STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MANOR CARE OF BOYNTON BEACH, ) INC. d/b/a MANOR CARE-SARASOTA ) COUNTY, )
)
Petitioner, )
vs. ) CASE NO. 93-2562
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION and ARBOR HEALTH ) CARE COMPANY, )
)
Respondent. )
)
RECOMMENDED ORDER
This case was heard by Eleanor M. Hunter, the Hearing Officer designated by the Division of Administrative Hearings, on March 3, 1994, in Tallahassee, Florida.
APPEARANCES
For Petitioner, James C. Hauser, Attorney Manor Care of Boynton Lauchlin T. Waldoch, Attorney Beach, d/b/a Manor Post Office Box 1876
Care-Sarasota County: Tallahassee, Florida 32301
For Respondent, John L. Wharton, Attorney Arbor Health Care Chris Bentley, Attorney Company: Diane D. Tremor, Attorney
2548 Blairstone Pines Drive Tallahassee, Florida 32301
For Respondent, Richard Patterson, Senior Attorney Agency For Health Agency for Health Care Administration Care Administration: 325 John Knox Road, Suite 301
Tallahassee, Florida 32303-4131 STATEMENT OF THE ISSUES
Whether Arbor Health Care Company's certificate of need application to construct a nursing home in Sarasota County meets the minimum content requirements for listing the applicant's capital projects.
PRELIMINARY STATEMENT
In May, 1993, Manor Care of Boynton Beach, Inc., d/b/a Manor Care-Sarasota County ("Manor Care") filed a petition challenging the Agency For Health Care Administration's ("AHCA's") proposed denial of its application for nursing home beds in Sarasota County, and proposed approval of one filed by Arbor Health Care Company ("Arbor"). On July 26, 1993, Manor Care filed a Motion For Summary
Recommended Order Dismissing Arbor for failing to meet minimum content application requirements for listing and disclosing capital projects. AHCA filed a response in support of Manor Care's motion, and Arbor filed a response asserting that summary disposition was not possible due to numerous disputed factual issues. Manor Care initially noticed its motion for an evidentiary hearing on August 17, 1993. Upon joint motions of the parties, the hearing was rescheduled several times and ultimately was held on March 3 and 4, 1994.
Manor Care's Motion specifically asserted that Arbor's list of capital projects was incomplete because it did not include pending CON applications for nursing homes in Orange, Alachua, and Pinellas Counties, each of which was preliminary denied by AHCA and was the subject of pending administrative litigation.
At the hearing, Manor Care presented the testimony of Elizabeth Dudek of AHCA, expert in health care planning and CON review. Manor Care also submitted exhibits 1-15, which were received in evidence, except exhibits 1 and 15.
Ruling was reserved of the admissibility of exhibit 15 as a rebuttal exhibit. Those portions of Manor Care exhibit 15, designated on the record as rebuttal evidence, are received in evidence.
Arbor presented the testimony of Stephen Bennett, Arbor's Senior Vice President for Development, and exhibits 1-5, which were received in evidence.
The transcript of the evidentiary hearing was received on March 14, 1994. Post-hearing memoranda, briefs or proposed recommended orders originally were due 10 days later.
Arbor filed a motion, on March 15, 1994, to reopen the record for the receipt of new evidence. The evidence, as described by Arbor, was a Notice of Proposed Rules published by AHCA on March 11, 1994, in which AHCA proposed to amend the definition of a "capital project." Florida Administrative Weekly, Volume 20, Number 10, at pages 1434-35. The testimony in this proceeding includes AHCA's representative's admission that the rules are "not well crafted." See, Finding of Fact 7, infra.
On March 29, 1994, Arbor filed a second Motion to reopen the record for the receipt of new evidence. The evidence sought to be admitted was a State Agency Action Report dated March 11, 1994, which according to Arbor, demonstrates that AHCA, in the most recent nursing home batching cycle, accepted and comparatively reviewed an application which omitted seven denied-but-in-litigation CONs with project costs exceeding over $31.7 million. AHCA has the opportunity, in entering a final order in this case to reflect any different policy adopted subsequent to this proceeding.
Arbor's two motions to reopen the record were denied by order dated March 30, 1994, and the parties were required to file their post-hearing submittals on or before April 11, 1994. The parties timely filed their proposed orders, and rulings on the parties' proposed Findings of Fact are found in the Appendix to this order.
FINDINGS OF FACT
Arbor Health Care Company ("Arbor") and Manor Care of Boynton Beach, Inc. d/b/a Manor Care-Sarasota County ("Manor Care"), filed competing applications for a certificate of need ("CON") to build an 81-bed nursing home in Sarasota County, Agency for Health Care Administration ("AHCA") District 8, Subdistrict 6.
Arbor's application was subsequently designated CON No. 7144. The deadline for Arbor's letter of intent was November 2, 1992. Schedule 2 of the CON application form requires a listing of all the applicant's "capital projects and expenditures approved, under development, or planned." Under that heading, the directions are as follows:
Complete the following on all capital projects, acquisitions and expenditures whether or not the state in which activity occurs has a certificate of need or capital expenditure review program pursuant to Section 1122 of
the Social Security Act. (All expenditures capitalized according to generally accepted accounting principals).
On June 4, 1992, Arbor applied for CON No. 7020 for a 120-bed nursing home in Orange County for $5.8 million. AHCA preliminarily denied the application and Arbor filed a Petition on October 22, 1992, challenging AHCA's action. The Division of Administrative Hearings ("DOAH") received the Petition on November 12, 1992. The Orange County project costs were not included on Schedule 2 of the application for CON No. 7144, the Sarasota application.
On June 4, 1992, Arbor also applied for CON No. 6981 for a 120-bed nursing home in Alachua County, estimated at a cost of $5.4 million. After AHCA's preliminary denial, Arbor filed a Petition on October 22, 1992, challenging the denial. That petition was forwarded to DOAH on November 5, 1992. The Alachua County project costs were not included in total costs on Schedule 2 of the Sarasota application.
Arbor applied for CON No. 6850 in December 1991, to build a nursing home in Pinellas County for $5.0 million. Arbor's petition to challenge AHCA's preliminary denial was filed on April 15, 1992, and received at DOAH on May 11, 1992. Arbor's Pinellas County project was approved as a result of a June 22, 1993 settlement agreement.
On Arbor's Sarasota CON application total capital projects costs omitted for denied-but-in-litigation CON applications were over $16 million as compared to total capital projects reported of $66.8 million.
AHCA was a party to the litigation involving Arbor's Orange, Alachua and Pinellas Counties projects. AHCA's representative also conceded that information other than that included in the application can be utilized in the review process. Further, AHCA's representative admitted that the rule defining capital projects is "confusing" and "not well crafted."
The Sarasota application does include over $14 million designated on schedule 2 for "equipment/furnishing" and "renovations," which Arbor asserts it did not have to report to AHCA. In a subsequent batching cycle, Arbor reported denied-but-in-litigation CONs as capital projects.
In 1992, Arbor owned 23 or 24 nursing homes. The $14 million reported on the schedule is an estimate of the costs for routine capital expenditures at the existing nursing homes. As of the November 1992 letter of intent deadline, Arbor was close to the end of its 1992 fiscal year which coincides with the calendar year. Arbor reported that it expected capital expenditures of over $4 million for 1993, with the balance of $10 million for 1994-1996 capital expenditures. Arbor's Senior Vice President for Development testified that the projected expenditures are accurate, but were not finally approved by the Board of Directors until February or March 1993. His testimony and the evidence indicate, however, that others in the corporate structure, particularly the Executive Committee of the Board, give final approval to execute capital projects, subject only to formal retroactive ratification by the Board. Arbor failed to demonstrate what portion of the capital expenditures listed were subject to final approval by the Board, or to retroactive ratification of delegated final authority.
The evidence indicates that Arbor's Board approved capital projects during 1992, other than those approved in February of that year, which were not included on Schedule 2 of the Sarasota application. Arbor failed to offer any explanation for those omissions. There was no evidence that Arbor's financial resources are insufficient to meet all of its planned or pending capital projects expenditures.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this case, pursuant to subsections 120.57(1) and 408.039(5) Florida Statutes.
Arbor has the burden to demonstrate that it is entitled to the certificate of need. Florida Department of Transportation v. J.W.C. Co., 396 So.2d 778 (Fla. 1st DCA 1981), Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 475 So.2d 260 (Fla. 1st DCA 1985).
Subsection 408.037(2)(a), Florida Statutes, provides that a CON application shall contain:
A complete listing of all capital projects, including new health facility development projects and health facility acquisitions applied for, pending, approved, or underway in any state at the time of application, regardless of whether or not that state has a certificate of need program or a capital
expenditure review program pursuant to section 1122 or the Social Security Act. The department may, by rule, require less-detailed information from major health care providers.
The listing shall include the applicant's actual or proposed financial commitment to those projects and assesment of their impact on the applicant's ability to provide the proposed project. (Emphasis Added.)
Rule 59C-1.008(5)(h) also describes what capital project should be listed:
(h) To comply with section 408.037(2)(a), F.S., requiring a listing of all capital projects as defined in rule 59C-1.002(9), F.A.C., the applicant shall, consistent with the applicant's capitalization policies, provide the total approximate amount of capital projects approved via authorization to execute or underway at the time of the letter of intent deadline or state there
are none.
By rule, AHCA has adopted the following definitions of "capital expenditure" and "capital project":
"Capital expenditure" means an expenditure, including an expenditure for a construction project undertaken by a health care facility as its own contractor, which, under generally accepted accounting principles, is not properly chargeable as an expense of operation and maintenance; . . .
"Capital project" means a project involving one or more expenditures which has received final approval via authorization to execute for which capitalization will be required under generally accepted accounting principles. For the purpose of this definition, final approval includes letters of intent to issue a certificate of need issued by the agency. (Emphasis Added.)
The first sentence of the definition of "capital project," as interpreted by the agency, means a project approved according to an applicant's own internal processes. These include projects which require CONs, including board resolutions authorizing CONs, and those which are CON exempt. That interpretation has been applied to projects under considertion at various stages from feasibility studies, architectural design, construction document review, and projected future repairs and renovations. Central Florida Regional Hospital, Inc. v. HRS, 13 FALR 350 (F.O. 12/28/90). Arbor notes that AHCA's interpretation of the first sentence, however, renders the second sentence meaningless, unless it is intended to exclude those projects that AHCA has preliminarily denied. Arbor's assertion is rejected. AHCA's statement that "final approval" includes intents to issue CONs does not equate to an exclusion of projects in litigation as a result of intents to deny CONs.
Arbor's suggestion that AHCA should check within the agency to determine pending litigation in which AHCA is a necessary party, is rejected. The applicant alone bears the burden of meeting the minimum content requirements of the application. If the applicant omits capital projects, then its assessment of the impact of those projects on the proposed project would be understated and unreliable. An applicant's affirmative demonstration of its ability to finance a project and the project's financial feasibility is required. The importance of statutory application content requirements which permit an assessment of the applicant's financial condition was discussed in
Humhosco v. HRS, 561 So.2d 388 (Fla. 1st DCA 1990). The fact that AHCA, for other purposes, such as computation of fixed need pools and applications for additional beds, treats intents to approve differently from intents to deny, does not have any bearing on the statutory requirement for application content.
Arbor argues that at the time of the letter of intent deadline, there was no "final approval via authorization to execute" any capital expenditures for its 1993, 1994, 1995 and 1996 fiscal years. The earliest approval by Arbor's board was in February 1993, for the 1993 fiscal year budget. The evidence is to the contrary. In addition, AHCA has ruled on very similar facts, as follows:
The exception to the Hearing Officer's finding and conclusion that Palms improperly omitted capital expenditures for fiscal years 1994
and 1995 is denied. According to its own internally-generated document, Palms had projected capital expenditures for numerous capital projects extending into 1994 and 1995. These projects can only be characterized as capital projects that were "pending" or "underway" as of the application deadline.
As such, the "total approximate cost" of those projects must have been included per Section 408.037(2)(a), Florida Statutes, and Rule
59C-1.008(5)(h), Florida Administrative Code. This legal requirement is not changed by the fact that Palms happens to have an internal corporate policy of adopting capital budgets one year at a time.
NME Hospitals, Inc. d/b/a Palms of Pasadena Hospital v. AHCA, et al., DOAH Case Nos. 93-4897 and 93-5396 (F.O. 3/11/94).
Arbor's argument that fiscal years 1993, 1994, 1995 and 1996 estimated budgets for renovations and capital expenditures are not "finally approved" and need not be included in Schedule 2 is rejected. A "capital project" refers to the totality of planned or pending changes to the plant and/or equipment. That amount, $14 million, was required to be listed by Arbor and may not be used to offset or mitigate the omissions of pending CONs.
In University Community Hospital v. Department of HRS, 14 FALR 1899 (F.O. 4/14/92), the hearing officer held that the fact that an item may ultimately be abandoned after additional review "merely emphasizes that the expenditure is planned, rather than actual, and is characteristic of any pending project."
Arbor has failed to demonstrate that it submitted an application with the statutory minimum content, that it should not have included capital expenditure budgets, and that preliminarily denied CONs in litigation are not pending capital projects. Therefore, Manor Care's Motion For Summary Recommended Order Dismissing Arbor is Granted.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Arbor Health Care Company for CON No.
7144 to construct an 81-bed nursing home in Sarasota County, District 8, Subdistrict 6, be DENIED.
DONE AND ENTERED this 21st day of April, 1994, in Tallahassee, Leon County, Florida.
ELEANOR M. HUNTER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 21st day of April, 1994.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2562
To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact:
Manor Care's and AHCA's Joint Proposed Findings of Fact
Accepted in Finding of Fact 1.
Accepted in Preliminary Statement and Conclusions of Law 13-16.
3,4,5. Accepted in or subordinate to Preliminary Statement.
Accepted in Conclusion of Law 13.
Accepted in Finding of Fact 2.
Accepted in Finding of Fact 6.
Subordinate to Finding of Fact 6.
10,11,12. Accepted in Finding of Facts 2-6 and Conclusions of Law 13-16.
13,14,15,16,17. Accepted in Conclusions of Law 13-16. 18,19,20. Accepted in Finding of Fact 7 and Conclusion
of Law 13-16.
21-33 Accepted in Findings of Fact 8,9 and 10 and Conclusions of Law 17 and 18.
34,35. Issues not reached. Arbor's Proposed Findings of Fact
Accepted in Finding of Fact 1.
Accepted in Preliminary Statement.
Issues not reached.
Accepted, in relevant part in, Findings of Fact 2,6, and 9; rejected, in relevant part in, Conclusion
of Law 17.
Accepted in Finding of Fact 13.
Accepted in Finding of Fact 3-6. 7,8. Accepted in Finding of Fact 7.
Accepted in Conclusion of Law 13.
Accepted in Conclusion of Law 15.
11-17. Accepted in or subordinate to Conclusions of Law
15 and 16.
18. Accepted in or subordinate to Conclusion of Law 20. 19-20. Accepted, in relevant part, in Findings of Fact
8 and 10.
COPIES FURNISHED:
John L. Wharton, Attorney Chris Bentley, Attorney Diane D. Tremor, Attorney 2548 Blairstone Pines Drive Tallahassee, Florida 32301
Richard Patterson Senior Attorney
Agency for Health Care Administration
325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131
James C. Hauser, Attorney Lauchlin T. Waldoch, Attorney Post Office Box 1876 Tallahassee, Florida 32301
R. S. Power, Agency Clerk
Agency for Health Care Administration Atrium Building, Suite 301
325 John Knox Road Tallahassee, Florida 32303
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 ten 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.
=================================================================
JOINT MOTION FOR REMAND
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MANOR CARE OF BOYNTON BEACH, INC. d/b/a/ MANOR CARE - SARASOTA COUNTY,
Petitioner,
vs. CASE NO. 93-2562
AGENCY FOR HEALTH CARE ADMINISTRATION
Respondent.
/
JOINT MOTION FOR REMAND
The Agency for Health Care Administration ("Agency") and Manor Care of Boynton Beach, Inc. d/b/a Manor Care - Sarasota County ("Manor Care") hereby respectfully move the Hearing Officer for entry of an order remanding this proceeding back to the Agency for entry of final Agency action, and in support thereof states:
On June 20, 1994, the Agency and Manor Care filed a "Stipulation and Settlement Agreement" in this cause. Per that document, the parties agreed that Manor Care's CON application should be approved, and that there are no remaining disputed issues of law or fact.
Because there are no remaining disputed issues of law or fact, respectfully, the Division of Administrative Hearings no longer has jurisdiction over this cause. The matter should be remanded back to the Agency for entry of final Agency action consistent with the terms and conditions of the "Stipulation and Settlement Agreement".
This is an unopposed Motion. As of this date, Manor Care and the Agency are the only parties to this proceeding. While Arbor Health Care Company ("Arbor") has filed a Petition to Intervene, there has been no ruling on that Petition. Manor Care intends to file written opposition to said Petition.
Thus, to date, because Arbor is not a party to this proceeding and because the "Stipulation and Settlement Agreement" filed by Manor Care and the Agency is in full force and effect, neither Arbor nor any other entity r person has any standing or legal right to formally oppose this Motion or oppose the terms and conditions of the "Stipulation and Settlement Agreement".
WHEREFORE, for the reasons stated, the Agency and Manor Care respectfully request the Hearing Officer to enter an order remanding this cause back to the Agency for entry of final Agency action consistent with the terms and conditions of the "Stipulation and Settlement Agreement".
Respectfully submitted this 20th day of June, 1994.
RICHARD A. PATTERSON JAMES C. HAUSE
Senior Attorney Florida Bar No.: 279846 Agency for Health Care LAUCHLIN T. WALDOCH Administration Florida Bar No.: 262749
Suite 301, The Atrium Messer, Vickers, Caparello, Madsen,
325 John Knox Road Lewis & Goldman, P.A. Tallahassee, Florida 32303 Post Office Box 1876 904/921-0069 Tallahassee, Florida 32302
904/222-0720
CERTIFICATE OF SERVICE
HEREBY CERTIFY that an original and one copy of the foregoing document has been furnished, by Hand Delivery, to the DIVISION OF ADMINISTRATIVE HEARINGS, The DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida 32399-1 550, and a copy hereof has been furnished by U.S. Mail, to JOHN WHARTON, ESQUIRE, of Rose, Sundstrom and Bentley, 2548 Blairstone Pines Drive, Tallahassee, Florida 32301, this 20th day of June, 1994.
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MANOR CARE OF BOYNTON BEACH, INC. d/b/a MANOR CARE - SARASOTA COUNTY,
Petitioner,
vs. CASE NO. 93-2562
CON NO. 7142
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent.
/
STIPULATION AND SETTLEMENT AGREEMENT
The Agency for Health Care Administration ("Agency") and Manor Care of Boynton Beach, Inc. d/b/a Manor Care - Sarasota County ("Manor Care"), by and through the undersigned counsel and pursuant to Section 120.57(3), Florida Statutes, do hereby enter into the Stipulation and Settlement Agreement, this 20th day of June, 1994.
Manor Care's CON Application satisfies all relevant CON review criteria in Section 408.035(1) and (2), Florida Statute, Rule 59C-1.036, Florida Administrative Code, and Chapter 59C-1, Florida Administrative Code. Additionally, Manor Care's CON Application satisfies all application content requirements and review process requirements in Sections 408.037 and 408.039, Florida Statutes, and Chapter 59C-1, Florida Administrative Code.
Manor Care and the Agency stipulate and agree that Manor Care's CON Application #7142 should be approved in its entirety.
Based on this document, there are no remaining issues of fact or law in dispute.
Upon execution and filing of this Stipulation and Settlement Agreement and receipt of an order from the Hearing Officer remanding this case, the Agency shall enter a Final Order issuing CON # 7142 to Manor Care for the establishment of an 81-bed community nursing home in Sarasota County, Florida. CON # 7142 shall have the following conditions placed upon it: a minimum of 35 percent of total annual patient days shall be provided to Medicaid residents; and a 30-bed specialized unit for residents with Alzheimer's disease and related dementia disorders.
The issuance date of CON #7142 shall be the date of issuance of the Final Order in this case.
Each party shall bear its own attorney's fees and costs.
RICHARD A. PATTERSON JAMES C. HAUSE
Senior Attorney Florida Bar No.: 279846 Agency for Health Care LAUCHLIN T. WALDOCH Administration Florida Bar No.: 262749
Suite 301, The Atrium Messer, Vickers, Caparello, Madsen,
325 John Knox Road Lewis & Goldman, P.A. Tallahassee, Florida 32303 Post Office Box 1876 904/921-0069 Tallahassee, Florida 32302
904/222-0720
DATED: 06/20/94 DATED: 06/20/94
CERTIFICATE OF SERVICE
HEREBY CERTIFY that an original and one copy of the foregoing document has been furnished, by Hand Delivery, to the DIVISION OF ADMINISTRATIVE HEARINGS, The DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida 32399-1 550, and a copy hereof has been furnished by U.S. Mail, to JOHN WHARTON, ESQUIRE, of Rose, Sundstrom and Bentley, 2548 Blairstone Pines Drive, Tallahassee, Florida 32301, this 26th day of June, 1994.
=================================================================
ORDER OF REMAND
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
MANOR CARE OF BOYNTON BEACH, ) INC. d/b/a MANOR CARE-SARASOTA ) COUNTY, )
)
Petitioner, )
)
vs. ) CASE NO. 93-2562
)
AGENCY FOR HEALTH CARE ) ADMINISTRATION and ARBOR HEALTH ) CARE COMPANY, )
)
Respondent. )
)
ORDER OF REMAND
THIS CAUSE came on for consideration of the parties' Stipulation and Settlement and Joint Motion for Remand filed on June 20, 1994. Having reviewed the record in this proceeding and being advised in the premises, it is
ORDERED that:
The file of the Division of Administrative Hearings is closed.
This matter is returned to the referring agency for final disposition.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 28th day of June, 1994.
ELEANOR M. HUNTER
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
FILED with the Clerk of the Division of Administrative Hearings this 28th day of June, 1994.
COPIES FURNISHED:
John L. Wharton, Esquire Chris Bentley, Esquire
2548 Blairstone Pines Drive Tallahassee, Florida 32301
Richard Patterson, Esquire Senior Attorney
Agency for Health Care Administration
325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131
James C. Hauser, Esquire MESSER, VICKERS, CAPARELLO,
MADSEN, LEWIS, GOLDMAN & METZ
Post Office Box 1876 Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
MANOR CARE OF BOYNTON BEACH, INC. d/b/a MANOR CARE--SARASOTA COUNTY,
Petitioner, CASE NO.: 93-2562
CON NO.: 7144
vs. RENDITION NO.:
AHCA-94-79-FOF-CON
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION AND ARBOR HEALTH CARE COMPANY,
Respondents.
/
FINAL ORDER OF DISMISSAL
The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order on April 21, 1994, to the Agency for Health Care Administration (AHCA). The Recommended Order of Hearing Officer Eleanor M. Hunter is incorporated by reference.
BACKGROUND
Manor Care of Boynton Beach, Inc. d/b/a Manor Care - Sarasota County (Manor Care) and Arbor Health Care Company (Arbor) filed competing Certificate of Need (CON) applications to construct 81 bed nursing home facilities in Sarasota
County in District 8. The agency initially approved Arbor's application and denied Manor Care's application. Manor Care challenged these decisions, resulting in this administrative proceeding.
On July 26, 1993, Manor Care filed a Motion for Summary Recommended Order against Arbor based upon Arbor's failure to comply with the "capital projects" disclosure requirements in Section 408.037(2)(a), Florida Statutes (1993). The motion was based in part upon Arbor's failure to disclose capital projects that were applied for, were denied, and were pending in litigation at the time Arbor submitted the subject application. The question is whether the omission of these so-called "denied- but-in-litigation CONs" is a fatal defect in Arbor's application.
The agency joined in Manor Care's Motion for Summary Recommended Order in all material respects and joined in the request for summary relief against Arbor. The Hearing Officer conducted an evidentiary hearing on Manor Care's motion on March 3, 1994.
Before submission of the parties' Post-Hearing Briefs, Arbor twice moved to reopen the record to admit additional evidence. These motions were denied by the Hearing Officer.
Following entry of Hearing Officer Hunter's Recommended Order on April 21, 1994, Arbor filed exceptions. Manor Care and the agency timely filed a Joint Response to Arbor's exceptions.
THE MOTIONS TO REOPEN THE RECORD
Arbor excepts to the Hearing Officer's ruling on Arbor's Motions to Reopen the Record. Each of these evidentiary rulings is within the sound discretion of the Hearing Officer and should not be overturned absent a showing of gross abuse. Arbor has failed to demonstrate any abuse of such discretion.
The Hearing Officer properly refused to reopen a closed evidentiary record to admit the agency's notice of proposed rule amendment in the March 11, 1994, Florida Administrative Weekly and a subsequently issued State Agency Action Report (SAAR) Finality in administrative proceedings is critical to due process, fairness and justice for all parties. The Hearing Officer properly denied each of Arbor's motions and the exceptions are denied for the following reasons.
Arbor claims that the agency's Notice of Proposed Rules, published in the March 11, 1994, edition of the Florida Administrative Weekly, constituted newly discovered evidence which should have been admitted after the close of the evidentiary hearing.
The issue for summary disposition was whether Arbor's capital projects list complied with the minimum statutory application content requirements, as implemented by the rule. See Section 408.037(2)(a), Florida Statutes. The existing rule supported the agency's position that "denied-but-in-litigation CONs" must be included in a capital projects list. The fact that the agency elected to clarify the rule by amending it does not, as Arbor asserts, mean that the existing statute and rule did not require inclusion of denied-but-in- litigation CONs.
Arbor's challenge to the existing rule definition of capital projects was rejected 1/ by DOAH on May 3, 1994. Arbor Health Care Company vs. Agency for Health Care Administration, Case Number 94-0889RU, Final Order dated May 3, 1994. Nothing in this record supports Arbor's claim that the "agency itself believed that the existing rule was so misleading to the regulated public as to require amendment..." (Arbor exception, p. 3). The agency's good faith effort to clarify the existing rule does not support the inference asserted by Arbor. The exception is denied.
Arbor also claims that the State Agency Action Report (SAAR) dated March 11, 1994, was newly discovered evidence which should have been admitted and considered after the hearing. Arbor contends that this SAAR demonstrates that in the most recent nursing home cycle, the agency comparatively reviewed an application from Life Care Center of America, Inc. (Life Care) which omitted seven denied-but-in-litigation CONs. Arbor claims that this SAAR thus reflects inconsistent agency action on both the capital projects requirement and the issue of whether the agency looks to internal information to determine if an applicant has any application in litigation.
Nothing in the proffered portions of the March 11, 1994, SAAR reflects inconsistent agency action. The Life Care application to which Arbor refers was preliminarily denied. This is completely consistent with the agency's position, and the Recommended Order in this case. In both instances, the applicant failed to meet the capital projects requirement by omitting denied-but-in-litigation CONs. The only difference is the stage of the proceedings at which the defect became apparent. This procedural distinction does not alter the ultimate result of denial.
The Hearing Officer acted well within her sound discretion in denying Arbor's Motion to Reopen the Record. The exception is denied.
PRELIMINARY STATEMENT
Arbor does not dispute that it omitted over $16.7 million in denied-but-in- litigation projects. Arbor argues; however, that projects associated with denied-but-in-litigation CONs are not "capital projects" as defined by agency rule and are thus not subject to disclosure. See Rule 59C-1.002(8), (9), F. A.
Arbor further argues that even if the denied-but-in-litigation CONs were improperly omitted, such amounts must be offset against gratuitously listed costs. Specifically, Arbor claims that it included $14.2 million in capital project costs that had not received "final approval" from Arbor's Board of Directors as of the Letter of Intent deadline.
As discussed below, denied-but-in-litigation CONs must be disclosed under the plain language of Section 408.037(2)(a), Florida Statutes. This statute requires a complete listing of all capital projects "applied for, pending, approved, or underway in any state at the time of the application". (Emphasis supplied). Arbor's proposed limitation on the capital projects disclosure requirement is rejected. In addition, the project costs that Arbor did include but now seeks to disclaim were subject to disclosure and do not constitute an offset in mitigation of the omitted denied-but-in-litigation CONs.
RULING ON EXCEPTIONS FILED BY ARBOR
Arbor had the burden of proving entitlement to a CON.
Arbor excepts to the Hearing Officer's conclusion that Arbor had the burden of establishing entitlement to a certificate of need. This is a correct statement of the law. Humhosco, Inc. vs. Department of HRS, 561 So2d 388 (Fla. 1st DCA 1990) Although initiated by a Motion for Summary Recommended Order, the issue of Arbor's compliance with the statutory capital projects disclosure requirement was resolved in an adversarial evidentiary proceeding. The burden was on Arbor, as the applicant, to demonstrate compliance with this minimum statutory application content requirement. The fact that a single, dispositive issue was being litigated in a bifurcated proceeding does not shift that burden. Indeed, the purpose and benefit of bifurcation is to litigate dispositive issues in advance, potentially saving both the expense and time attendant to a final comparative review hearing. This exception is denied.
"Denied-but-in-litigation CONs" must be disclosed as capital projects that are "applied for, pending, approved, or
underway" as of the letter of intent deadline.
The Hearing Officer found, and there is no dispute, that Arbor failed to include the capital project costs for three nursing homes proposed in earlier CON applications, each of which was the subject of pending litigation.
The Hearing Officer found that the omitted projects costs of $16.7 million were significant and material. This finding is accepted as being supported by competent, substantial evidence in the record. Section 120.57(1)(b)(10), Florida Statutes (1993).
Arbor excepts to the Hearing Officer's conclusion of law that the project costs associated with "denied-but-in-litigation CONs" must be included in a CON application. This exception is without merit. Florida law contains certain mandatory minimum content requirements for CON applications.
One such mandatory minimum content requirement is the disclosure of an applicant's capital projects. See Section 408.037(2)(a), Florida Statutes.
This agency has previously dismissed CON applications for failure to comply with the capital projects requirement. See e. g., NME Hospitals, Inc. d/b/a Palms of Pasadena Hospital vs. Agency for Health Care Administration, Case Number 93-4897 (AHCA 1994); Colonial Health Care, Inc. vs. Agency for Health Care Administration, 15 FALR 1215 (AHCA 1993)(application dismissed for omitting $4.7 million in capital projects); University Community Hospital vs. Department of Health and Rehabilitative Services, 14 FALR 1899 (DHRS 1991)(applicant dismissed for omitting $6.5 million in capital projects; other applicant dismissed for omitting $2 million in capital projects); Central Florida Regional Hospital vs. Department of Health and Rehabilitative Services, 13 FALR 350 (DHRS 1990)(application denied for omitting $12 million in capital projects).
Section 408.037(2)(a), Florida Statutes requires each CON application to contain:
A statement of the financial resources needed by and available to the applicant to accomplish
the proposed project. This statement shall include:
A complete list of all capital projects including new health facility development projects and health facility acquisitions applied for, pending, approved, or underway in any state at the time of application regardless of whether or not that state has a Certificate of Need program or a capital expenditure review program...(Emphasis supplied).
Rule 59C-1.008(5)(h), Florida Administrative Code, requires an applicant to disclose the requisite amounts as of the deadline for submitting the letter of intent (LOI)
CONs which have been preliminarily denied and administratively challenged as of the LOI deadline must be disclosed. To achieve "denied-but-in-litigation" status, clearly a CON must necessarily have been "applied for". If challenged, the application remains "pending" until the agency issues a Final order.
Arbor maintains that denied-but-in-litigation CONs do not meet the definition of "capital projects" in Rule 59C-1.002(9), Florida Administrative Code:
"Capital project" means a project involving one or more expenditures which has received final approval via authorization to execute for which capitalization will be required under generally accepted accounting principles. For purposes of this definition, final approval includes Letters of Intent to
issue a Certificate of Need issued by the agency.
As interpreted by this agency, "final approval via authorization to execute" means internal approval by the applicant. By law, every CON application must necessarily have received "final approval via authorization to execute" (thereby meeting the rule definition of a "capital project"). Sections 408.039(2)(c) and 408.037(4) require both a LOI and a CON application to contain corporate resolutions by the applicant that the proposed project has received such internal approval. Hence, denied-but-in-litigation CONs are "capital projects" within the statute and the rule.
Arbor claims that the second sentence of Rule 59C-1.002(9) limits "capital projects" to those projects which have received initial approval from this agency. Arbor excepts to the Hearing Officer's conclusion to the contrary.
The second sentence of the rule simply clarifies that projects which have received letters of intent to issue should be considered capital projects. The rule must be read in harmony with its enabling legislation, with any conflicts resolved in favor of the statutory directive. See Canal Insurance vs.
Continental Casualty Co., 489 So2d 136 (Fla. 2d DCA 1986). This exception is denied.
The agency is not required to supplement or amend a deficient CON application by reference to information
outside that CON application.
Arbor excepts to the conclusion that the agency is not required to review pending litigation in which it is a party to determine if unlisted capital project costs exist for an applicant. This exception is rejected. By law, it is the applicant's burden alone to provide the information required in a CON application, including the capital projects disclosure. See Section 408.037, Florida Statutes ("An application for a certificate of need shall contain...") (Emphasis supplied)
Rule 59C-1.010(1), F. A. C., provides that "the agency shall review all applications in the context of the review criteria...and all information relevant to the criteria contained therein". (Emphasis supplied). Rule 59C- 1.010(2)(a) provides an "application shall not be deemed complete by the agency unless all information required by statute and rule has been submitted by the applicant." (Emphasis supplied)
In sum, whether the information on Arbor's "denied-but-in- litigation CONs" was available elsewhere in the agency's files is legally irrelevant. Arbor failed to make the requisite disclosure; that failure cannot now be deemed the fault of the agency.
The omitted 1992 capital project budget.
In addition to the omitted denied-but-in-litigation CONs, the Hearing Officer found in paragraph 10 that Arbor failed to include or account for other projects approved in Arbor's fiscal year 1992 capital budget. For the first time, in its exceptions, Arbor argued that the FY 1992 costs were not included because they "may" have been spent. The Hearing Officer's finding is accepted as being supported by competent, substantial evidence. The exception is denied.
Omission of the denied-but-in-litigation CONs is not offset by other, properly included capital project costs.
Arbor sought to avoid the consequences of failing to include its omitted capital projects through an offset. At hearing, Arbor claimed that $14.2 million in capital projects included in its application for FY 1993--1996 were not required to be disclosed, and should offset the omitted amounts.
As discussed below, the Hearing Officer properly found and concluded that the FY 1993 and FY 1995--1996 project costs were subject to disclosure and thus are not available to offset the improperly omitted amounts.
The 1993 capital project costs.
Arbor excepts to the findings and conclusion that $4.95 million in capital projects for FY 1993 were subject to disclosure and unavailable as an offset against omitted costs. Arbor now seeks to disclaim this amount on the theory that it was not "finally approved" as of the LOI deadline.
As discussed previously, "final approval via authorization to execute" means internal approval of the application, whatever form that process may take. This agency requires some indicia of certainty that those capital projects which are pending in the applicants own view will be disclosed. The requisite internal approval can take any form; that is up to the applicant's corporate or business structure.
In this instance, as found by the Hearing Officer, Arbor's own corporate representative testified that the 1993 capital budget for renovations and routine improvements was about $4.95 million; that he prepared and approved Arbor's Schedule 2 in which this amount was included; that capital budgets such as these were submitted to this budget development team by the facilities in June of each year; and that the amount was based on "reasonable assumptions on what would happen" in FY 1993. The amounts listed by Arbor in this regard were very specific: $2,102,198 for equipment/furnishings and $2,595,000 for renovations. He also represented that Arbor had already secured financing for these planned expenditures.
The Hearing Officer's findings of fact to this effect, through the acceptance of Manor Care and the agency's joint proposed findings, are based upon competent, substantial evidence and are therefore accepted by this agency. The only ultimate finding and conclusion to be drawn from such findings is that the 1993 equipment/renovation costs were in fact "finally approved" and planned/pending as of the LOI deadline. Arbor properly included such costs and cannot now use them to offset other omissions.
Arbor's argument that these FY 1993 costs could not have been "finally approved" as of the November 2, 1992, LOI deadline because Arbor's Board of Directors did not vote to approve capital budgets until February of 1993 is rejected. The uncontroverted evidence is that Arbor's facilities submit their capital budgets for the upcoming fiscal year in June; that an officer of Arbor (who testified at the hearing) received the 1993 proposed budgets, reviewed them and included them as pending capital project costs in this application with full authority and information. The minutes of Arbors Board of Directors establish a routine practice of ratifying prior actions of its officers, directors and Executive Committee, with the effective date being the date the action was taken. As is her responsibility, the Hearing Officer reconciled any conflicts in the evidence to find that these FY 1993 capital budget costs were "finally approved", "pending" and thus subject to disclosure. The exception is denied.
Arbor excepts to the Hearing Officer's reliance upon this agency's decision in NME Hospitals, Inc., supra as authority for the conclusion that these FY 1993 project costs were subject to disclosure. NME Hospitals, Inc., the applicant failed to disclose capital projects for future fiscal years based upon its internal corporate policy of budgeting one year at a time. NME argued that such amounts were not "finally approved" and were not subject to mandatory disclosure. This agency specifically rejected this argument:
According to its own internally-generated document, [NME] had projected capital expenditures for numerous capital projects extending into 1994 and 1995. These projects can only be characterized as "pending" or "underway" as of the application deadline.
As such, the "total approximate cost" of these projects must have been included per Section 408.037(2)(a), Florida Statutes, and Rule 59C-1.008(5)(h), Florida Administrative Code. This legal requirement is not changed by the fact that [NME] happens to have an internal corporate policy of adopting capital
budgets one year at a time. (Emphasis supplied).
Contrary to Arbor's assertion, NME Hospitals, Inc. is on point. Here, as did NME, Arbor seeks to avoid the disclosure requirement by reference to its internal budgeting practice of approving budgets one year at a time. This agency will not permit an applicant's internal corporate process for regulating cash flow to alter or diminish the legal requirement for disclosing capital project amounts. This exception is denied.
The 1994 - 1996 capital project costs.
In addition to the FY 1993 capital project costs discussed above, Arbor included within its Schedule 2 over $9.5 million for renovations and routine capital expenditures for improvements in FY 1994--1996. The Hearing Officer found that these amounts were planned, intentionally included amounts that were properly included. Arbor's exceptions to these findings, which are based upon competent, substantial evidence, are without merit.
In sum, the FY 1993 - 1996 capital project costs for renovation and routine improvements were pending as of the LOI deadline in this case. Such costs, totalling over $14.2 million, were subject to the mandatory statutory disclosure requirement and cannot now be used to offset Arbor's material and substantial omissions for its denied-but-in-litigation CONs and its FY 1992 capital budget.
The exceptions are denied.
FINDINGS OF FACT
The agency hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order including those findings proposed by the parties and accepted by the Hearing Officer.
CONCLUSIONS OF LAW
The agency hereby adopts and incorporates by reference the conclusions of law set forth in the Recommended Order.
Based upon the foregoing, it is
ADJUDGED, that the application of Arbor Health Care Company for CON number 7144 to construct an 81 bed nursing home in Sarasota County, District 8, Subdistrict 6, be DENIED.
DONE and ORDERED this 6th day of June, 1994, in Tallahassee, Florida.
Doug as M. Cook, Director Agency for Health Care
Administration
ENDNOTE
1/ Arbor challenged as an unpromulgated rule the agency's interpretation of the existing rule definition of "capital projects" as including denied-but-in- litigation CONs. Arbor made the same arguments in the rule challenge as it does now with respect to the alleged "misleading" or "confusing" nature of the existing rule. Those arguments were rejected by Final Order in the rule challenge and are equally without merit in this case.
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, 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:
James C. Hauser, Esquire
MESSER, VICKERS, CAPARELLO, MADSEN, LEWIS, GOLDMAN & METZ, P. A.
Post Office Box 1876 Tallahassee, Florida 32302-1876
John L. Wharton, Esquire Chris H. Bentley, Esquire Diane D. Tremor, Esquire ROSE, SUNDSTROM & BENTLEY
2548 Blairstone Pines Drive Tallahassee, Florida 32301
Richard Patterson, Esquire Senior Attorney, Agency for Health Care Administration
325 John Knox Road
Atrium Building, Suite 301 Tallahassee, Florida 32303-4131
Eleanor M. Hunter Hearing Officer
The DeSoto Building 1230 Apalachee Parkway
Tallahassee, Florida 32399-1550 Elizabeth Dudek (AHCA/CON) Alberta Granger (AHCA/CON)
Elfie Stamm (AHCA/CON)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addresses by U.S. Mail this 7th day of June, 1994.
R. S. Power, Agency Clerk State of Florida, Agency for Health Care Administration
325 John Knox Road
The Atrium Building, Suite 301 Tallahassee, Florida 32303
(904) 922-3808
=================================================================
DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
ARBOR HEALTH CARE COMPANY, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v CASE NO. 94-1969
STATE OF FLORIDA, AGENCY FOR DOAH CASE NO. 93-2562 HEALTH CARE ADMINISTRATION and
MANOR CARE OF BOYNTON BEACH,
INC. d/b/a/ MANOR CARE-SARASOTA COUNTY,
Appellees.
/ Opinion filed May 16, 1995.
An appeal from Order of the Agency for Health Care Administration.
Diane D. Tremor, P.A. and Chris H. Bentley, P.A. of Rose, Sundstrom & Bentley, Tallahassee, for Appellant.
Richard A. Patterson of Agency for Health Care Administration for Appellee Agency for Health Care Administration, and James C. Hauser of Parker, Skelding, Labasky, Corry, Eastman and Hauser, P.A., Tallahassee, for Appellee Manor Care of Boynton Beach, Inc., for Appellees.
ALLEN, J.
Arbor Health Care Company (Arbor) appeals from a summary denial by the appellee Agency for Health Care Administration (the agency) of Arbor's application for a certificate of need (CON) due to Arbor's failure to disclose certain projects determined by the agency to be "capital projects" and therefore subject to disclosure pursuant to section 4O8.O3(2)(a), Florida Statutes, and Florida Administrative Code Rule 59C-1.002(9). Concluding that Arbor's application met the disclosure requirements of the statute and rule, we reverse.
Arbor and appellee Manor Care of Boynton Beach, Inc. (Manor) submitted competing CON applications to construct a nursing home in Sarasota County. The agency initially approved Arbor's application and denied Manor's application.
Manor petitioned for a section 120.57(1), Florida Statutes, administrative hearing to challenge the agency's decision, and subsequently filed a motion for a summary recommended order, contending that Arbor had failed to comply with the minimum application content requirements of section 408.037 (2)(a). Manor alleged that Arbor had failed to disclose three projects for which CON applications had been denied. Arbor was litigating the denial of the CON application on each of those projects. The agency agreed that Arbor's omission of those projects violated the mandatory disclosure requirements of the statute.
The hearing officer recommended that Arbor's application be denied for failure to comply with the disclosure requirements of the statute as interpreted in accordance with rule 59C-1.002(9) The agency subsequently issued a final order adopting the hearing officer's findings and conclusions and summarily denying Arbor's CON application.
Section 408.037 (2)(a) requires that a CON application disclose all "capital projects" which are "applied for, pending, approved, or underway in any state at the time of application." Rule 59C-1.002(9), 1/ which was promulgated by the agency, defines "capital project" as
a project involving one or more expenditures which has received final approval via authorization to execute for which capitalization will be required under generally accepted accounting principles. For the purposes of this definition, final approval includes letters of intent to issue a certificate of need issued by the agency.
The agency maintains that under this rule any project that has received internal approval by the applicant is a capital project and must be disclosed, including denied-but-in-litigation projects such as the three projects not listed by Arbor. We disagree. The second sentence of the rule explicates circumstances under which a project requiring issuance of a CON will be considered to have reached "final approval." The indication therein that such final approval is reached when the agency issues its letter of intent to issue a CON unmistakably conveys the message that final approval is not reached where the agency has not acted on a CON application, and certainly not where, as here the agency has denied the application. Therefore, Arbor's denied-but-in- litigation projects were not "capital projects" subject to disclosure in its CON application.
The agency argues that its interpretation of the statutes and rules it is charged with administering is ordinarily accorded deference. Indeed, were it not for the agency's own rule narrowly defining "capital project," we would
accept its interpretation of section 408.037 (2)(a). However, the agency chose to interpret the statute via rule 59C-1.002(9) so as to clearly exclude denied- but-in-litigation projects. An agency's interpretation of its own rule is entitled to great weight, but judicial deference to agency interpretation does net extend to a construction which contradicts the unambiguous language of a rule. Woodley v. Department of Health & Rehabilitative Serv., 505 So.2d 676 (Fla. 1st DCA 1987)
The order is set aside and this case is remanded for further agency action.
DAVIS, J. and SMITH, SENIOR JUDGE, CONCUR.
ENDNOTE
1/ The agency subsequently amended this rule to specifically capture the denied-but-in-litigation projects. Rule 59C-1.002(9) now provides that a Capital project includes "[a] project involving a Capital expenditure for which a notice of intent to deny a Certificate of need is in litigation, or Could
still be litigated within any remaining part of the 21-day period provided by s. 4O8.039(s) (a), F.S."
MANDATE
From
DISTRICT COURT OF APPEAL OF FLORIDA FIRST DISTRICT
To the Honorable, Douglas M. Cook, Director Agency for Health Care Administration
WHEREAS, in that certain cause filed in this court styled:
MANOR CARE OF BOYNTON BEACH, INC. d/b/a MANOR CARE - SARASOTA, COUNTY
vs. Case No. 94-1969
Your Case No. 93-2562
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION AND ARBOR HEALTH CARE COMPANY
The attached opinion was rendered on May 16, 1995
YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said opinion, the rules of this Court and the laws of the State of Florida.
WITNESS the Honorable E. Earle Zehmer
Chief Judge of the District Court of Appeal of Florida, First District and the Seal of said court at Tallahassee, the Capitol, on this 1st day of June, 1995
Jon S. Wheeler
Clerk District Court of Appeal of Florida, First District
================================================================= AGENCY ORDER REMANDING
=================================================================
STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
ARBOR HEALTH CARE COMPANY,
Petitioner, CASE NO.: 93-2562 CON NO.: 7144
vs.
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, MANOR CARE OF BOYNTON BEACH, INC. d/b/a MANOR CARE - SARASOTA COUNTY,
Respondents.
/
ORDER REMANDING
Arbor and Manor Care filed competing applications for a CON to build an 81 bed nursing home in Sarasota County. The agency's initial decision was to approve Arbor and deny Manor Care. Manor Care challenged the initial decisions, and subsequently filed a motion for summary denial of the Arbor application alleging that Arbor's application failed to satisfy the "capital projects" requirement of Section 408.037(2)(a), Florida Statutes. The basis of the motion was that Arbor omitted from its list of capital projects, the projected costs of other nursing home proposals which had been initially denied and remained pending in litigation (denied but in litigation") at the time the application was filed, and also omitted certain other categories of capital costs. The agency joined in the motion for summary denial. After an evidentiary hearing, the hearing officer found as a fact that Arbor omitted "denied but in litigation" proposals totaling over $16 million. She also found that other capital projects were omitted, but made no finding of the dollar value. Having concluded that the statute and the former Rule 59C-1.002(9) required the "denied but in litigation" proposals be listed and that the omission was material she recommended the motion be granted and Arbor's application be denied. The agency adopted the Recommended Order.
Arbor appealed to the First District Court of Appeal. The agency stayed its Final Order pending appellate review. In an opinion of May 16,1995, DCA Number 94-1969, the court reversed the agency's Final Order only as to the denied but in litigation" CON proposals and remanded the case for "further agency action". 1/ Further fact finding proceedings are required to determine whether the omission of the other capital projects is material and fatal to Arbor's application. See paragraph 10 of the Recommended Order.
Arbor is the prevailing party in the appeals court, and Arbor has timely filed a motion for costs under Florida Appellate Rule 9.400(a). The costs for which Arbor seeks reimbursement are $466.20 for the appellate record and $250.00 for the filing fee.
Based upon the foregoing, it is
ADJUDGED, that this case is remanded to the Division of Administrative Hearings. The motion for costs is granted and the agency shall reimburse Arbor in the amount of $716.20.
DONE and ORDERED this 31st day of July, 1995, in Tallahassee, Florida.
Douglas M. Cook, Director
Agency or Health Care Administration
ENDNOTE
1/ The relief specifically requested by Arbor was reversal of the agency's final order of dismissal and remand for a full comparative hearing. (Appellant's initial brief, page 49).
COPIES FURNISHED:
Richard Patterson, Esquire Senior Attorney, Agency for Health Care Administration 2727 Mahan Drive
Fort Knox 3, Suite 3431
Tallahassee, Florida 32308-5403
James C. Hauser, Esquire
PARKER, SKELDING, LABASKY, CORRY, EASTMAN & HAUSER, P. A.
Post Office Box 669 Tallahassee, Florida 32301
Diane D. Tremor, Esquire Chris H. Bentley, Esquire ROSE, SUNDSTROM & BENTLEY
2548 Blairstone Pines Drive Tallahassee, Florida 32301 Elizabeth Dudek (AHCAICON)
Alberta Granger (AHCAlCON) Elfie Stamm (AHCA/CON)
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addresses by U.S. Mail this 1st day of August, 1995.
R. S. Power, Agency Clerk State of Florida, Agency for Health Care Administration 2727 Mahan Drive
Fort Knox 3, Suite 3431
Tallahassee, Florida 32308-5403
(904)922-3808
| Issue Date | Proceedings |
|---|---|
| Jan. 10, 1996 | Final Order filed. |
| Dec. 26, 1995 | Final Order filed. |
| Dec. 20, 1995 | Order Closing File sent out. CASE CLOSED, Matter is returned to the referring agency. |
| Dec. 15, 1995 | Manor Care`s Notice of Partial Dismissal of Petition Challenging Arbor`s Initial Application Approval and Joint Motion for Remand filed. |
| Dec. 15, 1995 | Order Remanding Case and Manor Care`s Con Application to Agency for Entry of Final Order Approving Manor Care`s Application (For HO Signature); Order Remanding Case and Arbor`s Con Application to Agency for Entry of Final Order Approving Arbor`s Application rec`d |
| Dec. 13, 1995 | Order of Abeyance sent out. (Parties to file status report within 21 days from the date of this Order) |
| Dec. 11, 1995 | (Arbor Health Care) Stipulated Motion to Continue filed. |
| Oct. 02, 1995 | Order Denying Joint Motion for Reconsideration of the September 6 "Order on Remand and Notice of Hearing" or, Alternatively, Joint Motion for Entry of Recommended Order on Scope of Hearing on Remand sent out. |
| Sep. 27, 1995 | Manor Care`s Response to Arbor`s Motion to Strike Joint Motion for Reconsideration and for Entry of a Recommended Order filed. |
| Sep. 22, 1995 | Arbor Health Care Company`s Motion to Strike Joint Motions for Reconsideration and for Entry of Recommended Order and, Alternatively, Response to Said Motions filed. |
| Sep. 18, 1995 | Joint Motion for Reconsideration of the September 6 "Order on Remand and Notice of Hearing" or, Alternatively, Joint Motion for Entry of Recommended Order on Scope of Hearing on Remand (w/exhibits A-E) filed. |
| Sep. 06, 1995 | Order On Remand and Notice of Hearing sent out. (hearing set for January 22-31, 1996; 10:00am; Tallahassee) |
| Sep. 01, 1995 | Arbor Health Care Company`s Reply to Joint Response to Prehearing Order filed. |
| Aug. 30, 1995 | (James C. Hauser) Joint Response of Agency and Manor Care to Prehearing Order, and Joint Reply to Arbor`s Response to Prehearing Order filed. |
| Aug. 28, 1995 | Arbor Health Care Company`s Response to Prehearing Order and Order of Abeyance filed. |
| Aug. 23, 1995 | Order of Abeyance sent out. |
| Aug. 21, 1995 | (Chris Bentley) Joint Response to Prehearing Order and Motion for Abeyance filed. |
| Aug. 09, 1995 | Prehearing Order sent out. |
| Aug. 08, 1995 | Order Re-Opening File in DOAH Case No. 93-2562 sent out. |
| Aug. 03, 1995 | Order Remanding filed. |
| Aug. 02, 1995 | (AHCA) Order Remanding filed. |
| Jun. 28, 1994 | Order of Remand sent out. CASE CLOSED, Parties` stipulation and settlement and joint Motion for remand filed on 06/20/94. |
| Jun. 27, 1994 | Manor Care`s Response in Opposition to Arbor`s Motion for Abeyance w/Exhibit-A filed. |
| Jun. 23, 1994 | Joint Response In Opposition To Arbor Petition to Intervene filed. |
| Jun. 21, 1994 | Arbor Health Care Company`s Motion for Abeyance filed. |
| Jun. 20, 1994 | Joint Motion for Remand; Stipulation and Settlement Agreement filed. |
| Jun. 13, 1994 | Arbor Health Care Company`s Petition to Intervene filed. |
| Jun. 07, 1994 | Final Order of Dismissal filed. |
| Apr. 21, 1994 | Recommended Order sent out. CASE CLOSED. Hearing held 3-3-94. |
| Apr. 11, 1994 | Arbor Health Care Company`s Proposed Order Denying Manor Care`s Motion for Summary Recommended Order of Dismissal w/(unsigned) Order filed. |
| Apr. 11, 1994 | Joint Proposed Findings of Fact, Conclusions of Law and Summary Recommended Order of Manor Care and the Agency for Health Care Administration w/Manor Care Exhibit-3 filed. |
| Mar. 30, 1994 | Order Denying Arbor`s Motions to Reopen the Record sent out. |
| Mar. 29, 1994 | Arbor`s Second Motion to Reopen for the Receipt of Newly Discovered Evidence and to Extend Time for Filing Post-Hearing Submissions filed. |
| Mar. 28, 1994 | Arbor`s Reply to Manor Care`s Response in Opposition to Motion to Reopen the Record filed. |
| Mar. 25, 1994 | Manor Care`s Notice of Correction filed. |
| Mar. 22, 1994 | Manor Care`s Response in Opposition to Arbor`s Motion to Reopen the Record and Extend Time filed. |
| Mar. 18, 1994 | Order Granting Extension of Time for Filing Post Hearing Brief and Reserving Ruling on Motion to Open Record Pending Timely Responses of Other Parties, If Any sent out. |
| Mar. 16, 1994 | Notice of Corrected Caption Including Case Number w/Motion to Reopen the Record for the Receipt of Newly Discovered Evidence and Motion to Extend Time for Filing Post - Hearing Submissions filed. |
| Mar. 14, 1994 | Transcript filed. |
| Feb. 25, 1994 | Manor Care`s Response to Arbor`s Motion for Continuance and Arbor`s Supplement to Motion for Continuance and Motion for Reconsideration filed. |
| Feb. 22, 1994 | Order Continuing and Rescheduling Formal Hearing sent out. (hearing rescheduled for 3/3-4/94; 10:00am; Tallahassee) |
| Feb. 21, 1994 | Arbor`s Supplement to Motion for Continuance, Arbor`s Supplement to Motion for Reconsideration and Response to Manor Care`s Withdrawal of Support for Motion to Reconsider filed. |
| Feb. 21, 1994 | Manor Care`s Withdrawal of Support for Motion to Reconsider Order Denying Motion to Reschedule Hearing on Motion for Sro filed. |
| Feb. 18, 1994 | Arbor Health Care Company`s Motion for Continuance w/Exhibit-A filed. |
| Feb. 16, 1994 | Motion for Reconsideration of Order Denying Joint Motion to Reschedule Hearing filed. |
| Feb. 15, 1994 | Order Denying Joint Motion to Reschedule Hearing sent out. |
| Feb. 14, 1994 | Joint Motion to Reschedule Hearing filed. |
| Feb. 03, 1994 | Order Denying Motion to Establish Deadline sent out. |
| Feb. 03, 1994 | Order Continuing and Rescheduling Hearing sent out. (hearing rescheduled for 2/24-25/94; 10:00am; Tallahassee) |
| Feb. 02, 1994 | Joint Motion to Reschedule Final Hearing filed. |
| Jan. 26, 1994 | Arbor Health Care Company's Second Set of Interrogatories to Manor Care filed. |
| Jan. 26, 1994 | Notice of Service of Answers to Arbor Health care Company`s Second Interrogatories filed. |
| Jan. 24, 1994 | Arbor`s Response to Manor Care`s Motion to Establish Deadline filed. |
| Jan. 18, 1994 | Joint Resolution of Discovery Disputes Related to Arbor`s Third Request for Production; Manor Care Motion to Establish deadline for Exchange of Witness Lists, Exhibit Lists, and Exhibits filed. |
| Jan. 07, 1994 | Amended Notice of Telephonic Hearing filed. (From John L. Wharton) |
| Jan. 06, 1994 | Manor Care`s Notice of Filing w/attached CC ltr to John Wharton from James C. Hauser filed. |
| Jan. 03, 1994 | (Respondent) Notice of Hearing filed. |
| Dec. 30, 1993 | Manor Care`s Notice of Taking Deposition filed. |
| Dec. 29, 1993 | Arbor Health Care Company`s Motion for Protective Order filed. |
| Dec. 22, 1993 | Notice of Service of Interrogatories filed. (From John L. Wharton) |
| Dec. 21, 1993 | Manor Care`s Notice of Taking Deposition Duces Tecum filed. |
| Dec. 10, 1993 | Arbor`s Reply to Manor Care of Boynton Beach`s Response in Opposition to Arbor Health Care Company`s Motion to Compel filed. |
| Dec. 09, 1993 | Manor Care of Boynton Beach, Inc.`s Response in Opposition to Arbor Health Care Company`s Motion to Compel filed. |
| Dec. 08, 1993 | Order Denying Motion sent out. (Manor Care`s Motion for Protective Order is denied) |
| Dec. 02, 1993 | (Petitioner) Request for Oral Argument; Manor Care`s Motions to Compel Responses to Its Second Request for Production of Documents and Second Set of Interrogatories Propounded to Arbor Health Care Company filed. |
| Dec. 01, 1993 | Arbor Health Care Company`s Motion to Compel; Arbor Health Care Company`s Response to Manor Care`s Motion for Protective Order filed. |
| Nov. 29, 1993 | Order Granting Motion to Extend Time for Response sent out. |
| Nov. 23, 1993 | (Joint) Stipulated Motion to Extend Time for Response filed. |
| Nov. 12, 1993 | Manor Care`s Written Objections to Arbor`s Third Request for Production of Documents; Manor Care`s Motion for Protective Order filed. |
| Nov. 05, 1993 | Notice of Service of Answers to Interrogatories w/Manor Care`s Second Set of Interrogatories to Arbor Health Care Company ; Arbor`s Response to Manor Care`s Second Request for Production of Documents filed. |
| Oct. 14, 1993 | Arbor Health Care Company`s Third Request for Production of Documents to Manor Care of Boynton Beach, Inc. filed. |
| Oct. 05, 1993 | Manor Care`s Second Request for Production of Documents to Arbor Health Care Company filed. |
| Oct. 05, 1993 | Notice of Service of Manor Care`s Second Interrogatories to Arbor Health Care Company filed. |
| Sep. 10, 1993 | Notice of Hearing sent out. (hearing set for 02/14-16/94;10:00AM;Tallahassee) |
| Aug. 31, 1993 | Submittal of Dates for Rescheduling of Hearing filed. (From John L. Wharton) |
| Aug. 19, 1993 | Order Granting Stipulated Motion for Continuance sent out. (hearing date to be rescheduled at a later date; parties to respond within 10 days). |
| Aug. 19, 1993 | (Arbor Health Care Co.) Stipulated Motion for Continuance filed. |
| Aug. 17, 1993 | Notice of Correction of Arbor Health Care Company`s Response to Manor Care`s Motion for Summary Recommended Order Dismissing Arbor filed. (From Diane Tremor) |
| Aug. 13, 1993 | Joint Written Reply to Arbor`s Response to Manor Care`s Motion for Summary Recommended Order Dismissing Arbor w/Exhibits filed. |
| Aug. 10, 1993 | (Petitioner) Notice of Hearing filed. |
| Aug. 09, 1993 | Order Granting Extension of Time sent out. |
| Aug. 06, 1993 | Arbor Health Care Company`s Response to Manor Care`s Motion for Summary Recommended Order Dismissing Arbor filed. |
| Jul. 30, 1993 | Agency for Health Care Administration`s Response to Manor Care`s Motion for Summary Recommended Order Dismissing Arbor filed. |
| Jul. 29, 1993 | (Arbor Health Care Co.) Motion for Extension of Time in Which to File Response filed. |
| Jul. 26, 1993 | Arbor Health Care Company`s Second Request for Production of Documents to Manor Care of Boynton Beach, Inc. filed. |
| Jul. 26, 1993 | Manor Care`s Motion for Summary Recommended Order Dismissing Arbor w/Exhibits filed. |
| Jul. 16, 1993 | (Respondent) Notice of Service of Interrogatories; Arbor Health Care Company`s First Request for Production of Documents to Manor Care of Boynton Beach, Inc. filed. |
| Jul. 08, 1993 | Case No/s: 93-2561 & 93-2562 unconsolidated. |
| May 12, 1993 | Prehearing Order and Order of Consolidation sent out. (Consolidated cases are: 93-2561, 93-2562) |
| May 11, 1993 | Notification card sent out. |
| May 10, 1993 | Notice of Appearance filed. (From John L. Wharton) |
| May 07, 1993 | Notice; Manor Care Petition for Administrative Hearing filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 01, 1995 | Remanded from the Agency | |
| May 16, 1995 | Opinion | |
| Jun. 06, 1994 | Agency Final Order | |
| Apr. 21, 1994 | Recommended Order | Applicant has burden to prove compliance with requirement to list capital projects including CONs in litigation and capital expenditure budgets. |
