and Manor Care. On the other hand, its projected charges are higher than HCR or Manor Care. Finally, Vari-Care will be accessible to fewer Medicare and Medicaid patients than HCR and Manor Care.
The Whitehall application fails to meet several important review criteria. Whitehall's proposal is not consistent with either the State Health Plan or the District IX Local Health Council Plan. The Whitehall facility is not accessible to all residents. It provides no Medicaid and minimal Medicare participation. It imposes the highest charges for nursing services in Palm Beach County. Whitehall markets itself outside of the State of Florida and provides substantial volume to non-state residents. Such does not promote access for Florida residents or residents of Palm Beach County. The Whitehall application does not include a pro forma for a 100-bed nursing home facility. Therefore, Whitehall's application does not demonstrate financial feasibility. The Whitehall proposal is not cost-effective; it has huge interest and depreciation expenses. Lastly, the actual and projected direct care staffing levels for the nursing home component of Whitehall have not been disclosed.
Each applicant provided a description of their plans for various operational details, including plans for recruitment, career ladders, preadmission screening, appropriateness review, discharge planning, utilization review, quality assurance programs and procedures, specialized programs, resident surveys, residents' councils, security and protection of residents' property, dietary services, linkage with local providers, activity cordination, spiritual development, mental health services, restorative and normalizing activities, quality of life enhancements, training-related plans for staff development and improvement of staff skills, and the availability of their facilities for training programs. Some of those programs have been described in the Findings, of Fact section of this Recommended Order. All of them have not been, however, for the reason that many of the operational plans and programs are simply matters of complying with nursing home licensure standards in the State of Florida, which requires compliance with those types of plans and procedures in the provision of high quality of care. No applicant truly sought to demonstrate that its operational plans and procedures were superior to those of other applicants, and no Findings of Fact were therefore made as to which applicant, for instance, had the best preadmission screening procedures. Even though an individual applicant might have had an innovative or unusually good program in one of the areas described in this paragraph, such as Manor Care's internal unannounced quality assurance reviews, there was no demonstration that that particular applicant excelled over other applicants in the other areas. Accordingly, the programs described in this paragraph do not establish the basis for any applicant to be declared a superior applicant based upon these programs.
It is clear that all of the applicants in this case are good applicants. HCR and Manor Care also submitted good applications. Vari-Care's application is not consistent with the project that it is proposing, and Whitehall's application based upon its non-existent and non-proposed 130-bed nursing home cannot be properly analyzed to determine its real staffing patterns and financial feasibility.
Many of the statutory criteria have been met simply by the determination that there is a need for 62 nursing home beds in this planning horizon. Many of the other statutory criteria have been deemed not in dispute by the applicants in this proceeding by stipulation, and those criteria initially disputed by Health Quest but not disputed by the applicants or the Department have been resolved in favor of the applicants for the reason that Health Quest at the final hearing put on no evidence as to the criteria it disputed other than its dispute relating to the correct numerical computation of need. Of those few criteria remaining in dispute since there is need for additional beds and since all the applicants appear to operate good nursing home programs, accessibility to all the residents of Pale Beach County becomes the most important criteria in this case. The greatest accessibility will be provided by HCR which also proposes the lowest patient charges and the highest direct care staffing ratio. The next most accessible applicant is Manor Care which proposes the next lowest patient charges and the next highest direct care staffing ratios. Vari-Care is next in line although nothing unusual is actually proposed in its project. Whitehall, of course, is last in line since it is simply not an accessible facility.
Health Quest has failed to prove that it has standing to participate in this proceeding as a party. Although Health Quest takes the position that it is axiomatic that if more nursing home beds are approved in its service area then it will be substantially and adversely affected, such a proposition is not axiomatic when there has been a determination that the need exists for those additional beds since the underlying premise is that the additional beds are needed in addition to the existing beds which are needed. As a matter of proof, Health Quest's own witness, the Administrator of the Health Quest facility involved, testified that if the beds sought in this proceeding are approved, Regents Park would not fire any of its staff and would not reduce the programs or services being offered. Health Quest simply failed to prove that Regents Park would be affected let alone substantially affected by the granting of any of the applications pending in this proceeding.
Even if Health Quest had proven its standing to participate as a party in this proceeding, Health Quest has failed to prove that the need for nursing home beds for this planning horizon in Palm Beach County is different than the need for nursing home beds published by HRS pursuant to its fixed need pool. Rule 10-5.008(2)(a), Florida Administrative Code, fixes and keeps constant the numeric need published at the initiation of a project review cycle throughout the CON application process. That rule requires that the fixed pool of bed need remain constant and not be altered by new information developed after the initial applications are filed in order to effectively review CON applications on a comparative basis. Therefore, as a matter of law Rule 10- 5.008(2)(a) requires that the initially-published need for 62 beds in Palm Beach County remain fixed for purposes of the planning horizon at issue in these proceedings.
Health Quest attacks HRS' computation of the fixed need pool pursuant to its need methodology regarding the occupancy rate of beds licensed to two different nursing homes in Palm Beach County. First, Palm Beach County Nursing Home reported for the reporting period in question an occupancy rate in excess of 100%. Its report commingled patient days from its nursing home beds, which were required to be reported, with its patient days from its designated AIDS beds, which are not required to be reported since they are not considered community nursing home beds. Second, Mason's Nursing Home did not file a report for the reporting period regarding its 44 licensed beds since the nursing home was not in operation during the reporting period and, therefore, its beds could
not be occupied. The correct number of licensed beds at both Palm Beach County Nursing Home and at Masons's Nursing Home were included in calculating the
nursing home bed need methodology but the occupancy rate of those beds was excluded in computing the occupancy rate of the licensed nursing home beds in Palm Beach County.
Both situations were highly unusual. The evidence showed that HRS has a general policy of calculating the fixed need pool without considering "inordinary" situations, such as when a nursing home reports an occupancy rate in excess of 100% due to, among other reasons, commingling of beds or where beds cannot be occupied due to licensure violations. Such "inordinary" situations are excluded from HRS' calculation of bed need in order to arrive at a realistic and accurate bed need for a given community. Moreover, it is HRS' policy in calculating need to exclude occupancy data from nursing homes which fail to report the appropriate information provided that 85% of the beds in a community are reported. In this situation 85% of the beds in Palm Beach County had been properly reported, and HRS, therefore, properly excluded Palm Beach County Nursing Home and Mason's Nursing Home beds from the computation of occupancy rate.
Health Quest's attempts to show that there is precedent for including Mason's Nursing Home in the occupancy rate computation by assigning a "0" occupancy rate to it were factually and legally insufficient. Further, prorating the occupancy of Palm Beach County Nursing Home by dividing the reported occupancy among the nursing home beds and the designated AIDS beds requires utilizing the assumption that the occupancy rate among the nursing home beds and the AIDS beds was equal. There is no basis in this record for such an assumption.
The statutory criteria in Section 381.705, Florida Statutes, set forth no legal standard or methodology for comparative review among competing applicants. In a case such as this, where there is insufficient numerical need to approve all applicants, a balanced consideration of the statutory criteria must be made to determine which applicants can best meet the nursing home needs of Palm Beach County. Balsam v. Department of Health and Rehabilitative Services, 486 So.2d 1341 (Fla. 1st DCA 1986); Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, Inc., 447 So.2d
361 (Fla. 1st DCA 1984). HRS unsuccessfully attempted to introduce evidence of its new scoring system pertaining to "scoring" applications for certificates of need for nursing home beds.
The evidence indicates that pursuant to HRS' new scoring system, the applicants are required to provide certain information in a certain format of a certain designated length. The information requested relates to the various statutory criteria. Each area of inquiry has been previously assigned a set number of points. Two individuals review the application and score each section on the application. The scores of those two individuals is then averaged. The scoring system appears to produce some interesting but meaningless information. For example, an applicant can be given half of the credit assigned to the question of financial feasibility. Such a result is illogical since a project is either financially feasible under which scenario it should receive full points for that inquiry or it is not financially feasible under which scenario it should receive no points for that inquiry. Receiving half credit for financial feasibility is illogical because a project either is or it is not.
The scoring system, therefore, fixes in advance for any nursing home application for any planning horizon the specific weight to be assigned to each of the statutory criteria and is contrary to the law requiring that the statutory criteria be weighed and receive a "balanced consideration" on a case
by case basis pursuant to the facts of each individual case. The approach taken by HRS in utilizing its new scoring system is, accordingly, contrary to the law in the State of Florida for effectuating a comparative review of competing applications.
Further, in response to specific inquiry during the final hearing, the attorney for HRS advised the undersigned that it was not HRS' position that the undersigned should "re-grade" the applications utilizing HRS' scoring system. Since the evidence indicated that the scoring system was contrary to the law in this state and since HRS took the position that the scoring system was not to be utilized by the undersigned in evaluating these applications, then the documents relating to that scoring system (for example, the scoring sheets and scoring instructions) were deemed irrelevant to the issues under consideration and were rejected as part of the evidence in this proceeding.
Similarly, the State Agency Action Report was excluded from evidence in this proceeding since it only contained and memorialized the scores assigned to each of the applicants and the basis for each of those scores. There was no dispute as to HRS' preliminary agency action and preliminary determination as to which of these applications should be approved and which should be denied. Accordingly, admitting the scoring system and the information in the State Agency Action Report to show how HRS reached that preliminary determination by assigning its fixed number of points to each area of inquiry as reflected in the State Agency Action Report was irrelevant to the issues involved in this proceeding. Additionally, HRS failed to tender as witnesses either of the persons who actually rated the different applications at issue in this proceeding to prove up the contents of the State Agency Action Report. There was no theory of relevancy, therefore, offered by HRS in support of its tender of the State Agency Action Report into evidence, and that State Agency Action Report was properly excluded along with the other documents related to HRS' scoring system to reflect how HRS reached its preliminary determination in this de novo proceeding.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore,
RECOMMENDED that HRS enter a Final Order
Approving the application of HCR for a CON for 30 additional nursing home beds;
Approving the application of Manor Care for a CON for 30 additional nursing home beds;
Denying the application of Vari-Care for a CON for 26 additional nursing home beds; and
Denying the application of Whitehall for a CON for 27 additional nursing home beds.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd of January, 1990.
LINDA M. RIGOT
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1990.
APPENDIX TO RECOMMENDED ORDER
DOAH CASE NUMBERS 89-2502, 89-2504, 89-2505, 89-2506, and 89-2507
Health Quest's proposed findings of fact numbered 1, 2, 5, 6, 8, 10, 26, 28, and 31 have been adopted either verbatim or in substance in this Recommended Order.
Health Quest's proposed findings of fact numbered 3, 7, 27, and 32 have been rejected as unnecessary for determination of the issues involved in this proceeding.
Health Quest's proposed findings of fact numbered 4, 11-15, 21, 23-25, 29, 30, and 33-35 have been rejected as not being supported by the weight of the credible evidence in this proceeding.
Health Quest's proposed findings of fact numbered 9, 16-20, 22, and 36 have been rejected as being subordinate to the issues involved in this proceeding.
Health Quest's proposed findings of fact numbered 37 and 38 have been rejected as being immaterial to the issues involved herein.
Health Quest's proposed findings of fact numbered 39-48 have been rejected as not constituting' findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law.
Health Quest's proposed findings of fact numbered 49-79 have been rejected as being irrelevant to the issues involved in this proceeding.
HRS' proposed findings of fact numbered 1, 4, and 5 have been adopted either verbatim or in substance in this Recommended Order.
HRS' proposed findings of fact numbered 2 and 6 have been rejected as being unnecessary for determination of the issues involved in this proceeding.
HRS' proposed findings of fact numbered 3 and 7 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law.
HRS' proposed finding of fact numbered 8 has been rejected as being subordinate to the issues involved in this proceeding.
HRS' proposed finding of fact numbered 9 has been rejected as not being supported by the weight of the credible evidence in this proceeding.
HRS" proposed finding of fact numbered 10 has been rejected as being contrary to the weight of the credible evidence in this proceeding.
HCR's proposed findings of fact numbered 1-29 and 31-54 have been adopted either verbatim or in substance in this Recommended Order.
HCR's proposed finding of fact numbered 30 has been rejected as being irrelevant to the issues involved in this proceeding.
Vari-Care's proposed findings of fact numbered 1-3, 5-8, 13, 15, 18- 23, 31, 33, 34, 37, 38, 41 42, 48, 50-54, 58, 61, 64, 70, 75, 76, 78, 79, and 82 have been adopted either verbatim or in substance in this Recommended Order.
Vari-Care's proposed findings of fact numbered 4, 12, 24-27, 66, 69, 74, and 91 have been rejected as not being supported by the weight of the credible evidence in his proceeding.
Vari-Care's proposed findings of fact numbered 9-11, 28, 30, 40, 43, 44, 63, 77, 80, 84, 85, and 90 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law.
Vari-Care's proposed findings of fact numbered 14, 16, 32, 35, 36, 39, 45-47, 49, 59, and 73 have been rejected as being subordinate to the issues involved in this proceeding.
Vari-Care's proposed findings of fact numbered 17, 29, 55, 65, 67, 68, and 72 have rejected as being unnecessary for determination of the issues involved in this proceeding.
Vari-Care's proposed findings of fact numbered 56 and 81 have been rejected as being immaterial to the issues involved herein.
Vari-Care's proposed findings of fact numbered 57, 60, 62, 71, 83, and 86-89 have been rejected as being irrelevant to the issues involved in this proceeding.
Whitehall's proposed findings of fact numbered 39, 47, 75-77, 82, 84, 85, 93, 118, 119, 146, and 151 have been rejected as being immaterial to the issues involved herein.
Whitehall's proposed findings of fact numbered 1, 6, 11, 16, 21, 30, 34, 41, 48, 51, 54-56, 58, 59, 61, 65, 66, 74, 78, 88-90, 92, 96, 97, 99, 106, 121, 124, 126, 137, 139, 141, 142, 147, 148, and 150 have been adopted either verbatim or in substance in this Recommended Order.
Whitehall's proposed findings of fact numbered 2, 7-9, 12, 13, 17-19, 29, 31, 40, 43-46, 63, 64, 83, 86, 91, 107, 128, 131, 136, 140, and 152 have been rejected as not being supported by the weight of the credible evidence in this proceeding.
Whitehall's proposed findings of fact numbered 3, 50, 101, 111-117, 125, 129, 155, and 156 have been rejected as being irrelevant to the issues involved in this proceeding
Whitehall's proposed findings of fact numbered 20, 23-25, 27, 38, 42, 49, 52, 57, 60, 67, 69, 70, 72, 73, 79-81, 87, 94, 95, 98, 100, 102-105, 108- 110, 120, 122, 123, 127, 130, 134, 135, 143-145, and 149 have been rejected as being subordinate to the issues involved in this proceeding.
Whitehall's proposed findings of fact numbered 4 and 5 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law.
Whitehall's proposed findings of fact numbered 10, 22, 26, 28, 36, 37, 53, 62, 68, 71, 132, 133, 138, 153, and 154 have been rejected as being unnecessary for determination of the issues involved in this proceeding.
Whitehall's proposed findings of fact numbered 14, 15, 32, 33, and 35 have been rejected as being contrary to the weight of the credible evidence in this proceeding.
Manor Care's proposed findings of fact numbered 1, 2, 4, 5, 7-9, 11, 13-24, 27-37, 39, 40, 42, 43, 45, 47, 48, 50, 51, 53, 54, 57, 58, 60, 63, 64, 66, 69, 71-73, 75-78, 80, 81, 83, 89, 93-99, 102, 103, 107, 108, 110-113, 121, 130-141, 143-145, 147, and 149 have been adopted either verbatim or in substance in this Recommended Order.
Manor Care's proposed findings of fact numbered 3, 101, 104, 106, 117, and 148 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, recitation of the testimony, or conclusions of law.
Manor Care's proposed findings of fact numbered 6, 12, 38, 49, 55, 56, 59, 65, 67, 68, 74, 82, 90, 92, 100, 114, 116, and 118-120 have been rejected as being unnecessary for determination of the issues involved in this proceeding.
Manor Care's proposed findings of fact numbered 10, 26, 41, 44, 46, 52, 61, 62, 70, 79, 86-8, 105, 109, 115, 122, 142, 146, 150, and 151 have been rejected as being subordinate to the issues involved in this proceeding.
Manor Care's proposed findings of fact numbered 25, 84, 91, and 123-
129 have been rejected as being irrelevant to the issues involved in this proceeding.
Manor Care's proposed finding of fact numbered 85 has been rejected as being immaterial to the issues involved herein.
COPIES FURNISHED:
Samuel J. Dubbin, Esquire Gerald M.Cohen, Esquire STEEL HECTOR & DAVIS
4000 Southeast Financial Center Miami, Florida 33131-2398
Steven W. Huss, Esquire 1017 Thomasville Road Suite C
Tallahassee, Florida 32303
Charles M. Loeser, Esquire
315 West Jefferson Boulevard South Bend, Indiana 46601
Byron B. Mathews, Jr., Esquire 700 Brickell Avenue
Miami, Florida 33131
Richard Patterson, Esquire Department of Health and
Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, Florida 32308
James C. Hauser, Esquire Messer, Vickers, Caparello,
French & Madsen, P.A. Post Office Box 1876 Tallahassee, Florida 32302
Alfred W. Clark, Esquire Post Office Box 623 Tallahassee, Florida 32302
Sam Power, Agency Clerk Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
John Miller, General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32399-0700
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
HEALTH QUEST MANAGEMENT CORPORATION III,
vs. CASE NO.: 89-2502
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and WHITEHALL BOCA, AN ILLINOIS LIMITED PARTNERSHIP,
Respondents.
/ MANOR CARE OF BOCA RATON, INC., d/b/a MANOR CARE OF BOCA RATON,
Petitioner,
vs. CASE NO.: 89-2504
CON NO.: 5807
DEPARTMENT OF HEALTH AND 5807P REHABILITATIVE SERVICES and
VARI-CARE, INC. d/b/a BOULEVARD MANOR NURSING CENTER,
Respondents.
/
MANOR CARE OF BOCA RATON, INC., d/b/a MANOR CARE OF BOCA RATON,
Petitioner,
vs. CASE NO.: 89-2505
CON NO.: 5810
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES,
Respondent.
/
MANOR CARE OF BOCA RATON, INC., d/b/a MANOR CARE OF BOCA RATON,
Petitioner,
vs. CASE NO.: 89-2506
CON NO.: 5811
DEPARTMENT OF HEALTH AND 5811P REHABILITATIVE SERVICES and
WHITEHALL BOCA, AN ILLINOIS LIMITED PARTNERSHIP QUALIFIED TO DO BUSINESS IN FLORIDA,
Respondents.
/
MAPLE LEAF OF PALM BEACH COUNTY HEALTH CARE, INC.,
Petitioner,
CASE | NO.: | 89-2507 |
CON | NO.: | 5808 |
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES; VARI- CARE, INC.; and WHITEHALL BOCA, AN ILLINOIS LIMITED PARTNERSHIP,
Respondents.
/
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.
RULING ON EXCEPTIONS FILED BY THE DEPARTMENT
Counsel requests that Whitehall Boca's exceptions 1 through 16 and Vari-Care's exceptions I through VI be adopted (excluding only the last two
sentences in Vari-Care exception VI.) See the rulings on the exceptions filed by Whitehall Boca and Vari-Care.
Counsel excepts to the Hearing Officer's finding (finding of fact 8) that NCR will meet subacute standards because the Hearing Officer did not define subacute. Subacute services are described in detail in Maple Leaf Exhibit 1B, page 46A. The exception is denied. (T472 through T477).
Counsel excepts to the finding (finding of fact 20) that there were possible safety concerns with Vari-Care's design for showers. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (T531).
Counsel excepts to the Hearing Officer's conclusion in findings of fact
125 and 126 that Manor Care can add its proposed beds "at a relatively small cost". The Hearing Officer was simply commenting on the cost effectiveness of the Manor Care proposal. The findings are supported by competent, substantial evidence; therefore, the exception is denied.
Counsel excepts to the Hearing Officer's findings regarding Medicare. The Hearing Officer was simply noting that Manor Care proposes a full range of services to all patient population groups. The findings are relevant; the exception is denied.
Counsel excepts to finding of fact 145 that approval of Whitehall would not promote access to Palm Beach County or Florida residents. Whitehall's high charges, out of state marketing, and lack of service to Medicaid patients support this finding. The exception is denied.
Counsel excepts to finding of fact 151 regarding Whitehall's Medicare participation. The finding is supported by competent, substantial evidence; therefore, the exception is denied.
Counsel excepts to the last sentence of finding of fact 154 as vague and not supported by the record. The Hearing Officer is simply summarizing earlier findings which are supported by the record. The exception is denied.
Counsel excepts to portions of finding of fact 155 wherein the Hearing Officer compares services proposed by Whitehall and Manor Care. The finding is supported by competent, substantial evidence; therefore, the exception is denied.
Counsel excepts to the second sentence on page 57 and the fifth sentence on page 72. Comparative review is required when mutually exclusive applications are considered. Gulf Court Nursing Center vs. Department of Health and Rehabilitative Services, 483 So2d 700 (Fla. 1st DCA 1985).
In exceptions 12, 13, 14, 15, 16, 17, 18, and 19, counsel excepts to statements found in the Hearing Officer's conclusions of law which reiterate findings -of fact challenged by counsel. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Counsel excepts to the Hearing Officer's rejection as irrelevant, the evidence tendered by the department to explicate its method of review of the competing applications. The evidence code succinctly defines relevant evidence as "evidence tending to prove or disprove a material fact". Section 90.401, Florida Statutes (1989). Clearly, the evidence on the department's free form evaluation of the competing applications is relevant. After all, the decisions resulting from the free form evaluation are the subject of this 120.57 proceeding. The Hearing Officer's conclusion that the scoring system is contrary to the law is rejected. The scoring system is a laudable effort to enhance the objectivity of the evaluation process. I conclude that the error is harmless as the competing applications were evaluated under all applicable criteria in this 120.57 proceeding, the department's witness Ms. Gordon-Girvin,
testified at length regarding the competing applications, and the department did not seek to have the Hearing Officer rescore the applications.
RULING ON EXCEPTIONS FILED BY WHITEHALL BOCA (WHITEHALL)
Whitehall excepts to findings of fact 19, 52, and 55 regarding staffing and deficiencies in its application. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied. (See T917, T918, T1078; Whitehall Exhibit 3, Schedule 11; T1144 through T1150; T530, -T533; NCR Exhibit 1A, Schedule 11A for year ending 6/30/93).
Whitehall excepts to findings of fact 22 and 145 regarding location of nursing homes within Palm Beach county. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied. (See T391, T405, T419, and T439).
Whitehall excepts to finding of fact 15 that have patients have not been exposed to threat of significant harm in HCR facilities. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (See T532).
Whitehall excepts to finding of fact 26 regarding out of state marketing. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (See T898 through T900, T1061, T1062).
Whitehall excepts to finding of fact 53 regarding staffing. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (See T1028).
Whitehall excepts to finding of fact 54 regarding accommodation of ACLF residents and additional nursing home patients. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (See T1068 through T1073).
Whitehall excepts to finding of fact 148 where the Hearing Officer finds its proposal inconsistent with the local plan's recommendation that priority be given to proposals bringing facility capacity up to 120 beds. Whitehall seeks 27 beds which would bring its total to 100 beds. The exception is denied.
Whitehall excepts to finding of fact 9 where the Hearing Officer found HCR's total project costs to be the lowest. Whitehall did not except to finding of fact 47 where its total costs were found to be $1,368,188.00. The exception is denied.
Whitehall excepts to the Hearing officer's rulings on its proposed findings 22, 79, and 112. The proposed findings were properly addressed by the Hearing Officer. The exception is denied. Island Harbor Beach Club vs. Department of Natural Resources, 476 So2d 1350 (Fla. 1st DCA 1985).
Whitehall excepts to finding of fact 50 regarding its high rates. The finding is supported by competent, substantial evidence; therefore, the exception is denied. (T1114, T1142).
Whitehall excepts to finding of fact 155 regarding staffing. The finding is supported by competent, substantial evidence; therefore, the
exception is denied. (Whitehall Boca Number 31 Schedule 11A and Whitehall Boca Number 4, Schedule 11A).
Whitehall excepts to finding of fact 54. The finding is supported by
- competent, substantial evidence; therefore, the exception is denied. (T1063, T1064, T1068, T1114, T1115).
Exceptions 13, 14, and 15 reiterate exceptions to findings of fact and are denied.
Whitehall excepts to the Hearing Officer's conclusion that the SAAR and the scoring system were irrelevant. The Hearing Officer's conclusion is rejected. See paragraph 13 of the ruling on the HRS exceptions.
RULING ON EXCEPTIONS FILED BY VARI-CARE, INC. (VARI-CARE)
Vari-Care excepts to finding of fact 148 and related conclusions regarding consistency of the applications which the district health plan. Vari- Care maintains that the Hearing Officer deemphasized the local plan. The Hearing Officer described in detail the manner in which the applications addressed the local plan. The exception is denied.
Vari-Care excepts to findings of fact 4, 15, 16, 58, 93, 151 and related conclusions regarding the ability of the applicants to provide quality of care. There was conflicting evidence on this criteria. At this level of review, the department has no authority to reweigh the evidence. The challenged findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Vari-Care excepts to findings of fact 9 and 14 regarding project costs and financial feasibility. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Vari-Care excepts to findings of fact 22, 145, and 154 concerning geographic accessibility specifically, Vari- Care asserts that the Hearing Officer, for health planning purposes, divided Palm Beach County into three subdivisions. The Hearing Officer's observations regarding the clustering of nursing homes in certain areas do not constitute a subdivision of the county. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Vari-Care excepts to the Hearing Officer's findings in findings of fact 8, 78, 84 through 87, 91, 95, and 97 regarding the merits of its proposed subacute services. The findings are supported by competent, substantial evidence; therefore, the exceptions are denied.
Vari-Care exceptions to the Hearing Officer's findings regarding its Medicaid commitment and asserts that it is not within the Hearing Officer's province to judge the veracity of its commitment. The Hearing -Officer properly exercised her role as the fact finder in this 120.57 proceeding. Manasota vs. Department of Health and Rehabilitative Services, 523 So2d 710 (Fla. 1st DCA 1988). The exception is denied.
RULING ON EXCEPTIONS FILED BY MANOR CARE
Manor Care expresses its concurrence with the Recommended Order. Regarding the Hearing Officer's ruling excluding evidence of the department's scoring system, see paragraph 13 of the ruling on the department's exceptions.
RULING ON MOTIONS FILED BY MANOR CARE
The Motions to strike the exceptions of HRS, Whitehall, and Vari-Care are denied. In the future a request for extension of time for filing exceptions will not be entertained unless the attorney seeking the extension has contacted all other counsel. Counsel seeking the extension should ascertain whether his request is consented to or opposed. Reasonable requests for extension are normally granted and should be consented to as a matter of professional courtesy. The Motion to disqualify the agency clerk is without foundation and is denied.
FINDINGS OF FACT
The department hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order.
CONCLUSIONS OF LAW
The department hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order except where inconsistent with the rulings on the exceptions.
Based upon the foregoing, it is
ADJUDGED, that certificate of need (CON) application 5808 of Maple Leaf of Palm Beach County Health Care, Inc. for a 30 bed addition be APPROVED; that CON application 5810 of Manor Care of Boca Raton, Inc. for & 30 bed-addition be APPROVED; that CON application 5807 and 5807P of Vari-Care, Inc. are DENIED; and that CON application 5811 and 5811P of Whitehall Boca are DENIED.
DONE and ORDERED this 12th day of March 1990, in Tallahassee, Florida.
Gregory L. Coler Secretary
Department of Health and Rehabilitative Services
by Deputy 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:
Alfred W. Clark, Esquire 1725 Mahan Drive, Suite 300 Post Office Box 623 Tallahassee, FL 32308
James C. Hauser, Esquire MESSER, VICKERS, CAPARELLO FRENCH & MADSEN, P. A.
Post Office Box 1876 Tallahassee, FL 32302
Steven W. Huss, Esquire Attorney at Law
1017 Thomasville Road Suite C
Tallahassee, FL 32303
Byron B. Mathews, Esquire Paul Shelowitz, Esquire 700 Brickell Avenue
Miami, FL 33131
Samuel J. Dubbin, Esquire Gerald M. Cohen, Esquire STELL HECTOR & DAVIS
4000 SE Financial Center Miami, FL 33131-2398
Richard Patterson, Esquire Assistant General Counsel Department of Health and
Rehabilitative Services 2727 Mahan Drive
Fort Knox Executive Center Tallahassee, FL 32308
FALR
Post Office Box 385 Gainesville, FL 32602
Wayne McDaniel (PDDR) Susan Lincicome (PDRH)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail this 16 day of March 1990.
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
| Issue Date | Proceedings |
|---|---|
| Jan. 22, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 12, 1990 | Agency Final Order | |
| Jan. 22, 1990 | Recommended Order | In comparative review due to insufficient bed need to grant all applications HRS' practice of assigning scores to criteria irrelevant and illegal |
