STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COORDINATED CARE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-7563

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, ) FLORIDA CONVALESCENT CENTERS, ) INC., and MARRIOTT RETIREMENT ) COMMUNITIES, INC., )

)

Respondent. )

) HEALTH QUEST MANAGEMENT )

CORPORATION VII, )

)

Petitioner, )

)

vs. ) CASE NO. 90-7565

) MARRIOTT RETIREMENT COMMUNITIES, ) INC., FLORIDA CONVALESCENT ) CENTERS, INC., and DEPARTMENT ) OF HEALTH AND REHABILITATIVE ) SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing in the above-styled matter was held on May 20-22, and June 4-7, 1991, in Tallahassee, Florida, before Joyous D. Parrish, a designated Hearing Officer of the Division of Administrative Hearings. The parties have been represented in these proceedings as follows:

APPEARANCES

For Coordinated James M. Barclay Care, Inc.: Theodore E. Mack Cobb Cole & Bell

315 South Calhoun Street, Suite 500 Tallahassee, Florida 32301

For Health Quest Elizabeth McArthur

Management Aurell, Radey, Hinkle & Thomas Corporation VII: 101 North Monroe Street, Suite 1000

Post Office Drawer 11307 Tallahassee, Florida 32302

and Charles M. Loeser

315 West Jefferson Boulevard South Bend, Indiana 46601

For Florida Darrell White

Convalescent Gerald B. Sternstein Centers, Inc.: McFARLAIN, STERNSTEIN, WILEY

& CASSEDY, P.A.

Post Office Box 2174 Tallahassee, Florida 32316

For Marriott Donna Stinson

Retirement Thomas M. Beason Communities, Inc.: Moyle, Flanigan, Katz,

Fitzgerald & Sheehan, P.A.

118 North Gadsden Street, Suite 100 Tallahassee, Florida 32301

For Department Richard Patterson

of Health Assistant General Counsel and Rehabilitative Department of Health and Services: Rehabilitative Services

Fort Knox Executive Center 2727 Mahan Drive

Tallahassee, Florida 32308 STATEMENT OF THE ISSUES

The issues in these cases are as follows:

As to Case No. 90-7563:

Whether Coordinated Care Inc.'s (Coordinated Care) application for a certificate of need to construct and operate a new, 120 bed nursing home in Orange County, Florida, should be approved; and whether such applicant's proposal is superior, when comparatively reviewed, to the proposal submitted by Florida Convalescent Centers, Inc. (Florida Convalescent) which has been preliminarily approved by the Department of Health and Rehabilitative Services (Department).

As to Case No. 90-7565:

Whether Marriott Retirement Communities, Inc.'s (Marriott) application for a certificate of need for 39 beds to be operated in association with an adult congregate living facility should be approved as preliminarily decided by the Department as it meets statutory and rule criteria for approval; or, whether it should be denied based upon the challenge filed by Health Quest Management Corporation (Health Quest), an existing provider.

PRELIMINARY STATEMENT

These cases began on November 29, 1990, when the Department filed a notice of related petitions that listed the petitioners who had filed challenges to the proposed agency action which would award nursing home beds in Orange County, Florida (District 7). Those petitions challenged the agency's intended awards of 39 beds to Marriott and 60 beds to Florida Convalescent. More specifically, Central Park Lodges, Inc. (DOAH case no. 90-7562) filed a petition to contest the denial of its request for a certificate of need for a 120 bed community nursing home, to challenge the proposed awards to Marriott and Florida Convalescent, and to contend that, when comparatively reviewed with the other applicants in the batched group, its application should have been deemed superior to those granted.

Coordinated Care's petition (DOAH case no. 90-7563) also challenged the Department's decision to deny its application for a new, 120 bed nursing home and the Department's approval of Marriott and Florida Convalescent. A third petition, filed by Health Care and Retirement Corporation of America d/b/a Heartland of Orange County (DOAH case no. 90-7564), challenged the denial of its new, 120 bed nursing home and, similarly, contested the proposed awards to Marriott and Coordinated Care.

The petition filed by Health Quest (DOAH case no. 90-7565) was the only challenge submitted by an existing provider. Originally, Health Quest's petition objected to the approval of the certificates of need for Marriott and Florida Convalescent or any other application comparatively reviewed with them. Later, Health Quest dropped all of its challenges except as to Marriott.

Finally, Kellett Healthcare, Ltd. (DOAH case no. 90-7566) challenged the denial of its request for a 120 bed facility.

The petitions noted above were consolidated for formal hearing on December 21, 1990. At that time the cases were noticed for hearing for February 1, 4, 25, 28, and March 1, 1991. Following a motion for continuance which was agreed to by all parties, the cases were rescheduled for hearing May 13-17 and 20-21, 1991.

On April 9, 1991, Marriott filed a motion for partial dismissal which, in substance, argued that Marriott's application for a 39 bed certificate of need should not be comparatively reviewed with any other applicant in this batch since the award to Marriott would not, mathematically, eliminate another's opportunity for approval. The premise for the motion rested in the uncontested fact that the Department had identified a numeric need for 165 additional nursing home beds in district 7, Orange County, and that the need calculation had not been timely challenged by anyone. Therefore, since subtracting 39 from

165 would allow any one remaining applicant in this case to receive their requested number of beds, Marriott argued it was not required to compare its request with another. Initially, this motion was denied because it had not been established that none of the remaining applicants had sought a partial approval (some identifiable portion of the 120 beds). Thereafter, Marriott renewed its motion for partial dismissal and presented documentation to support the fact that none of the other applicants had applied for a partial approval. In each case, the other applicants were relying on their entire bed number request (Coordinated Care for 120 beds, Kellett Healthcare, Ltd. for 120, Health Care & Retirement Corporation of America for 120, and Florida Convalescent for 60). Based upon the foregoing, Marriott's renewed motion was granted. Thus, at hearing Marriott was only required to establish that its application complies with statutory or rule criteria for approval.

On April 24, 1991, Kellett Healthcare, Ltd. filed a notice of voluntary dismissal and withdrew its challenges. Consequently, that case was closed and jurisdiction relinquished to the Department. Shortly, thereafter, on May 1, 1991, Central Park Lodges, Inc., DOAH case no. 90-7562, filed its notice of voluntary dismissal. Accordingly, an order closing that file and relinquishing jurisdiction to the Department has been entered.

On May 8, 1991, Florida Convalescent filed a motion to consolidate that sought to consolidate a rule challenge (DOAH case no. 91-2823R) with the instant cases and alleged that the invalid rule had been utilized by the Department in rendering its decision in this case. That motion was denied. However, the rule challenge was scheduled to commence on the next day following the completion of these cases. Following hearing on a motion for continuance, these cases were rescheduled for May 20-21, and June 4-7, 1991.

Health Care and Retirement Corporation of America d/b/a Heartland of Orange County filed its notice of voluntary dismissal of petition for formal administrative proceeding on May 31, 1991. That case, DOAH case no. 90-7564, was subsequently closed with jurisdiction being relinquished to the Department.

At the hearing conducted on May 20-23, 1991, evidence was presented by Marriott and Health Quest. Having previously ordered that the Marriott application did not have to be comparatively reviewed against the other applicants in the batch, the issue raised in DOAH case no. 90-7565 became whether Marriott's application met the statutory and rule criteria for approval. Health Quest, as an existing provider, continued to contest the proposed award to Marriott but abandoned its challenge to the approval of Florida Convalescent's application.

On June 4-7, 1991, the remainder of the issues were addressed and evidence was presented by Coordinated Care, Florida Convalescent, and the Department. At the conclusion of the hearing in these cases, Florida Convalescent, ore tenus, voluntarily dismissed its rule challenge in DOAH case no. 91-2823R.

The transcript of these proceedings was filed with the Division of Administrative Hearings on July 15, 1991. Following a request for an extension of the time within which to submit proposed recommended orders, an order was entered directing the parties to file their proposed recommended orders by August 1, 1991.

Thereafter, all parties timely filed proposed recommended orders which have been considered in the preparation of this order. Specific rulings on the proposed findings of fact are included in the attached appendix.

Post-hearing motions were filed by Florida Convalescent (motion for summary recommended order), Coordinated Care (motion to dismiss FCC's application), Health Quest (motion for sanctions) and Marriott (motion for attorneys' fees).

The responses filed to those motions have also been reviewed. Coordinated Care also filed an amended and renewed motion for summary recommended order and motion to dismiss FCC's application on October 25, 1991. All of the foregoing motions are hereby denied.

FINDINGS OF FACT

Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made:

Case background and the parties:

1. The Department is the state agency charged with the responsibility of issuing, revoking, or denying certificates of need for health care facilities or services.

   
   

2. In that regard the Department has promulgated a rule for computing the need for new or additional community nursing home beds. The methodology of the rule (now Rule 10-5.036, Florida Administrative Code) calculates a specific number of beds anticipated to be needed for a given planning horizon.

   
   

3. Once calculated, the Department publishes the calculated need for the district/subdistrict. Additional beds are generally not authorized if their approval would cause the total number of beds approved to exceed the number of beds calculated to be needed under the rule. The Department is not, however, obligated to approve beds so that the total number of beds calculated to be needed are approved, i.e. the Department may, as in this case, approve only a portion of those beds thought to be needed.

   
   

4. In this case, the Department published a projected need for 165 additional beds in Orange County, Florida. That bed pool was calculated for the January, 1993 planning horizon and was published in the Florida Administrative Weekly on April 13, 1990.

   
   

5. The calculated need published in this case has not been challenged and, therefore, was not at issue in these proceedings.

   
   

6. At the time need was computed, there were 2,797 licensed beds in Orange County with an additional 505 approved nursing beds. The occupancy rate for the county was just under 93 percent.

   
   

7. Following the publication of the need figures, letters of intent and applications were filed by health care providers seeking to obtain approvals for the available nursing beds.

   
   

8. Coordinated Care, Inc. filed an application (CON #6287) for approval to develop a new, freestanding 120 bed community nursing home. The project was estimated to require a capital expenditure of $6,000,000 and would provide 24 beds in a subacute care unit.

   
   

9. Florida Convalescent Centers, Inc. filed an application (CON #6292) for approval to develop a 60 bed addition to its existing facility known as Palm Garden of Orlando (CON #2991). If approved, the total number of nursing beds for that facility would then be 120 beds. The project cost for the expansion was estimated at $1,648,638. It was proposed that financing and management for the facility would be provided by National HealthCorp., Ltd.

   
   

10. Marriott Retirement Communities, Inc. filed an application (CON #6290) for approval of a 39 bed community nursing home facility to be built as a component of a retirement community to be known as Brighton Gardens Nursing Center. The project cost for the Marriott proposal was $2,613,919.

11. The Department's preliminary action in this case was to grant the CONs requested by Marriott and Florida Convalescent and to deny the application filed by Coordinated Care.

    
    

12. Health Quest Management Corporation VII (Health Quest) operates an existing 120 bed nursing home in Orange County, Florida. That nursing home is known as Regents Park. Health Quest also operates Regents Woods, an adult congregate living facility, in Orange County. Health Quest opposes the proposed approval of CON #6290 for Marriott.

    
    

13. Coordinated Care opposes the proposed approval of CON #6292 for Florida Convalescent and affirmatively alleges it is entitled, as the superior co-batched applicant, to the approval of its application.

    
    

14. The petitions filed by Coordinated Care and Health Quest challenging the Department's preliminary action were timely.

    
    

    As to Case no. 90-7563:

    
    

15. At the outset of the hearing, the parties stipulated that the following review criteria found in Section 381.705, Florida Statutes, were not at issue or were inapplicable to this case: Subsections 381.705(1)(d),(e),(f),(g),(j),(k),(m), and (2)(b) and (c).

    
    

16. As to all other relevant criteria, Florida Convalescent and Coordinated Care were comparatively reviewed for CON approval by the Department and are so reviewed in this order.

    
    

17. Florida Convalescent is a nursing home company currently operating twelve nursing homes in Florida, including Palm Garden of Orlando (Palm Garden).

    
    

18. Palm Garden is a 60 bed facility that was constructed according to a

    120 bed prototype. The facility was designed to have three sections: two 60 bed patient wings and a center, nonliving area for the operations of the facility. The kitchen, dining room area, therapy spaces, office spaces and open areas have already been constructed and are currently utilized for the existing 60 bed unit. The approval of the CON here would allow the completion of the final 60 bed wing.

    
    

19. Palm Garden is managed by National Healthcorp, Ltd. (National), a nursing home company headquartered in Murfreesboro, Tennessee. National provides financial, developmental, and management services to nursing home companies in nine states. National prepared the CON application in this case on behalf of Florida Convalescent. If approved, National will continue to manage the Palm Garden facility in Orlando.

    
    

20. As part of the 60 bed extension, Palm Garden will have specialized programs for Alzheimer's patients, subacute care, and special respite care. The approval of the 60 extension will allow these programs to be expanded and Florida Convalescent has indicated its willingness to accept as a condition of its CON an obligation to provide such special care programs.

    
    

21. Currently, the profile of Palm Garden patients can be summarized as follows: 70 percent Medicaid, 25 percent private pay, and 5 percent Medicare. Florida Convalescent has agreed to commit to providing 58 percent of its services to Medicaid patients, and has indicated its willingness to accept as a condition of its CON such a provision.

22. National has agreed to finance 1.6 million dollars of expenses for the Florida Convalescent proposal. The total project cost associated with the proposal is $3,333,119.

    
    

23. Coordinated Care is a management company whose principals, Fred A. Lane and Patricia Lane, his wife, operate four nursing home facilities in Volusia County, Florida.

    
    

24. If approved, Mr. Lane will administer Coordinated Care's facility in Orange County.

    
    

25. It is proposed that the Coordinated Care facility will have 120 beds with a 24 bed subacute unit. The subacute unit will provide care for AIDS patients, ventilator dependent patients, and IV therapy.

    
    

26. Additionally, the Coordinated Care proposal offers a program for mentally impaired patients including those with Alzheimer's and will also offer a respite care program.

    
    

27. Coordinated Care is willing to accept as conditions on its certificate of need the following commitments: to exceed minimums on direct care staff to patient ratios by 10 percent; to provide service to AIDS patients; to offer 48 percent Medicaid and 15 percent Medicare; and to provide the subacute programs previously described.

    
    

28. The Department's District 7, subdistrict Orange County, has a need for additional nursing home beds.

    
    

29. The District 7 Local Health Plan cites recommendations regarding new nursing home beds for the District. Those recommendations speak to the needs of the District as a whole and are not ranked by priority of interest.

    
    

30. In this case, both applicants, Coordinated Care and Florida Convalescent, will provide nursing services to AIDS patients.

    
    

31. The Coordinated Care application recognized the need for a staff education program to provide AIDS training and committed the applicant to provide care for AIDS patients.

    
    

32. The Florida Convalescent application did not address AIDS patients specifically because no AIDS patient has sought admission at the existing facility. Florida Convalescent will conduct staff education for AIDS patients, however, and will not deny admission to AIDS patients.

    
    

33. Both Coordinated Care and Florida Convalescent will provide, and will commit to provide, specific levels of Medicaid patients. In this context, Florida Convalescent's history (63 percent) and proposed commitment (58 percent) to Medicaid utilization is greater than that offered by Coordinated Care (48 percent).

    
    

34. With regard to indigent or charity care, Florida Convalescent currently provides such care at Palm Garden of Orlando.

35. Both Coordinated Care and Florida Convalescent have demonstrated a commitment to high quality nursing home care. Palm Garden of Orlando is a superior rated nursing home and has, additionally, established a high quality service rating among homes managed by National. Similarly, the Lane family homes have experienced superior ratings and are committed to quality care.

    
    

36. Both Coordinated Care and Florida Convalescent have demonstrated good track records for employee recruitment, training, and benefits. Additionally, the salary and bonus offers make both providers an attractive employer. Palm Garden of Orlando currently has ties to nursing programs in the Orlando area and is close geographically to Valencia Community College and the University of Central Florida. It is anticipated that Coordinated Care will be able to establish such ties in the Orlando area since it has done so in Volusia County.

    
    

37. Both Florida Convalescent and Coordinated Care have demonstrated that their proposals in Orange County meet the State Health Plan preferences.

    
    

38. By virtue of it being an existing provider, it is anticipated that Florida Convalescent will lower its administrative costs with the addition of 60 beds since there is recognized an economy of scale at that level.

    
    

39. There is no demonstrated problem related to availability, accessibility, extent of utilization, or adequacy of nursing care services in this case.

    
    

40. It is likely that resources, including health care manpower, will be available for project accomplishment and operation.

    
    

41. Both applicants have demonstrated the immediate and long-term financial feasibility of the proposals.

    
    

42. It is anticipated that the addition of 60 beds to the Florida Convalescent facility will have the least impact on the costs of providing health services and will promote cost-effectiveness.

    
    

43. It is anticipated that the Florida Convalescent's proposal will best provide services to Medicaid patients and the medically indigent.

    
    

44. The Florida Convalescent expansion is the most efficient and more appropriate alternative for providing nursing home services.

    
    

45. The Florida Convalescent expansion will minimize the numbers of patients who were not admitted because of lack of beds at the Palm Garden facility.

    
    

46. The Florida Convalescent expansion is consistent with other agencies and is in compliance with the local plans for providing long term care.

    
    

47. The application submitted by Florida Convalescent was complete and its consolidated financial statement was consistent with the Department's rules and policies.

    
    

48. The consolidated financial statement submitted by Florida Convalescent was prepared in accordance with generally accepted accounting principles and is sufficient for all purposes for which such statements are required by the Department.

49. Florida Convalescent has demonstrated it has the financial resources to accomplish the project expansion and that the methods of construction, including equipment costs, are reasonable.

    
    

50. On balance, when comparatively reviewed, the application submitted by Florida Convalescent is superior to the proposal submitted by Coordinated Care.

    
    

    As to Case No. 90-7565

    
    

51. Marriott filed an application for a certificate of need, designated by the Department CON # 6290, to construct a 39 bed nursing unit to be built in conjunction with an 133 bed adult congregate living facility (ACLF) in Orange County, Florida.

    
    

52. The Marriott proposal in this case is based upon a design it has utilized before and is commonly known as a "Brighton Gardens" project.

    
    

53. In accordance with Department statutes and rules, a certificate of need (CON) is necessary in order for Marriott to pursue the nursing component of its project. A CON is not required for the ACLF component.

    
    

54. The Marriott project will be financed by its parent company. That Marriott entity has $400 million in cash or cash equivalents, generates $600 million annually in cash flow, and can easily afford the project addressed by this application.

    
    

55. The Marriott proposal substantially meets the preferences and recommendations of the State and Local Health Plans.

    
    

56. The Marriott proposal specifies 30 percent of its patient days will be available for Medicaid patients.

    
    

57. Marriott is able to provide a high quality of care.

    
    

58. The Marriott proposal will establish links with the nursing school community so that recruitments and staffing may be enhanced. Additionally, Marriott will offer continuing education for staff with reasonable salary and benefit opportunities.

    
    

59. The costs of construction for the Marriott proposal are reasonable, allocated appropriately between the nursing facility and the ACLF, and meet or exceed all applicable code requirements. Both as to the manner of allocation and costs of allocation, Marriott has disclosed sufficient detail to adequately assess the nursing component of its proposed development.

    
    

60. Marriott's proposed project both in the immediate and long-term is financially feasible.

    
    

61. The granting of Marriott's proposal will not adversely affect Health Quest's ability to recruit personnel.

    
    

62. The granting of Marriott's proposal will not adversely affect Health Quest's rate of occupancy.

63. If Health Quest's occupancy should decrease following the approval of Marriott's request, such result is not attributable to the approval since Health Quest currently has a lower than district average for occupancy and since Health Quest currently charges more than the average amount charged by other nursing facilities. The number of beds requested by Marriott represents approximately 1 percent of the total number of beds currently approved in Orange County.

    
    

64. Marriott's application substantially complies with all review criteria set forth in Chapter 381, Florida Statutes.

    
    

    CONCLUSIONS OF LAW

    
    

65. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings.

    
    

66. Applicants in certificate of need proceedings bear the burden of establishing that their applications meet the relevant statutory and rule criteria for approval. In instances where two applicants vie for the same beds, those applicants are comparatively reviewed to determine which, on balance, best meet the applicable criteria.

    
    

67. As to CON #6290, Marriott has established that it complies with the criteria addressed in Chapter 381, Florida Statutes. Marriott is committed to providing a high quality of care, has the ability to recruit and train personnel, has financial resources to meet the challenges posed by its intended development, has shown such proposal to be financially feasible, and has shown that the costs associated with the proposal are reasonable. On the other hand, Health Quest has not demonstrated that the Marriott proposal, constituting only

    1 percent of the total nursing beds, will likely adversely affect its existing nursing facility.

    
    

68. With regard to the proposals submitted by Florida Convalescent (CON #6292) and Coordinated Care (CON #6287), while both applicants have submitted deserving projects, on a comparative basis, the proposal submitted by Florida Convalescent best meets the criteria for approval. Florida Convalescent has a higher commitment to Medicaid patients and with the expansion of 60 additional beds will offer a higher efficiency to its existing, highly utilized and superior rated facility.

RECOMMENDATION

Based on the foregoing, it is recommended that the Department of Health and Rehabilitative Services enter a final order approving the applications filed by Marriott and Florida Convalescent, denying the application of Coordinated Care, and dismissing the petition filed by Health Quest.

RECOMMENDED this 31st day of October, 1991, in Tallahassee, Leon County, Florida.

JOYOUS D. PARRISH

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32301

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NOS. 90-7563 and 90-7565 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT:

1. Paragraphs 1 through 5 are accepted.

2. The first sentence of paragraph 6 is accepted; the remainder of the paragraph is not a statement of fact.

3. Paragraphs 7 through 13 are accepted.

4. With the deletion of the word "well" in the last sentence, paragraph 14 is accepted.

5. Paragraph 15 is accepted.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY MARRIOTT:

1. Paragraphs 1 through 3 are accepted.

2. With the clarification that at most 120 beds are in dispute, paragraph

   4 is accepted.

3. With regard to paragraph 5 it is accepted that Marriott's application is consistent with the state and local health plans; otherwise rejected as irrelevant.

4. Paragraphs 6 through 8 are accepted.

5. With regard to paragraph 9, it is rejected as argument or response to a position argued by Health Quest. The weight of the credible evidence showed that Marriott appropriately disclosed its projects and that it will be able to finance the project which is at issue.

6. Paragraphs 10 through 19 are accepted.

7. With the exception of the last sentence which is accepted; paragraph 20 is rejected as irrelevant.

8. Paragraphs 21 through 23 are accepted.

9. The first sentence of paragraph 24 is accepted, the remainder rejected as irrelevant.

10. The first two sentences of paragraph 25 are accepted; the remainder rejected as irrelevant or argument.

11. With the deletion of the words "by far" which are rejected as argument, paragraph 26 is accepted.

12. With the deletion of the words "serious" and "numerous" which are rejected as contrary to the weight of the evidence, paragraph 27 is accepted.

13. Paragraph 28 is rejected as contrary to the weight of the evidence.

14. Paragraphs 29 and 30 are accepted.

15. Paragraphs 31 through 33 are rejected as argument, contrary to the weight of the evidence, or irrelevant. It is not found, however, that Health Quest will suffer adversely from the approval of Marriott's application, to the contrary it will not.

16. Paragraph 34 is accepted.

17. Paragraphs 35 and 36 are rejected as argument.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY HEALTH QUEST:

1. Paragraphs 1 through 3 are accepted.

2. Paragraph 4 (a) is accepted.

3. Paragraphs 4 (b), 4 (c), and 4 (d) are rejected as contrary to the weight of the evidence.

4. Paragraphs 5 and 6 are accepted.

5. With regard to paragraph 7, it is rejected as irrelevant or argument; in this case Marriott has allocated and identified appropriately to establish the support areas needed for the nursing component of its proposal. Those areas have been computed in the cost and fairly and reasonably been considered in the financial feasibility of the project.

6. To the extent addressed in the findings of fact or as accepted elsewhere in this appendix, paragraphs 8 through 36 are accepted, otherwise rejected as contrary to the weight of the evidence or irrelevant. It is specifically found that Marriott appropriately and accurately disclosed and allocated costs of the nursing facility and that those costs fairly depict the expenses reasonably expected to be incurred by this project. As to the suggestion by Health Quest that Marriott's proposal could not survive as a stand alone facility, such suggestion is rejected as irrelevant given the total circumstances and financial disclosures made in this case.

7. Paragraph 37 is accepted.

8. Paragraph 38 is rejected as contrary to the weight of the evidence, hearsay, or not supported by the evidence in this case.

9. Paragraphs 39 through 147 are rejected as recitation of testimony, irrelevant, argument, contrary to the weight of credible evidence or not supported by the evidence in this case.

10. Paragraph 148 is accepted.

11. Paragraph 149 is rejected as contrary to the weight of the evidence or irrelevant.

12. Paragraphs 150 through 169 are rejected as irrelevant, contrary to the weight of the evidence, or not supported by the evidence.

13. Paragraphs 170 through 179 are accepted.

14. Paragraph 180 is rejected as irrelevant.

15. Paragraphs 181 through 185 are rejected as irrelevant, argument, or contrary to the weight of the evidence.

16. Paragraph 186 is accepted.

17. Paragraph 187 is rejected as irrelevant.

18. Paragraph 188 is accepted.

19. Paragraphs 189 through 199 are rejected as contrary to the weight of the evidence, irrelevant, or argument. It is found that the allocations of space and costs in this case accurately describe the project and would allow for the financial feasibility of the nursing component.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY COORDINATED CARE:

1. Paragraphs 1 through 3 are accepted.

2. With regard to paragraph 4 it is accepted that the mathematical calculations are correct but such are not depositive of this case.

3. Paragraph 5 is accepted.

4. With the deletion of the phrase "Contrasted to the management style of FCC, which does not manage any of its facilities," which is rejected as argument or irrelevant, paragraph 6 is accepted.

5. Paragraphs 7 through 21 are accepted.

6. Paragraph 22 is rejected as contrary to the weight of the evidence.

7. Paragraph 23 is rejected as irrelevant.

8. Paragraph 24 is rejected as irrelevant.

9. The first two sentences of paragraph 25 are accepted; the remainder is rejected as contrary to the weight of the evidence presented, irrelevant, or unsupported by the record.

10. Paragraphs 26 through 31 are accepted.

11. Paragraph 32 is rejected as repetitive.

12. Paragraph 33 is rejected as repetitive.

13. Paragraphs 34 through 36 are accepted.

14. Paragraph 37 is rejected as repetitive.

15. Paragraphs 38 through 44 are rejected as contrary to the weight of the evidence, irrelevant, or, where accurate as to fact, considered to be not dispositive of the issues of this case.

16. Paragraph 45 is accepted.

17. Paragraph 46 is accepted (assuming numbers have been rounded off).

18. Paragraph 47 is rejected as contrary to the weight of the evidence.

19. Paragraphs 48 and 49 are accepted.

20. Paragraphs 50 through 64 are rejected as irrelevant, contrary to the weight of the evidence presented or argument.

21. Paragraphs 65 and 66 are accepted.

22. Paragraphs 67 through 72 are rejected as argument, irrelevant, or contrary to the weight of the evidence.

RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY FLORIDA CONVALESCENT CENTERS:

1. Paragraphs 1 through 19 are accepted.

2. Paragraph 20 is rejected as argument.

3. Paragraphs 21 through 24 are accepted.

4. Paragraph 25 and 26 are rejected to the extent that they suggest the Palm Garden facility enjoys a higher quality of care than the Lane family facilities. Both applicants provide a high quality of care and must be ranked equally in this regard. It is expected that the expansion of Palm Garden will assure that facility's continued high care and only to that extent has Palm Garden been considered the better applicant in this batch.

5. Paragraph 27 is accepted to the extent it details the history of Florida Convalescent, otherwise rejected as irrelevant or contrary to the weight of the evidence.

6. Paragraphs 28 and 29 are rejected as irrelevant.

7. Paragraph 30 is accepted to the extent that it suggests both Florida Convalescent and Coordinated Care have established good recruitment and training programs, etc. To the extent that Florida Convalescent is already established in the Orlando community it is advantaged; but, it is expected that Coordinated Care will be able to duplicate its efforts and successes (as in Volusia) in the Orange County venue. It is because it has an established program that Florida Convalescent gets the nod in this category.

8. Paragraphs 31 through 38 are accepted.

9. Paragraph 39 is accepted to the extent that it states both applicants have superior programs and quality of care; otherwise, rejected as contrary to the weight of the evidence.

10. With regard to paragraphs 40 through 42 it is found that both applicants meet the preferences addressed in the state health plan and that neither ranks higher in the categories listed in these paragraphs.

11. Paragraphs 43 through 45 are accepted.

12. Paragraph 46 is rejected as contrary to the weight of the evidence.

13. Paragraphs 47 (all subparts) through 52 are accepted.

14. The first sentence of paragraph 53 is accepted; the remainder is rejected as contrary to the weight of the evidence or irrelevant.

15. Paragraphs 54 through 74 are accepted.

16. Paragraphs 75 through 91 are rejected as contrary to the weight of the evidence or irrelevant.

17. Paragraphs 92 through 109 are accepted.

COPIES FURNISHED:

James M. Barclay Theodore E. Mack Cobb Cole & Bell

315 South Calhoun Street Suite 500

Tallahassee, Florida 32301

Elizabeth McArthur

Aurell, Radey, Hinkle & Thomas

101 N. Monroe Street Suite 1000

Post Office Drawer 11307 Tallahassee, Florida 32302

Charles M. Loeser

315 West Jefferson Boulevard South Bend, Indiana 46601

Darrell White

Gerald B. Sternstein McFARLAIN, STERNSTEIN, WILEY

& CASSEDY, P.A.

Post Office Box 2174 Tallahassee, Florida 32316-2174

Donna Stinson Thomas M. Beason

Moyle, Flanigan, Katz, Fitzgerald & Sheehan, P.A.

118 North Gadsden Street Suite 100

Tallahassee, Florida 32301

Richard Patterson Assistant General Counsel Department of Health and Rehabilitative Services Fort Knox Executive Center 2727 Mahan Drive

Tallahassee, Florida 32308

Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-007563

Orders for Case No: 90-007563