STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
TIDEWELL HOSPICE AND )
PALLIATIVE CARE, INC., )
)
Petitioner, )
)
vs. ) Case No. 07-1265CON
)
AGENCY FOR HEALTH CARE )
ADMINISTRATION and THE )
HOSPICE OF THE FLORIDA )
SUNCOAST, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
This case was heard by David M. Maloney, Administrative
Law Judge of the Division of Administrative Hearings, on August 3 through 6, and 10 through 13, 2009, in Tallahassee, Florida.
APPEARANCES
For Petitioner TideWell:
Robert D. Newell, Jr., Esquire Newell, Terry & Douglas, P.A. 817 North Gadsden Street Tallahassee, Florida 32303
For Respondent Agency for Health Care Administration: Lorraine M. Novak, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop No. 3 Tallahassee, Florida 32308
For Respondent Suncoast:
Paul H. Amundsen, Esquire Julia E. Smith, Esquire
502 East Park Avenue Tallahassee, Florida 32301
STATEMENT OF THE ISSUE
The issue is whether Suncoast's application for a Certificate of Need (CON) to establish a new hospice program in Service Area 6C should be approved.
PRELIMINARY STATEMENT
The Agency for Health Care Administration ("AHCA" or the "Agency") published a fixed need pool (FNP) of one for a new hospice program in Service Area 6C, Manatee County. In response, Suncoast filed a CON application.
The application (CON 9964) was co-batched with four others. CON 9960 was filed by Evercare Hospice of Manatee County, Inc.; CON 9961 was filed by HCR Manor Care Services of Florida, Inc. (Manor Care); CON 9962 was filed by LifePath Hospice & Palliative Care, Inc.; and CON 9963 was filed by Odyssey Healthcare of Manatee County, Inc. (Odyssey).
Suncoast's application was approved. The four others were denied. Formal notice of the action taken February 23, 2007, was published on March 9, 2007, in Volume 33, Number 10 of the Florida Administrative Weekly.
TideWell Hospice and Palliative Care, Inc. (TideWell) is an existing provider of hospice services in Service Area 6C. TideWell filed a petition asserting that no need exists for an additional hospice program in Service Area 6C. The petition opposed the approval of all five of the applications.
On March 16, 2007, TideWell's petition was referred to the Division of Administrative Hearings (DOAH) and assigned Case Number 07-1265CON.
On April 7, 2007, Odyssey and Manor Care each filed petitions contesting the denial of their respective applications and the approval of Suncoast's. Odyssey's petition was assigned Case No. 07-1660CON and HCR's petition was assigned Case No. 07- 1661CON.
By order dated April 27, 2007, the three cases were consolidated and hearing was set to commence on March 3, 2008. On May 22, 2008, Suncoast filed a petition in support of its application and against approval of Odyssey's and Manor Care's. The petition sought comparative review of the competing applications. Suncoast's petition was consolidated with the other three.
On November 13, 2007, Manor Care filed a notice of voluntary dismissal of its petition and withdrew its application. Odyssey followed suit on January 18, 2008. Shortly thereafter, on January 22, 2009, Suncoast voluntarily dismissed
its petition for comparative review. The dismissals left TideWell's petition contesting Suncoast's approval as the only remaining petition.
The case was continued several times following motions for continuances. Ultimately, the hearing commenced on August 3, 2009, and ran for eight days, concluding on August 13, 2009.
As the applicant with the burden of proof, Suncoast, proceeded first at the final hearing. Suncoast presented the testimony of: Rebecca McDonald, Executive Vice-President of Programs for Suncoast, accepted as an expert in hospice administration and management; Pattye Sawyer, Suncoast Vice- President of Community Health Programs; Stacy Orloff, Suncoast Vice-President of Palliative Care and Community Programs; Kathleen Egan-City, Executive Director of the Suncoast Institute; Anne Hochsprung, CPA, Suncoast Vice-President of Finance and Chief Financial Officer of Suncoast and its affiliated organizations, accepted as an expert in healthcare finance and health financial management (including for hospices); Armand Balsano, accepted as an expert in healthcare finance and healthcare financial feasibility; and Daniel J. Sullivan, accepted as an expert in healthcare planning.
Suncoast Exhibits 1, 2, 4-12, 14, 16, 17, 19-21, 24-31, 34-
39, 41-60, 66-68, 71-75, 85-91, 94 (pages 1-4, 14-end) and 95
were offered by Suncoast. All were admitted into evidence.
Among the exhibits were the deposition testimony of Kathleen S. Roble, Director of Volunteer Services at Suncoast; Michael L. Bell, Executive Director of the Hospice Foundation of the Florida Suncoast; Jane Schafer, Vice-President of Admissions and Professional Relations at Suncoast; Creighton H. Lovvorn, Regional Vice-President of Operations, Westminster Retirement Communities of Florida; Heather Certain, Clinical Director, West Home Care Team for TideWell; and Gerry Radford, Chief Financial Officer for TideWell.
During the final hearing, Suncoast filed a request that official recognition be taken of the Final Rule published in the Federal Register on August 6, 2009, which it identified as:
No. 150, pp. 39384-39433; Department of Health and Human Services, Center for Medicare and Medicaid Services; Final Rule for the Medicare Program; Hospice Wage Index for Fiscal Year 2010.
The Hospice of Florida Suncoast's Inc.'s Request for Official
Recognition, filed August 7, 2009. Official recognition was taken and the document was marked as OR-1. Prior to the final hearing, AHCA Hospice Need Projections attached to Suncoast's Request for Official Recognition, filed July 10, 2009, were officially recognized.
The Agency presented the testimony of Jeffrey N. Gregg, Chief of the Agency's Bureau of Health Facility Regulation.
Mr. Gregg was accepted as an expert in healthcare planning, certificate of need review, and health care regulation. The Agency offered two exhibits, AHCA Exhibits 1 and 2, which were admitted into evidence.
TideWell presented the testimony of Margaret Maisto, accepted as an expert in hospice administration, development and fundraising; Heather Certain, accepted as an expert in hospice clinical direction; Thomas Davidson, accepted as an expert in healthcare planning and healthcare financial analysis; Linda Anderson, Volunteer Co-ordinator at TideWell Hospice; Debra French, TideWell Administrative Director of Education and Research; Virginia Chappelear, TideWell Director of Bereavement Services; Bettina Tyler, TideWell Community Relations Coordinator; and Susan Finkelstein, accepted as an expert in hospice pediatric services.
TideWell Exhibits 1-20, 22-24, 26-29, 31-60, 62, 63 (noted as hearsay), and 64-81 were offered by TideWell. All were admitted into evidence. TideWell also offered the portions of TideWell Exhibit 30 behind Tabs 5, 6, 7 and 8 and behind Tab 9 pages 45 and 72 and pages 58-63. The listed material behind Tab
9 of TideWell Exhibit 30 was admitted with pages 58-63 noted as hearsay. Among the exhibits were the deposition testimony of Jane Schafer, Vice-President of Admission for Suncoast; Amie Miller, TideWell Clinical Director of Sarasota Hospice House; J.
Michael Neal, TideWell Senior Coordinator for Chaplains; Ivy Ruark, TideWell Senior Education Coordinator; and Kristen Fisher, TideWell Administrative Director of the Assisted Living Facilities service line.
It was agreed by the parties at the end of the hearing that proposed recommended orders would be due 60 days following the filing of the transcript. After several motions for extension of time for filing proposed orders were granted, Suncoast and TideWell timely submitted proposed orders on December 1, 2009.
On the same day, the Agency filed a notice of joinder in TideWell's Proposed Recommended Order. The proposed orders have been considered in the preparation of this Recommended Order.
FINDINGS OF FACT
Numeric Need for One Hospice in Service Area 6C
The Agency determined that there is need for one new hospice program in Service Area 6C in the "Other Beds and Programs" Second Batching Cycle 2006.
On October 6, 2006, an FNP of one in Service Area 6C (Manatee County) for the January 2008 Hospice Planning Horizon was published by AHCA in Volume 32, No. 40 of the Florida
Administrative Weekly.
The published FNP was not challenged.
Not an Aberration
In the six consecutive batching cycles commencing with the October 2006 cycle and ending with the April 2009 cycle, AHCA's numeric need methodology yielded a number of un-served patients who would elect hospice services that was 350 or greater (see paragraph 34, below) in three batching cycles: October 2006, April 2007, and October 2008.
Rather than an FNP of one, however, an FNP of zero was published for the April 2007 and October 2008 batching cycles. The FNPs of the two cycles were "zeroed out" because Suncoast's application had been approved earlier and the approval was still pending. See para. 41, below.
The Parties
Suncoast
Suncoast is the approved applicant for a new hospice program in Service Area 6C.
Founded in 1977 and started by a group of volunteers, Suncoast is a not-for-profit, full-service community hospice. It has been a provider of hospice services in Service Area 5B (Pinellas County), a service area adjacent to 6C, since 1978.
Except for a Pinellas County hospice that exclusively serves and limits its admissions to veterans, Suncoast is the sole provider of hospice services in Pinellas County.
From inception, Suncoast's mission has been to provide assistance to anyone affected by death, dying, grief, or bereavement within the community it serves.
Suncoast has a history of providing high-quality hospice care and a wide variety of unfunded programs in Service Area 5B. It is Medicare and Medicaid Certified.
Agency for Health Care Administration
The Agency for Health Care Administration is responsible for the administration of the Certificate of Need (CON) Program in Florida and for carrying out Florida's CON Law. See § 408.031, Fla. Stat., et seq.
The Agency is designated "as the state health planning agency for purposes of federal law . . . ." § 408.034(1), Fla. Stat. It is also "the single state agency [in Florida authorized] to issue, revoke, or deny certificates of need . . . in accordance with present and future federal and state statutes." Id.
TideWell
TideWell, the Petitioner in this administrative proceeding, challenges the Agency's preliminary approval of Suncoast's application.
TideWell is a not-for-profit, full-service community hospice, founded in 1980. Licensed to provide hospice services in contiguous Service Areas 6C (Manatee County), 8D (Sarasota
County) and 8C (Charlotte and DeSoto Counties), TideWell is Medicare and Medicaid Certified.
TideWell began serving Manatee County in 1988.
Currently the sole provider of hospice services in the county, TideWell has a history of providing high-quality hospice care and a wide variety of unfunded programs in Service Area 6C. Tidewell: Quality of Care, Commitments, and Programs
TideWell is accredited by the Community Home Care Accreditation Program ("CHAP"), with special CHAP Commendations for the quality and the use of technology in its program. CHAP is a national accrediting organization whose standards exceed State and Federal licensure standards. CHAP has been authorized by Medicare and Medicaid to "deem" hospice programs to be in compliance with Medicare and Medicaid survey standards. CHAP Accreditation is confirmation that all of TideWell's services delivered in Manatee County are of the highest quality, and that TideWell has the infrastructure in place to ensure high-quality services in the future, as independently measured against national standards for best practices.
It is expensive for TideWell to maintain the high levels of quality for which it has been recognized by CHAP. For example, TideWell financially supports Master's level education for its licensed clinical social workers. For its nurses and nurse's aides, it conducts review courses for their
certification and pays for their exams if they pass them. Those achieving certification are rewarded with 3 percent pay increases.
TideWell has made significant capital commitments in Manatee County. Three branch offices have been strategically located to serve the northeast, northwest, and southern parts of the County. Two of the branch offices are owned by TideWell, and the third is leased for 5 years. TideWell has also built two strategically located freestanding hospice inpatient facilities in Manatee County.
TideWell has located its Manatee County hospice services and community outreach efforts to be geographically available and programmatically accessible. TideWell examines Manatee zip code data annually in order to plan the locations for its offices, clinical services, community bereavement services, pre-hospice services, and outreach, so as to best anticipate and serve population growth.
Beyond hospice services, TideWell offers a continuum of pre-hospice programs to address the needs of persons who may not be hospice eligible or who do not desire to elect hospice. None of these pre-hospice programs are required as part of a licensed hospice program.
Among the pre-hospice programs is Footprints, a program for children started in 2001. Partners in Care ("PIC")
is a Medicaid Waiver program that provides highly specialized pediatric palliative care services to patients determined by Children's Medical Services to be eligible. Transitions is a companionship program, started in 2003, for persons with a terminal diagnosis who have not elected hospice, but who need companionship services and psychosocial support with their illness. TideWell Connect is similar to Transitions but also provides palliative care addressed to physical symptoms relief and management. Palliative Care Partners is a program started in 2005 to provide hospice palliative care expertise on a consultative basis to non-hospice patients in acute care hospitals and their homes.
None of TideWell's programs along the pre-hospice continuum were implemented as a result of competitive pressure. Rather, each program was developed over time, as TideWell incrementally achieved increased economies of scale in Manatee County sufficient to support these programs.
TideWell's Collaboration with All Children's Hospital
Pediatrics is a tertiary service. All Children's Hospital serves a five-county area, including Pinellas and Manatee, providing local health care providers with tertiary pediatric acute care resources. TideWell collaborates with All Children's to provide palliative consultations and care to terminally and chronically ill children, participates in the PIC
program and provides a sophisticated array of outreach pediatric services to pre-hospice pediatric patients. The level and nature of the services requires the retention of difficult-to- find, highly-qualified pediatric clinicians. TideWell's economies of scale allow it to provide this service, even though the number of children who require it in TideWell's service area is small. At the time of the hearing, TideWell had resources available to handle a caseload of 50 pediatric patients, with an actual census of two patients.
TideWell has an active volunteer program in Manatee County, currently composed of 220 volunteers. It offers frequent and conveniently located training classes for new volunteers and has developed a nationally-recognized teen volunteer program. Because TideWell is CHAP accredited, its volunteer program must meet high national standards and be subject to independent verification of best practices.
TideWell offers a stratified community bereavement program that addresses the unique issues for survivors associated with various types of death, such as loss of a parent or infant death, and cause of death--e.g., suicide and or death due to trauma. TideWell has a thanatologist and staff of highly trained and experienced grief specialists stationed in Manatee County. They provide grief support to the community, including
school counseling, family retreats, support groups, and teen bereavement programs.
TideWell has demonstrated that it has the ability to grow geographically and programmatically to meet the clinical needs of patients and referral sources for hospice services in Manatee County.
TideWell offers substantially all non-hospice programs proposed by Suncoast. TideWell program enhancements may differ in name, but are substantively similar or virtually identical to services promised by Suncoast.
Florida Model Hospices
Suncoast and TideWell are "Florida model" hospices.
Florida model hospices are usually not-for-profit charitable entities. They strive to achieve revenue (including donations) in excess of expenses so that they have the financial capability of providing services that are typically unfunded or under-funded.
One method employed by Florida model hospices to achieve the revenue necessary to fund otherwise under-funded services is through economies of scale. Economies of scale were defined by Mr. Balsano at hearing as: achieving "additional volume [without] . . . having . . . costs go up . . . proportional with volume." Tr. 387. Achievement of economies of scale is especially important in the environment of revenue
reduction that prevailed at the time of hearing. That environment is reasonably expected to continue for the immediate future.
Due to relative size, Suncoast enjoys greater economies of scale than does TideWell. Suncoast, for example, has an average daily census double the size of TideWell's. It has roughly 1600 employees compared to TideWell's 900 employees. And its volunteer program with 2,800 volunteers has more than twice as many volunteers as TideWell's 1,100.
Medicare: Primary Payer
The primary payer for hospice services is Medicare.
Authorized in 1982, the Medicare benefit covers reasonable and necessary palliative treatments to the hospice patient on a per diem basis for each day the patient is in hospice.
The Medicare benefit is comprehensive, providing virtually all a patient and family need during the period of hospice care.
Florida law recognizes hospice patients with a prognosis of one year or less. To qualify for Medicare, however, the patient must be certified as having a prognosis of six months or less if the illness runs its ordinary course. Stipulated Facts
In the Pre-hearing Stipulation filed July 29, 2009, the parties stipulated to the following facts:
AHCA's rule formula resulted in a numeric need for one new hospice program in Manatee County in the batch cycle for which Suncoast's Application No. 9964 was submitted.
Suncoast's letter of intent, initial application and omissions response for Application No. 9964 were timely filed by Suncoast with the appropriate filing fee; and the application was deemed complete by AHCA.
Suncoast has a record of providing high quality care.
Suncoast has demonstrated immediate financial feasibility.
Suncoast has a record of providing services to Medicaid and indigent patients.
The estimated startup project costs on Schedule 1 of the application are reasonable for the project as proposed.
Pre-hearing Stipulation at 2. Conditions in the Application
Approval of Suncoast's application is predicated on 14 conditions.
The 14 conditions appear in an attachment to Schedule C of the application. See Suncoast Ex. 1, Vol. 1, at SC 0221- 0222.
The Hospice Programs Rule
Florida Administrative Code Rule 59C-1.0355 (the "Hospice Programs" Rule) governs hospice programs. The Hospice Programs Rule regulates several aspects of hospice programs
including the establishment of new hospice programs. See Fla. Admin. Code R. 59C-1.0355(1).
The criteria for the determination of need for a new hospice program are set out in Section (4) of the Hospice Programs Rule. The section is divided into five subsections:
(a) "Numeric Need for a New Hospice Program"; (b) "Licensed Hospice Programs"; (c) "Approved Hospice Programs"; (d) "Approval Under Special Circumstances"; and (e) "Preferences for a New Hospice Program." Fla. Admin. Code R. 59C-1.0355(4).
Among the special circumstances that support approval of a CON application for a hospice program is a finding that there exists an un-served population in the service area. Suncoast's application does not seek approval under any of the special circumstances listed in the Hospice Programs Rule. Rather, it seeks to show that it qualifies to establish a new hospice program in response to published numeric need.
Subsection (a) declares "[n]umeric need for an additional hospice program is demonstrated if the projected number of unserved patients who would elect a hospice program is
350 or greater." Fla. Admin. Code R. 59C-1.0355(4)(a). The subsection then sets out a formula for calculating an FNP or "net need." See id.
The formula incorporates four different categories of patients: those under 65 years of age whose deaths are "cancer
deaths"; those 65 years of age and over whose deaths are "cancer deaths"; those under 65 years of age and whose deaths are "from all causes except cancer"; and, those 65 years of age and over whose deaths are "from all causes except cancer."
The calculation under the formula was described by Mr. Sullivan at hearing:
First it looks at statewide averages and it then calculates the penetration rate for the local service area. It looks at the actual number of admissions that occurred in that service area in the most recent period for which data is available and then divides that by the number of deaths from the most recent period that's available.
So there's basically two different penetration rates. There is a state average and then there is a local actual rate.
The State then projects forward the number of deaths that it expects 18 months in the future in that particular geographic region
. . . they calculate a three-year historical death rate. They look back at the three most recent years, calculate an average death rate in each of those categories, and then applies that to projected population going 18 month out into the future.
* * *
And then the state applies the statewide average death rates to the projected number of deaths to see . . . the expected number of hospice patients 18 months down the road
-- and subtracts from that number the actual number of patients who were served in the service area.
Tr. 407-409. If the number yielded by the calculation is 350 or greater, then an FNP of one is published subject to protective measures for newly-licensed hospices or approved but unlicensed hospices. See Fla. Admin. Code R. 59C-1.0355(4)(b) and (c). In instances in which these protective measures are invoked, the FNP of one is reduced to zero.
The Hospice Program Rule does not allow the establishment of more than one new hospice in a service area at a time. That limitation, plus the protective measures for approved hospices and newly-licensed hospices discussed above, led Mr. Gregg to describe the methodology of the Hospice Program Rule for establishing a new hospice program as "inherently very conservative and very measured." Tr. 542.
Death Rates and Penetration Rates
Death rates declined in Manatee County from 2000 to 2005, but in the latter half of the decade, the number of deaths have been "pretty flat," tr. 410, with a small increase in 2007. As Mr. Sullivan put it at hearing, "[o]ne thing we know is the death rate ultimately is 100 percent for everybody. So there is a finite limit to how far death rates can fall." Id.
The death rate in both Florida and Manatee County over the last decade sets up the potential for AHCA's numeric need methodology to yield a result that over-projects need.
On the other hand, the penetration rate by hospices (percentage of deaths associated with hospice admissions) had increased at the time of final hearing every year for the previous 12 years. AHCA's numeric need methodology assumes a constant penetration rate. From the standpoint of penetration rates, the numeric need methodology tends to under-project need.
Whatever its imperfections, AHCA's methodology is a reasonable method to establish a point of entry for a new provider of hospices services in a hospice service area.
A Rebuttable Presumption
From the perspective of health planning, a hospice FNP of "1" creates a presumption of need for one new hospice program. But the presumption is not conclusive; it is rebuttable.
If a service area has an existing provider of hospice services, as does Service Area 6C with TideWell, then in terms of "incremental demand," an FNP of one creates a rebuttable presumption that the service area can support two providers in total, one of which is new. "Incremental demand" that is at issue is "future deaths." Tr. 467
The existence of an FNP of one new hospice program, however, does not relieve an applicant that aspires to fill the need from demonstrating that its application complies with and
meets the statutory and rule criteria applicable to CON projects.
Among the statutory criteria is one which relates directly to an FNP. It is found in paragraph (a) of Subsection
(1) of Section 408.035, Florida Statutes: "The need for the health care . . . services being proposed."
In response to the FNP of one, TideWell seeks to show in this proceeding that there is no need for a new hospice program in Service Area 6C and thereby rebut the presumption that there is a need for one set up by the FNP. Suncoast seeks to show that TideWell has not rebutted the presumption created by the FNP and that it is qualified to fill the need for one new hospice program under relevant statutory and rule criteria. TideWell takes issue with Suncoast's view of the application of some of those criteria, for example, by attempting to show through utilization data and projections that the impact of an approval will fall too heavily on TideWell.
Updated Projected Hospice Admissions
Suncoast updated projections in its CON application filed in 2006. The updated projections are reasonable.
As of June 2009, it projected that there would be a total of 2,154 hospice admissions in Manatee County in 2011, which is hoped by Suncoast to be its second year of operation. Of these, Suncoast projected it would capture 452 if its
application is approved. The remaining cases to be served by TideWell in 2011, therefore, is projected to be 1,702.
TideWell achieved 2,006 Manatee admissions in calendar year ("CY") 2008. Using CY 2008 admissions as a benchmark, it is reasonable to project that Suncoast's entry into the market will reduce TideWell's admissions in CY 2011 by at least 304.
Re-stated, instead of 2,006 admissions in the year 2011, TideWell can be reasonably expected to achieve only 1,702 admissions in CY 2011. The impact to TideWell caused by Suncoast's entry into the market, therefore, is reasonably expected to be at least 304 fewer admissions in CY 2011. Diversity Trends in Manatee County.
Manatee County's population is reasonably projected to increase 1.73 percent each year from 2009 to 2015.
Over the same time period, the population of persons under 65 is reasonably projected to increase 1.5 percent each year; the population of persons age 65 years and older, 2.5 percent each year.
In Manatee County, the non-white population is growing more rapidly than the white population.
Historically, the Hispanic population utilizes hospice services at a rate lower than the non-Hispanic population.
In Manatee County, the Hispanic population is growing faster than the non-Hispanic population. From 2000 to 2005, the
Hispanic population grew at a rate of 56.48 percent and non- Hispanic population grew at a rate of 11.07 percent.
While Hispanic deaths are a relatively small portion of the overall deaths in Manatee County, the number of Hispanic deaths is increasing.
From 2000-2005, deaths among the African-American population in Manatee County increased 7 percent while deaths in the white population decreased one percent.
There are no data to determine the extent to which TideWell serves Hispanics or African-Americans.
TideWell Penetration Rates in Manatee County
For the six-year period from 2003 to 2008, penetration rates in both Manatee County and Florida have been on an upward trend.
TideWell's penetration rate in Manatee County has increased every year over the period except for 2006 when it fell by two percent. Using round numbers, TideWell's penetration rates for the period were: 40 percent in 2003; 50 percent in 2004; 53 percent in 2005; 51 percent in 2006; 57 percent in 2007; and 59 percent in 2008. The drop-off in 2006 was compensated for by a steep increase of 6 percent between 2006 and 2007.
Again using round numbers, the statewide penetration rate has increased every year of the six-year period from 48
percent in 2003 to 51 percent in 2004 to 52 percent in 2005 to
55 percent in 2006 to 59 percent in 2007 to 61 percent in 2008.
The statewide penetration rate over the six-year period has been greater than TideWell's every year with the exception of 2005 when TideWell's penetration rate exceeded the statewide rate by one percent.
With the exception of 2005, TideWell's rate over the six-year period has been between eight percent and one percent lower than the statewide penetration rate. For the last two years of the period, 2007 and 2008, TideWell's penetration rate has been roughly two percent lower than the statewide penetration rate.
Suncoast's Penetration Rate in Pinellas County
In contrast to the relationship of TideWell's penetration rate to the statewide penetration rate, data provided by Suncoast showed its penetration rate in Pinellas County to have exceeded the statewide penetration rate in the years closest to the submission of its application.
In 2000 and 2001, Suncoast's penetration rate was nearly even with the statewide rate but it exceeded Florida's penetration rate by three percent or more for 2002, 2003 and 2004. In 2005, Suncoast's penetration rate exceeded the statewide rate by more than five percent.
Statutory Criteria; Section 408.035
Review criteria for CON determinations are contained in paragraphs (a) through (j) of Subsection 408.035(1), Florida Statutes. (Not all of the criteria require findings. For example, paragraph (j) relates solely to nursing facilities.)
The need for the health care facilities and services being proposed.
As explained, above, the FNP of one establishes a rebuttable presumption of need. The presumption was not rebutted by TideWell.
Availability, quality of care, accessibility and extent of utilization of existing health care services in the service district.
Over the years, TideWell's admissions in Manatee County have grown significantly: from 792 admissions in 1996 to 2,006 in 2008.
After a flattening of growth in 2004 and 2005, attributable to the impact of Hurricane Charlie, the more recent growth has been particularly significant. In 2006 Manatee County hospice admissions numbered 1,683; in 2007 there were 1,906; and, in 2008, there were 2,006.
Suncoast's entry into the Manatee County market place will increase availability. If Suncoast enters the Manatee County market and achieves penetration rates in excess of the statewide average penetration rate as it has done in Pinellas
County, it is likely that utilization rates will be higher than if TideWell remained the only provider of hospice services in Manatee County.
The projected utilization of the proposed hospice program was estimated in Suncoast's application using historical and projected population data for Manatee County and three-year average death rates, applied to the appropriate age category, assuming some modest growth in number of future deaths. TideWell's penetration rate was assumed to increase by one percent per year, consistent with the trend in Manatee County and statewide. The number of hospice admissions in Manatee County was projected forward to 2008 and 2009; and the last step in Suncoast's projection methodology was to estimate what market share Suncoast would achieve. It was assumed that by the end of the second year of operation, Suncoast would achieve a market share of 21 percent. This was applied to the projected number of admissions.
The projected utilization was updated before the hearing using more recent data and then compared to the track record of hospices in Service Areas with two hospices. Some Manatee County data had to be estimated because TideWell reports data to the state for its entire operation, serving three service areas. The result is 452 Suncoast admissions projected for 2011, the second year of operation. If Suncoast's
projections are achieved, the projected reductions in TideWell's admissions in Manatee County leaves admissions at a figure (1,702) in excess of TideWell's 2006 admissions.
TideWell provides high quality of care in Service Area
6C.
The ability of the applicant to provide quality of
care and the applicant's record of providing quality of care.
Suncoast has 18 interdisciplinary teams. Nurses, physicians, social workers, chaplains, home health aides, and volunteers comprise the teams. Team members often represent other disciplines: physical, occupational and speech therapy; dietary counselors; massage therapy; and those engaged in music therapy and other palliative arts.
Hospice services address physical and medical needs, such as controlling pain, as well as psychological, spiritual and social needs of patients with life-limiting illnesses. They also provide care for families of the patients. Suncoast provides interdisciplinary team care where the patient lives, whether at a residence, nursing home, or assisted living facility or to the homeless.
Suncoast has provided quality of care in the arena of hospice services and has the ability to continue to do so in Manatee County if its application is approved.
Suncoast has on staff eight full-time physicians, five nurse practitioners, and one physician's assistant. In addition, contract and volunteer physicians work with the teams by serving patients as well as physician groups and by performing consults.
Suncoast has 20 full-time clinically-trained chaplains and six part-time chaplains along with volunteer support and assistance from community clergy to provide direct patient care and follow-up with families in bereavement. Suncoast's interfaith community advisory councils assist in keeping up with service needs identified through faith communities.
Florida Administrative Code Rule 59C-1.0355(4)(e)2. provides a preference for applicants that propose to provide inpatient care through contractual arrangements. Suncoast currently provides inpatient care through contractual arrangements, so it has experience doing so. Its application proposes the following:
While a free-standing inpatient facility would not be feasible until the program matures in Manatee County, discussions with hospitals and nursing homes have made it clear that contracts for scatter-bed patients provision would be available.
Discussion with Lakewood Ranch Medical Center revealed that they would be very interested in contracting for a hospice inpatient unit, staffed with personnel.
Suncoast Ex. 1., Vol. 1, SC 0130. Contacted by Suncoast, Manatee County Hospital provided a tour of its facility to Suncoast personnel. Additionally, Westminster Retirement Community of Florida has two nursing homes in Manatee County and is willing to contract with Suncoast for beds in those facilities. Contracts have not been entered.
Suncoast was among the first programs in Florida to develop a Hospice Veteran Partnership and has provided assistance to set up programs in various areas of the state and nationally.
Suncoast has an affiliation with a Jewish-owned and operated nursing home to connect to the Jewish members of the community it serves.
Suncoast's application has conditions to provide or enhance services to populations traditionally underserved by hospice. For example, Suncoast "agrees to condition [its] application on achieving … [p]rovision of an AIDS program that will collaborate with existing AIDS Service Organizations in Manatee County in meeting the needs of hospice patients with HIV." Suncoast Ex. 1, Vol. 1 at SC 0221. There are several conditions which relate to serving the Hispanic population of Manatee County, a traditionally underserved group. Suncoast promises to develop a community advisory committee to be composed of residents "reflective of the community whose purpose
is to provide input and feedback about the needs of the Manatee County community and whose recommendations will be used in the future program development." Id. at SC 0222. If Suncoast does not implement the conditions, it will be subject to fines and other actions against its license. Suncoast has committed to serve populations whose needs are traditionally unserved. But there was no evidence that any of these groups are, in fact, un- served or underserved in Manatee County.
Suncoast, unlike most hospices, has a caregiver program that allows patients with either a frail caregiver or no caregiver to remain at home to die. Suncoast also trains respite and substitute caregivers.
Suncoast has a well-developed and in-depth pediatric hospice program. Suncoast has dedicated staff for this program, meaning they only work with children from the first encounter for admission throughout the care given to the pediatric patient.
Suncoast's children's hospice team has an excellent working relationship with All Children's Hospital, a tertiary hospital for children that serves several counties, including both Pinellas and Manatee. Suncoast has partnered with the University of California on a five-year National Institutes of Health grant to study bereaved fathers and develop clinical practices specific to that group. Recently, Suncoast was
selected to join a regional network to assist hospitals and hospices in starting pediatric hospice or palliative care programs. Under a grant through Children's Hospital and Clinics in Minneapolis, Minnesota, seven sites were selected to participate, Suncoast being the only hospice.
After hearing many families lament the difficult choice of selecting hospice for a child, Suncoast responded to the needs of these families by developing children's palliative care services. Suncoast was also among the first hospices in Florida to provide services under the PIC Medicaid waiver program. The program provides palliative care while the child continues curative treatment.
Suncoast provides community counseling services as part of its children's palliative care programs. Any family in Pinellas County, from a family dealing with an ill child undergoing curative care to a family bereaved by a tragedy as the result of an auto accident or shooting, can contact Suncoast and receive counseling support.
Suncoast also established the Suncoast Children's Care Coalition--a group of community representatives of services to children that works as the eyes and the ears of the community to identify and advise on services to meet community need.
Working with the State Victims' Association, Suncoast is actively involved in the adult and children's trauma network. Suncoast received an award for this work in May 2009.
Suncoast's perinatal loss program is the only hospice program of its type in the country. Suncoast works very closely with volunteer doulas or birth coaches who receive at least eight hours of interdisciplinary care training to assist families that know their child is likely to be stillborn or not survive beyond labor and delivery. Doulas and children's programs counselors are matched with families to provide information and support.
Suncoast provides adult palliative care services to reduce symptoms. Suncoast Supportive Care provides assistance through an interdisciplinary team for those whose life expectance is one year or less or who choose not to go into hospice or who otherwise would not qualify for hospice. Suncoast has relationships with several hospitals in Pinellas County for palliative care consults, and Suncoast's medical director is available for palliative care consults in any hospital. Suncoast also has a licensed home health agency to provide palliative care.
Suncoast has palliative arts volunteers who provide services to patients, community program clients, and trainings and presentations to the community. Also known as complementary
therapies, aromatherapy, massage therapy, music therapy, expressive arts, and energy works (or Reiki) are used in collaboration with western medicine to relieve symptoms.
Suncoast has a partnership with American Stage, a local theatre in Pinellas County. The two collaborated on a play called "Vesta" in which the title character is a woman facing the end of life. After performances of the play, staff speak with the audience about the play and issues raised.
Suncoast provides caregiver support through "caregiver coffee breaks." The programs are facilitated by a counselor and are offered at locations throughout the community and at varying times. The services are not reimbursed.
Suncoast provides a number of specialized bereavement groups to the community. For example, Kindred Hearts is Suncoast's suicide survivor group, which puts out a monthly newsletter. Persons attend from around Tampa Bay, including Manatee and Hillsborough Counties, because they have not found anything else that meets their needs. In addition, Suncoast personnel are available to respond to grief crises in the community and beyond. Suncoast teams were in Mississippi and Louisiana after hurricane Katrina and assisted after 9/11 to help people cope with loss and grief. These services are not reimbursed.
Suncoast has a children's bereavement program that extends to every school in Pinellas County and serves more than 2,000 children a year with loss and grief counseling.
Suncoast provides four different bereavement camps.
Camp Erin is a weekend bereavement camp for children ages 8-to-
15 years of age in Ellenton in Manatee County. For the past 14 years, Camp Hope has been a smaller camp for families. It provides bereavement for adults and children, both together and apart. "Cube," a bereavement retreat for teens, just completed its third year. Finally, there is a family fun day held each year with arts, crafts, entertainment, and activities that offer fun as well as support and networking for families with a child that has an illness or condition that is life-limiting.
Suncoast's staff undergo intense learning for the first 9-to-12 months of employment. Employees are assigned to a mentor or preceptor who oversees their training. Initially, all disciplines receive at least six or eight hours in pain and symptom management, with an additional 12 hours for nurses, pharmacists and physicians. Follow-up education is provided at the two-year mark. Anywhere from 50-to-80 continuing education courses are provided each month. Additionally, all clinic staff are provided laptops on which various references are provided weekly.
Diversity is an integral part of Suncoast. Most recently, diversity efforts have been combined into the Committee to Improve Cultural Awareness. The committee offers education internally and externally to increase understanding and respect for cultural differences. The committee meets monthly. It holds educational events, health fairs, and cultural events for staff and the community. Suncoast also has a Latino Advisory Council of members of the Latino community that helps identify needs of the Hispanic community. Suncoast has staff positions dedicated to outreach in the Latino and African-American communities. Suncoast recruits for diversity so that its employees reflect the community.
Much of what Suncoast is able to provide is through the assistance of community volunteers. Suncoast has between 2,800 and 3,000 volunteers, including 400 teen volunteers in the Teen Volunteer program. Volunteers do everything from providing direct patient care to administrative support, fundraising, and outreach. Medicare requires that five percent of total patient hours of care be provided by volunteers. Suncoast exceeds that requirement by several percent.
Volunteers receive an initial four-hour training to orient them to hospice and volunteerism. For volunteers desiring to perform patient care, an additional 16-to-18 hours of training is provided followed by mentored visits with the
teams. Suncoast is able to recruit, train, and retrain volunteers in Manatee County.
Suncoast HIV/AIDS services division, "ASAP," provides case management and a variety of service for adults and children who have HIV/AIDS or have a loved one with HIV/AIDS. Services range from providing condoms and safe sex education, to retreats, outings, counseling, and a personal needs pantry from which clients may obtain grocery and personal care items not covered by food stamps. Many of these services are not reimbursed.
The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation.
Suncoast has approximately 1,600 employees. Suncoast and its six affiliated organizations have an annual budget of approximately $150 million. Suncoast is not the subject of any outstanding fines, liens or overpayments.
Suncoast is financially efficient. Its operating expenses, including patient service expense, for fiscal year 2008 were $116.8 million. Its administrative and general expenses were just over $19 million, or 15 percent of total costs, a reflection of administrative efficiency.
Schedule 1 of Suncoast's application shows "estimated project costs." Schedule 2 shows all of Suncoast's capital
projects whether approved, under development, or planned, and the total capital commitment for both health care and other projects. Schedule 3 shows Suncoast's source of funds, and Schedule 4 depicts utilization of existing hospice by patient days. Each of the four schedules was accurate at the time the application was prepared.
Schedule 6 of Suncoast's application presents a reasonable estimate of the staffing that would be required for Suncoast's proposed project. The staffing estimate includes six FTEs "to take care of the conditions for this particular certificate of need application," tr. 300-01, as well.
The salaries shown on Schedule 6 are reasonable estimates of salaries for the staffing required to support the proposed project.
The extent to which the proposed services will enhance access to health care for residents of the service district.
Over the years it has operated in Pinellas County, Suncoast has proven that it is responsive to community needs for hospice services.
Hospice programs began in the United States in 1974.
Suncoast's program commenced in 1977 when a group composed of chaplains, educators, nurses, social workers, and local residents from "all walks of life," tr. 37, saw the need for hospice in Pinellas County. It was decided then that the
program would be not-for-profit and that the mission would be to serve any person in the community affected by death, dying, grief, or bereavement, regardless of ability to pay.
In keeping with its mission, Suncoast has multiple community advisory committees through which it identifies and meets community hospice needs. In 1981, for example, at a time when most home health agencies were turning down AIDS patients and hospitals were releasing them, Suncoast was one of the first programs to care for AIDS patients in their homes.
A recent example of Suncoast's attempt to increase access to hospice services is its "Touch a Life" program. Aware of spreading financial stress in the community typified by community members' decisions to stop paying health insurance premiums, their difficulty in affording medication, and their forgoing needed visits to physicians, every member of the Suncoast organization was asked to touch a life in some way each week. Within three months of the commencement of the program, 10,000 community members had been contacted with the outreach effort.
Suncoast's community service centers, dispersed throughout the community, are not only a resource for staff, but gathering places for the community with libraries, computers available for research, and volunteer staff.
Suncoast is affiliated with Suncoast Institute, a national center for hospice education, research, and end-of-life care. The institute's mission is to improve the way individuals and communities care for each other in the last years of life.
The institute provides training on a contractual basis, conference presentations, "train the trainer," tr. 247, sessions, and seminars via the Internet or webinars where individuals receive training to implement programs in their own communities.
In 2008, Suncoast, together with Morton Plant East Hospital, became one of only three accredited clinical pastoral education programs in the nation with training in end-of-life care. Training occurs across the whole continuum of care, whether in a hospital, nursing home, or inpatient hospice care.
At inception, Suncoast Institute had as a goal "trying to bridge the gap between academic research and practice." Tr. 253. It began networking with academicians at the University of South Florida (USF.) Today, along with other hospices including TideWell, the institute is part of a center at USF that studies end-of-life care.
The center at USF oversees a research agenda that links community provider needs with academic disciplines to provide meaningful research useful in the promotion of hospice and palliative care.
Suncoast has also participated through Suncoast Institute in collaboaration with university researchers at the University of Buffalo, Duke, Yale, Brown, Dartmouth, and various state university systems. The institute oversees student affiliations hosting 2,500-to-3,000 students a year that range from two-day observations to two-year internships, residencies, and fellowships. The affiliations span a broad spectrum of clinical disciplines such as pharmacy, nursing, social work and medicine and include non-clinical student affiliations in non- profit business management, finance, marketing, and community outreach.
The institute has a local speakers' bureau and provides continuing education for professionals in the local community. It provides up to a million student hours a year of training in the community and with staff.
Suncoast's community committees, outreach programs, its institute, and work in academic settings are likely to continue with as much vigor as in the past should its application be approved.
Services Suncoast intends to provide will duplicate services offered by TideWell. Nonetheless, it is reasonable to expect that with two different, competing and perhaps at times collaborating hospices, access to hospice services in Manatee
County will be enhanced should Suncoast's application be approved.
The immediate and long-term financial feasibility of the proposal.
Suncoast is a financially strong organization. Its most recent audited financial statement for the fiscal year ending September 30, 2008 shows $15,142,000 in cash and cash equivalents of $7,567,000. The approximate sum of the two,
$22.6 million, is a healthy financial reserve.
Unrestricted net assets shown in its Consolidated Statements of Financial Position for 2007 (revised) and 2008, see Suncoast Ex. 38, moreover, were $35,309,089 as of September 30, 2008.
Suncoast has the cash on hand to finance the proposed project. The parties have stipulated to the short-term financial feasibility of Suncoast's proposal.
As for determining long-term financial feasibility, Mr.Balsano, Suncoast's expert in health care finance, used a model developed on a fixed and variable expense basis. It incorporated accounts at the existing Suncoast Hospice in Pinellas County and "looked towards consistency in some of the revenue and expense relationships." Tr. 331. It made adjustments, however, for operations in Manatee County for patient care costs and some other operating costs, taking into
account administrative resources that would be shared with its Pinellas County operations. Assumptions made by Mr. Balsano were reasonable.
As source documents, the model used the Suncoast 2007 budget. It identified unique capital costs of depreciation associated with opening a hospice in Manatee County; supply expenses and revenue on a per-patient-day or per-admission relationship were assumed to be similar to those of Suncoast's Pinellas County operations.
The model was used to develop Schedule 7A of the application, which calls for projected revenues from operating years 1 and 2, and Schedule 8A, which calls for projected income and expenses for the same operating years.
Schedule 8A of the application projects a net operating loss at the end of the second operating year of
$269,689. Included in the loss are expenses of approximately
$250,000 for uncompensated care that Suncoast has committed to provide. Suncoast will provide $358,933 in non-operating revenues which will not only cover the "uncompensated care" loss but will produce a net profit in the second year of operation attributable to the Manatee County operations of $89,244. The contribution of non-operating revenues enables Suncoast to provide service beyond the Medicare benefit.
Suncoast's proposal is financially feasible in the long term.
The extent to which the proposal will foster competition that promotes quality and cost-effectiveness.
If its application is approved, Suncoast will compete with TideWell in Manatee County. Competition from Suncoast, a mission driven, not-for-profit, organization, should promote quality in Manatee County. In contrast to a for-profit organization that would seek to maximize profits by taking as many patients as possible whether at TideWell's expense or not, Suncoast is more likely to attempt to complement the programs offered by TideWell. There is potential for Suncoast to "add value to [the] service area," tr. 443, as Mr. Sullivan phrased it at hearing. It is reasonable to expect that added value will promote quality of care.
Suncoast and TideWell have collaborated in the past.
Whether the two will continue to collaborate should Suncoast's application be approved is an open question. Given the nature of their operations, however, there is a strong possibility of collaboration. If it continues, there will be an opportunity to achieve efficiencies.
(i) The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent.
Suncoast has a long history of providing hospice services to Medicaid patients and the medically indigent.
Consistent with its mission, Suncoast has made a conscious decision to provide needed services to hospice patients, whether fully reimbursed or not. These include instances where patients have some level of insurance but not all services are covered or cases where specific covered services are under-reimbursed. It also includes instances of when the patient has no ability to pay.
In its fiscal year ending September 30, 2006, Suncoast provided uncompensated care totaling $11.5 million. In its fiscal year ending September 30, 2008, Suncoast provided uncompensated care totaling roughly $11.7 million.
During 2006, a total of five percent of Suncoast's patient days were reimbursed by Medicaid and five percent were un-reimbursed charity care. At the time of hearing, Suncoast continued to provide charity care and Medicaid-reimbursed services at or above those levels.
In fiscal year 2008, Suncoast's loss from continuing operations was $1,370,000. It received funding from the Suncoast Foundation in that year that was more than enough to cover the loss.
Including all program expenses, both reimbursed and un-reimbursed, and all revenues from reimbursement or support from the community for non-reimbursed programs, Suncoast has operated at a profit. Suncoast's past profitability is
indicative of the likelihood that it will continue to be able to provide Medicaid services and charity care at levels it has provided in the past.
Because many of its programs are not funded through reimbursement by Medicare or private insurance, Suncoast has a fund-raising foundation. The Suncoast Foundation works to support the mission and programs of Suncoast and its affiliates. Its net assets at hearing were $31,690,000.
The foundation will coordinate funding in Manatee County by using a community-based, relationship-based approach.
The foundation has been successful in the past. In 2007, for example, the foundation raised approximately $9.3 million in contributions to fund its programs that did not generate adequate revenue.
The foundation has diverse revenue sources. It receives revenue from contributions, bequests, investment income, rental income, thrift stores, and other fundraisers. In the fiscal year ending September 30, 2008, the foundation received total revenues of approximately $1.7 million from thrift stores alone that netted approximately $750,000.
It is reasonable to expect, in light of Suncoast's history and recent performance, that approval of its application will assist in enhancing access to Manatee County's Medicaid patients and medically-indigent patients.
Impact to TideWell
TideWell is a financially healthy organization.
Based on projections found reasonable in this order, approval of Suncoast's application will leave TideWell with a substantial number of Manatee County admissions. TideWell's Manatee County admissions after Suncoast's approval will likely exceed the number of admissions of more than 90 percent of all hospices nationally.
Evidence presented reflected two ways of analyzing the impact of the application's approval on TideWell. The first, stressed by TideWell, is impact on its operations in Manatee County. The second, preferred by Suncoast, is impact on the entire entity of TideWell, that is, considering its operations in Charlotte and DeSoto Counties, Service Area 8A, and on its operations in Sarasota County, Service Area 8D, as well as its operations in Manatee County.
Impact in Manatee County Alone
A Growing Market.
The Manatee County market for hospice services has grown because of increasing penetration rates. The "Baby Boom" generation will begin turning 65 in 2011. Despite recent flatness in the death rate, the number of deaths in Manatee County is likely to stabilize or increase forward of the data produced at hearing.
The trend in hospice admissions is an upward one both in the state as a whole and in Manatee County. Between 2003 and 2008, the number of hospice admissions in Manatee County increased by 48 percent, "far in excess of any population growth." Tr. 986. The combination of factors that determines hospice admissions indicate that the demand for hospice services in Manatee County is likely to increase.
TideWell Quality of Care Post-Suncoast Approval.
TideWell maintains that if its admissions were reduced to an annual number of 1,702, as projected by Suncoast, its quality of care in Manatee County will be diminished.
There is no evidence that for the years 2004, 2005, and 2006, when it had fewer admissions than 1,702, TideWell provided care that was less-than-excellent quality of care. As Mr. Davidson put it at hearing, however, "[TideWell] was providing the best quality of care it could consistent with its volumes." Tr. 795.
Mr. Davidson's testimony with regard to quality of care based on reduced volume should Suncoast's application be approved was consistent with Ms. Maisto's testimony about programs that would be eliminated and jobs lost at TideWell should the application be approved. The cuts in programs and jobs are shown on TideWell Exhibit 19 and the exhibit is supported by testimony from Ms. Maisto. See Tr. 662-672. But
Ms. Maisto's testimony and the exhibit are dependent on TideWell's financial impact analysis.
Tidewell's Financial Impact Analysis.
TideWell predicts a financial loss to TideWell of approximately $1.3 million in the second year of Suncoast's operation in Manatee County.
There is no doubt that there will be a financial impact to TideWell as the result of a reduction in volume in Manatee County admissions, but TideWell overstates the projected impact. Furthermore, the impact to TideWell from the loss of Manatee County cases overlooks TideWell's status as a provider of hospice services in several service areas other than Service Area 6C.
Impact on the Entity TideWell
TideWell serves four contiguous counties: Manatee, Sarasota, Charlotte, and DeSoto. Most of TideWell's hospice activity is outside of Manatee County. In 2008, for example, 29 percent of TideWell's admissions were in Manatee County and 25 percent of its revenues were from Manatee County.
TideWell's management views the organization in the aggregate. The view is supported by other indicia. TideWell has one license, one accreditation, one Medicare provider number and its programs are on an organization-wide basis.
Likewise, when AHCA conducts surveys of TideWell, it does not limit its inquiry to Manatee County operations; it surveys all of TideWell.
Prior to 2009, TideWell did not track financial performance by the counties it served. It accounted for the organization as a whole over the four counties served.
Manatee County is not the leading region for TideWell. Sarasota County is regarded by TideWell as its "core business," Suncoast Exhibit 91, at 41, or as the most successful of the four counties it serves. TideWell's assessment is supported by the revenue generated from each county. Sarasota's gross revenue from operation is double the gross revenue from operations of the other three counties combined.
TideWell's admissions have grown over the recent past in the three counties it serves that are Manatee County's neighbors. From 2003 to 2008, TideWell's admissions in Sarasota, Charlotte, and DeSoto Counties increased from 3,313 to 4,828.
For Suncoast's second year of operation (considering TideWell's loss of admissions in Manatee County), Mr. Balsano projected that total admissions volume for TideWell as an entity in 2011 would be up 3.6 percent over 2008 and revenue would be increased 4.9 percent in the amount of $4,221,800. The projections are based on the assumption that TideWell's growth
in admissions from Sarasota, Charlotte and DeSoto Counties would be only half of historical growth. The projections are reasonable.
Reasonably projected growth in TideWell's admissions for all four counties and the concomitant reasonably projected increase in revenues mitigates the impact to TideWell's admissions and revenues if Suncoast's proposed hospice in Manatee County is approved.
Impact on Charitable Donations
TideWell's charity care and unfunded services in Manatee County are not fully covered by donations but the two types of services depend on donations for funding. They are the types of care and services which would be cut should funding levels require cuts within the organization.
In fiscal year 2007, TideWell received $823,000 in charitable contributions from Manatee County.
The bulk of TideWell's charitable contributions, however, come from outside Manatee County. For the same time period, fiscal year 2007, TideWell received more in charitable donations from outside the four counties than it received from Manatee County: approximately $1 million. From Sarasota County, alone, in fiscal year 2007 TideWell received $5 million, more than five times the amount of Manatee County donations.
To make up for lost revenue from the impact of lost admissions in Manatee County, TideWell will need to attempt to increase donations.
It is reasonable to expect that memorials and bequests associated with patients lost to Suncoast will be made to Suncoast. An increase in donations, therefore, will not be easily achieved. But it is not reasonable to expect that every charitable dollar raised by Suncoast in Manatee County will be a charitable dollar lost by TideWell.
TideWell and Suncoast already compete for charity dollars in Manatee County. (As of January 2008, Suncoast Foundation had 200 active donors from Manatee County.) Without doubt, that competition will sharpen if Suncoast's application is approved.
Nonetheless, the impact to TideWell's receipt of charitable contributions is not likely to be so material as to require denial of Suncoast's application.
CONCLUSIONS OF LAW
Jurisdiction
The Division of Administrative Hearings has jurisdiction over the subject matter and parties to this action.
§§ 120.569 and 120.57(1), Fla. Stat.
Standing
Suncoast and TideWell each have standing to participate in this proceeding. § 408.039(5), Fla. Stat. Burden of Proof
As an applicant, Suncoast has the burden of going forward with the evidence and the ultimate burden of persuasion that its application should be approved. Lawnwood Medical Center, Inc. v. AHCA, 678 So. 2d 421, 425-426 (Fla. 1st DCA 1996).
Balanced Consideration of CON Criteria
The award of a CON must be based on a balanced consideration of the applicable CON review criteria. See Balsam
v. Dep't of Health and Rehab. Services, 486 So. 2d 1341, 1349 (Fla. 1st DCA 1986). The weight to be given each criterion is not fixed but depends on the facts of the case. Collier Medical Center v. Dep't of Health and Rehabilitative Services, 462 So.
2d 83, 84 (Fla. 1st DCA 1985).
Need
On the basis of the presumption of need as the result of the FNP, a presumption that was not rebutted, need for Suncoast's program was established in this proceeding. Satisfaction of Statutory Criteria
The parties stipulated to the short-term financial feasibility of the Suncoast's application. Suncoast has
demonstrated that its application is financially feasible in the long term.
Suncoast's application, on balance, satisfies the statutory criteria.
Preferences in Rule
Subsection (4)(e) of the Hospice Programs Rule provides "preference to an applicant meeting one or more of the criteria specified in subparagraphs 1. through 5.":
Preference shall be given to an applicant who has a commitment to serve populations with unmet need;
Preference shall be given to an applicant who proposes to provide the inpatient care component of the hospice program through contractual arrangements with existing health care facilities, unless the applicant demonstrates a more cost- efficient alternative;
Preference shall be given to an applicant who has a commitment to serve patients who do not have primary caregivers at home; the homeless; and patients with AIDS;
In the case of proposals for a hospice service area comprised of three or more counties, preference shall be given to an applicant who has a commitment to establish a physical presence in an underserved county or counties;
Preference shall be given to an applicant who proposes to provide services that are not specifically covered by private insurance, Medicare or Medicaid.
Fla. Admin. Code R. 59C-1.0355(4)(e). Since Service Area 6C is only one county, Suncoast does not claim preference under paragraph (4)(e)4. But it claims preference under the remaining four preferences listed in the rule.
The claims raises the issue of "preference" with regard to whom since this is not a comparative review proceeding. With the withdrawal of the four other co-batched applications, Suncoast is the only applicant remaining to fill need for a new hospice program in Manatee County.
With regard to the preference in paragraph 1., Suncoast did not present evidence that there were any populations with unmet need in Manatee County. It is not entitled to preference under paragraph 1.
With regard to the preference in paragraph 2., Suncoast proposes contractual arrangements for inpatient care and has had preliminary talks with existing health care facilities in Manatee County but has not entered any contracts. Suncoast is entitled to the preference in paragraph 2., but it is not given great weight.
Suncoast is entitled to the preference in paragraph
It has demonstrated a commitment to serve patients who do not have a primary caregiver at home, the homeless, and patients with AIDS.
Likewise, Suncoast is entitled to the preference in paragraph 5. It proposes to provide services not specifically covered by private insurers, Medicare, or Medicaid.
Impact
Suncoast's proposed program cannot be implemented without a reduction initially in TideWell's historical utilization. It is the extremely rare case in which there would not be an impact on an existing hospice provider when a new provider enters a service area.
Findings in this order relate to both impact limited to TideWell in Manatee County, alone, and considered from the perspective of the entire TideWell entity. See Hope of
Southwest Florida v. AHCA, Case No. 03-4073 (DOAH Dec. 28, 2005; AHCA, April 13, 2006), para. 152, at 39-40. From either viewpoint, impact does not rise to the level that would support denial of the application.
Summary
In sum, there is a presumption of need prompted by the FNP. TideWell has not rebutted the presumption. On balance, Suncoast's application meets the applicable CON review criteria, and its application should be approved.
Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Agency for Health Care
Administration enter a final order that approves CON 9964, the application of Hospice of the Florida Suncoast, Inc., to establish a new hospice program in Service Area 6C, Manatee County.
DONE AND ENTERED this 26th day of February, 2010, in Tallahassee, Leon County, Florida.
S
DAVID M. MALONEY
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 2010.
COPIES FURNISHED:
Robert D. Newell, Jr., Esquire Newell, Terry & Douglas, P.A. 817 North Gadsden Street Tallahassee, Florida 32303
Lorraine M. Novak, Esquire
Agency for Health Care Administration 2727 Mahan Drive, Mail Stop No. 3 Tallahassee, Florida 32308
Paul H. Amundsen, Esquire Julia E. Smith, Esquire
502 East Park Avenue Tallahassee, Florida 32301
Richard J. Shoop, Agency Clerk
Agency for Health Care Administration 2727 Mahan Drive, Mail Station 3
Tallahassee, Florida 32308
Thomas W. Arnold, Secretary
Agency for Health Care Administration Fort Knox Building, Suite 3116
2727 Mahan Drive
Tallahassee, Florida 32308-5403
Justin Senior, General Counsel
Agency for Health Care Administration Fort Knox Building, Mail Stop 3
2727 Mahan Drive
Tallahassee, Florida 32308
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days fro the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this cause.
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 16, 2011 | Agency Final Order | |
| Feb. 26, 2010 | Recommended Order | Suncoast's CON application for a new hospice in Service Area 6C, Manatee County, should be approved. |
