STATE OF FLORIDA FILED

AGENCY FOR HEALTH CARE ADMINISTRATION AHCA

AGENCY CLERK

RENDITION NO.: AHCA-11- OCJB4-FOF-CON ZIii FEB -2 A o .·.·

CON NOS. 10066 - 10668 o- '+:,

ODYSSEY HEALTHCARE OF COLLIER COUNTY, INC. d/b/a ODYSSEY HEALTHCARE OF CENTRAL FLORIDA,

Petitioner,

v. DOAH CASE NO. 10-1605CON

AHCA CASE NO. 2010003085

HPH SOUTH, INC. and STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondents.

                                                                    I THE HOSPICE OF THE FLORIDA SUNCOAST d/b/a SUNCOAST HOSPICE,

Petitioner,

V. DOAH CASE NO. 10-1862CON

AHCA CASE NO. 2010003498

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION and HPH SOUTH, INC.,

Respondents. HPH SOUTH, INC.,

       ;/

Petitioner,

v. DOAH CASE NO. 10-1863CON

AHCA CASE NO. 2010003646

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION; THE HOSPICE OF THE FLORIDA SUNCOAST d/b/a SUNCOAST HOSPICE; and ODYSSEY HOSPICE OF COLLIER COUNTY, INC.,

Respondents.

                                                                   I

Filed February 4, 2011 10:15 AM Division of Administrative Hearings

FINAL ORDER

This case was referred to the Division of Administrative Hearings (DOAH) where the assigned Administrative Law Judge (ALJ), R. Bruce McK.ibben, conducted a formal administrative hearing. At issue in this proceeding is whether the Certificate of Need ("CON") applications filed by Odyssey Healthcare of Collier County, Inc. d/b/a Odyssey Healthcare of Central Florida ("Odyssey"), and HPH South, Inc. ("HPH") for a new hospice program in Agency for Health Care Administration ("AHCA" or "the Agency") Service Area 5B satisfy the statutory and rule criteria for approval; and, if so, which of the two applications best meets the applicable criteria for approval. The Recommended Order dated November 30, 2010 is attached

to this final order and incorporated herein by reference, except where noted infra.

RULINGS ON EXCEPTIONS

Odyssey and HPH filed exceptions to the Recommended Order. filed a response to exceptions.

In determining how to rule on the exceptions and whether to adopt the ALJ's Recommended Order in whole or in part, the Agency for Health Care Administration ("Agency" or "AHCA") must follow section 120.57(1)(/), Florida Statutes, which provides in pertinent part:

The agency may adopt the recommended order as the final order of the agency. The agency in its final order may reject or modify the conclusions of law over which it has substantive jurisdiction and interpretation of administrative rules over which it has substantive jurisdiction. When rejecting or modifying such conclusion of law or interpretation of administrative rule, the agency must state with particularity its reasons for rejecting or modifying such conclusion of law or interpretation of administrative rule and must make a finding that its substituted conclusion of law or interpretation of administrative rule is as or more reasonable than that which was rejected or modified. Rejection or modification of conclusions of law may not form the basis for rejection or modification of findings of fact. The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent

substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law....

§120.57(1)(/), Fla. Stat. Additionally, "[t]he final order shall include an explicit ruling on each exception, but an agency need not rule on an exception that does not clearly identify the disputed portion of the recommended order by page number or paragraph, that does not identify the legal basis for the exception, or that does not include appropriate and specific citations to the record."

§ 120.57(1)(k), Fla. Stat.

It is the sole prerogative of the Administrative Law Judge (ALJ) to consider the evidence, resolve conflicts in the evidence, judge the credibility of witnesses, draw permissible inferences from the evidence, and reach ultimate findings of fact based on the competent, substantial evidence of record. The Agency may reject an ALJ's findings only where there is no competent,

substantial evidence from which those findings can reasonably be inferred. See Heifetz v. Dep't

of Bus. Reg., 475 So.2d 1277, 1281 (Fla. 1st DCA 1985); Belleau v. Dep't ofEnvt'l Protection,

695 So.2d 1305 (Fla. 1st DCA 1997); Strickland v. Fla. A&M Univ., 799 So.2d 276, 278 (Fla. 1st DCA 2001). The Agency is not authorized to substitute its judgment for that of the ALJ by taking a different view of or placing greater weight on the same evidence, re-weighing the evidence, judging the credibility of witnesses, or otherwise interpreting the evidence to fit its desired ultimate conclusion. See Prysi v. Dep't of Health, 823 So.2d 823, 825 (Fla. 1st DCA

2002); Strickland, 799 So.2d at 279; Schrimsher v. Sch. Bd. Of Palm Beach County, 694 So.2d

856,860 (Fla. 4th DCA 1997); Heifetz, 475 So.2d at 1281; Wash & Dry Vending Co. v. Dep't of

Bus. Reg., 429 So. 2d 790, 792 (Fla. 3d DCA 1983); D'Antoni v. Dept. of Envtl. Prot., 22

F.A.L.R. 2879, 2880 (DEP, May 4, 2000); Brown v. Criminal Justice Standards & Training

Comm'n., 667 So.2d 977, 979 (Fla. 4th DCA 1996). Simply put, the Agency may not reject recommended findings of fact when the question turns on the weight or credibility of testimony

by witnesses, when the factual issues are otherwise susceptible of ordinary methods of proof, or when the Agency may not claim special insight as to those facts, if the finding is otherwise supported by competent, substantial evidence. See McDonald v. Dep't of Banking & Fin., 346

So.2d 569, 579 (Fla. 1st DCA 1977); Gross, 819 So.2d at 1002; Schrimsher, 694 So.2d at 860;

See also McGann v. Fla. Elections Comm'n, 803 So.2d 763, 764 (Fla. 1st DCA 2001) (concluding that an agency could not reject ALJ's finding of fact on ultimate issue of

"willfulness" by recasting findings as a conclusion of law); Harac v. Dep't of Profl Reg., 484 So.2d 1333, 1337 (Fla. 3d DCA 1986) (stating that the agency was not permitted to substitute its findings for those of ALJ on issue of architect's "competency," even though the determination of design competency required specialized knowledge and experience, because it is not so unique as to defy ordinary methods of proof in formal adversarial proceedings).

In accordance with these legal standards, the Agency makes the following rulings:

Odyssey's Exceptions

In Exception Number 1, Odyssey takes exception to the portion of Paragraph 14 of the Recommended Order, wherein the ALJ finds that "[ u]nlike the applicants, Suncoast does not use the Medicare conditions or definitions to limit or define the scope of services it provides." Odyssey argues that there is no competent, substantial evidence to show that Odyssey limits the scope of services it provides to the Medicare conditions or limitations. There is competent, substantial evidence to support the finding that "Suncoast does not use the Medicare conditions

or definitions to limit or define the scope of services it provides." See, , Transcript, Volume 14, Pages 1395 and 1460. Additionally, there is competent, substantial evidence from which the ALJ could have reasonably inferred that the two applicants did use the Medicare conditions or

definitions to limit or define the scope of services they provide. See, , Transcript, Volume 2,

Pages 228-229 (HPH); and Transcript, Volume 8, Page 840 (Odyssey). Thus, the Agency is not at liberty to reject or modify the ALJ's findings of fact. See § 120.57(1)(/), Fla. Stat.; Heifetz. Therefore, Exception Number 1 is denied.

In Exception Number 2, Odyssey takes exception to the portions of Paragraphs 40 and 61 of the Recommended Order, wherein the ALJ stated that he did not give much weight to the letters of support Odyssey submitted from its 2007 CON application because of their age, arguing that the ALJ erred in making such findings. However, these findings directly relate to the weight the ALJ gave to evidence submitted in this matter, and thus the Agency has no power to re-weigh that evidence in order to make contrary findings. See Heifetz. Therefore, the Agency must deny Exception Number 2.

In Exception Number 3, Odyssey takes exception to the portion of Paragraph 56 of the Recommended Order, wherein the ALJ found that "Odyssey identifies a referral as a telephone call from a family member, even if the call is simply an inquiry as to what services might be available." According to Odyssey, this finding of fact was not based on competent, substantial evidence. However, the finding at issue is a reasonable inference based on competent, substantial evidence. See Transcript, Volume 8, page 901. Thus, the Agency cannot reject or modify it. See § 120.57(1)(/), Fla. Stat.; Heifetz. Therefore, the Agency denies Exception Number 3.

In Exception Number 4, Odyssey takes exception to the portion of Paragraph 60 of the Recommended Order, wherein the ALJ found that "[t]he state health plan addresses the concept of letters of support." Odyssey argues that there is no competent, substantial evidence to support this finding. However, the ALJ's finding of fact is a reasonable inference based on the language

of Rule 59C-1.0355(5), F.A.C. Thus, the Agency cannot reject or modify it. Therefore, the Agency must deny Exception Number 4.

In Exception Number 5, Odyssey takes exception to the findings of fact in Paragraph 61 of the Recommended Order "to the extent that the Finding of Fact suggests that the mere number of letters of support submitted by HPH lends credence to HPH's application." However, what a finding of fact may or may not suggest is irrelevant. Because the findings of fact in Paragraph

61 of the Recommended Order are based on competent, substantial evidence (See Transcript, Volume 4, Pages 442-446; and Transcript, Volume 8, Pages 845-847) the Agency is not permitted to reject or modify them. See § 120.57(1)(/), Fla. Stat.; Heifetz. Therefore, the Agency denies Exception Number 5.

In Exception Number 6, Odyssey takes exception to the findings of fact in Paragraph 76 of the Recommended Order, arguing that there is no competent, substantial evidence to support a finding of fact that an applicant who is an existing provider in an adjoining district should receive a preference or credit in a comparative review. However, the findings of fact in Paragraph 76 of the Recommended Order state no such thing. Moreover, the findings of fact in Paragraph 76 of the Recommended Order are based on competent, substantial evidence. See Transcript, Volume 1, Pages 61-65, 96-99, 101-102 and 104; Transcript, Volume 2, Pages 262-

263. Thus, the Agency is not at liberty to reject or modify them. See § 120.57(1)(/), Fla. Stat.;

Heifetz. Therefore, the Agency must deny Exception Number 6.

HPH's Exceptions

In Exception No. 1, HPH takes exception to the conclusions of law in Paragraphs 101, 102 and 107 of the Recommended Order because the ALJ erred in concluding that HPH did not demonstrate the presence of special circumstances that warranted the approval of its CON

application. Pursuant to Rule 59C-1.0355(4)(d), F.A.C., a hospice CON applicant must demonstrate that 1) a specific terminally ill population is not being served; 2) a county or counties within the service area of a licensed hospice program are not being served; or 3) there are a specific number of persons referred to hospice programs who are not being admitted within

48 hours. In regards to the first criteria, the Agency interprets it to allow applicants to demonstrate that the specific terminally ill populations that the applicant has identified as not being served are actually underserved populations. These populations would include 1) patients residing in assisted living facilities; 2) patients in need of continuous care; and 3) medically complex patients. HPH includes an extensive list of facts it believes justifies the approval of its CON application. However, none of those facts demonstrates the existence of special circumstances under the any of the three criteria listed in Rule 59C-1.0355(4)(d), F.A.C. Thus, even if there are other special circumstances that may warrant the approval of HPH's CON application, the absence of any of the three special circumstances listed in the rule must result in the denial of HPH's CON application. Any other interpretation of the rule, as encouraged by HPH, would be erroneous and contrary to established legal precedent. Thus, the Agency finds that, while it does have substantive jurisdiction over the conclusions of law and interpretations of Agency rules that are contained within Paragraphs 101, 102 and 107 of the Recommended Order since it is the single state agency that has been charged with the administration of the CON program in Florida, it could not substitute conclusions of law and interpretations of Agency rules that are as or more reasonable than those of the ALJ. Therefore, the Agency must deny Exception No. 1.

In Exception No. 2, HPH takes exception to the findings of fact in Paragraph 27 of the Recommended Order, and the conclusions of law in Paragraphs 98 and 101 of the Recommended

Order and Endnotes 4, 5 and 6 of the Recommended Order. HPH argues the ALJ erred in finding and concluding that, in the absence of numeric need, a CON applicant for a new hospice program must document the existence of one of three special circumstances as delineated in Rule 59C-l.0355(4)(d), F.A.C, in order for the Agency to approve its application. However, HPH is incorrect in its argument. The plain language of Rule 59C-l.0355(4), F.A.C., states that "[a]pplications to establish a new hospice program shall not be approved in the absence of a numeric need indicated by the formula in paragraph (4)(a) of this rule, unless other criteria in this

rule and in Sections 408.035 and 408.043(2), F.S., outweigh the lack of a numeric need." (Emphasis added). Furthermore, HPH misinterprets Hope of SW Florida v. AHCA, 27 FALR 2272 (AHCA 2005), for it did not stand for the proposition that a hospice CON application could demonstrate other "not normal circumstances" instead of the three special circumstances delineated in Rule 59C-l.0355(4)(d), F.A.C. Rather, the rule does not prohibit hospice CON

applicants from showing that other "not normal circumstances" in addition to the ones delineated in the rule exist in the service area. Thus, in the absence of numeric need, a hospice CON applicant must demonstrate that the presence of at least one of the 3 special circumstances listed in Rule 59C-l.0355(4)(d), F.A.C., and any of the criteria in §§ 408.035 and 408.043(2), Fla. Stat., outweigh the absence of numeric need in order to warrant approval. Therefore, the Agency finds that, while it does have it does have substantive jurisdiction over the ALJ's conclusions of law and interpretation of Agency rules in these paragraphs, it could not substitute conclusions of law and interpretations of Agency rules that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Exception No. 2.

In Exception No. 3, HPH takes exception to the findings of fact in Paragraphs 51, 55, 59, 86 and 87 of the Recommended Order, and the conclusions of law in Paragraphs 99 and 102 of

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the Recommended Order. HPH argues that the ALJ's findings of fact in Paragraphs 51, 55, 59, 86 and 87 of the Recommended Order were not based on competent, substantial evidence, and that, to the extent they could be construed as conclusions of law, the ALJ misinterpreted an area of law within the Agency's substantive jurisdiction. HPH also argues that the ALJ erred in his conclusions of law in Paragraphs 99 and 102 of the Recommended Order because he misinterpreted an area of law that is within the Agency's substantive jurisdiction. The gist of HPH's argument is that the ALJ construed the special circumstances provision of Rule 59C­ l.0355, F.A.C., too narrowly by requiring HPH to show that an indentified group was not being served, instead of showing that an identified group was being underserved. However, HPH is trying to twist the ALJ's words. It is clear from the ALJ's conclusions of law in Paragraph 99 of the Recommended Order that the ALJ understood AHCA's interpretation of the rule and applied it accordingly. The Agency finds that, while it does have substantive jurisdiction over the conclusions of law in Paragraphs 99 and 102, it could not substitute conclusions of law that are as or more reasonable than those of the ALJ. The findings of fact in Paragraphs 59, 86 and 87 of the Recommended Order are ultimate findings of fact that the ALJ reached after weighing the record evidence. HPH is essentially asking the Agency to re-weigh the record evidence in order

to reach different findings. However, the Agency is prohibited from doing so. See Heifetz. In regards to the findings of fact in Paragraphs 51 and 55 of the Recommended Order, those

findings were based on competent, substantial evidence (See Transcript, Volume 4, Page 572; Transcript, Volume 15, Pages 1543-1545; HPH Exhibit 2; HPH Exhibit 15; and HPH Exhibit 72), and thus cannot be rejected or modified by the Agency. See § 120.57(1)([), Fla. Stat.;

Heifetz. Therefore, the Agency denies Exception No. 3.

In Exception No. 4, HPH takes exception to the portion of Paragraph 53 of the Recommended Order, wherein the ALJ found that HPH's application condition of providing 3 percent of its patient days for continuous care patients was a "projection of intent." HPH argues the finding should be rejected as a matter of law. However, HPH's argument concerns the weight the ALJ gave to record evidence, which is area outside of the Agency's substantive

jurisdiction. See Barfield v. Dep't of Health, 805 So.2d 1008 (Fla. 1st DCA 2001). Therefore, the Agency must deny Exception No. 4.

In Exception No. 5, HPH takes exception to the conclusions oflaw in Paragraph 101 and Endnote 3 of the Recommended Order that concern Suncoast Hospice's misreporting of utilization data. HPH argues the Agency should reject these conclusions of law because they are inconsistent with the Agency's position in another hospice CON case. The case to which HPH is

referring is that of Tidewell Hospice and Palliative Care, Inc. v. Agency for Health Care

Administration and Hospice of the Florida Suncoast, Inc., DOAH Case No. 07-1265CON (currently pending at DOAH). However, there is a key distinction between this case and the

Tidewell case. In Tidewell, the Agency remanded the matter back to DOAH because, the issue of whether Suncoast had misreported utilization data was not discovered until after the final hearing, thus preventing the parties from having the opportunity to litigate the issue. Here, HPH had the opportunity to, and initially did, litigate the issue by challenging the Agency's fix needed pool numbers for Service Area 5B. However, it voluntarily agreed to dismiss the case. Therefore, it should not be permitted to resurrect the issue at this point in time. By dropping the fixed need pool litigation HPH consented to the accuracy of the Agency's calculations and must live with the result that there is no numeric need for a new hospice program in Service Area 5B. Therefore, both applicants must demonstrate need under the special circumstances criteria of

Rule 59C-1.0355(4)(d), F.A.C., as well as the other relevant statutory and rule criteria. Additionally, it is somewhat disingenious of HPH to drop its fixed need pool litigation and then resurrect the issue under the guise of it being a special circumstance. HPH must live and die with the numbers as they stand, and must point to other special circumstances in order to justify the approval of its CON application. Thus, the Agency finds that, while it does have substantive jurisdiction over the conclusions of law in Paragraph 101 and Endnote 3 of the Recommended Order, it could not substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Exception No. 5.

In Exception No. 6, HPH puts forth an alternative Motion for Remand in the event the Agency determines additional fact finding is needed as an alternative to Exception No. 1. Based

on the rulings on Exception Nos. 1 - 5 supr the Agency denies HPH's Motion for Remand.

FINDINGS OF FACT

The Agency hereby adopts the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The Agency adopts the conclusions oflaw set forth in the Recommended Order.

ORDER

Based upon the foregoing, both Odyssey and HPH's CON applications are hereby denied.

DONE and ORDERED this.df( day Qfl.kl 4-t·tf

2011, in Tallahassee, Florida

ELIZABET UDEK, INTERIM SECRETARY AGENCY FOR EALTH CARE ADMINISTRATION

NOTICE OF RIGHT TO JUDICIAL REVIEW

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 THE 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 WITIDN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

.201<:5· ? -

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. Mail, or by the method indicated, to the persons named below on this

  dayof   f/        

RICHARD J. SHOOP, AZ:             

Agency for Health Care Administration 2727 Mahan Drive, MS #3

Tallahassee, Florida 32308-5403

(850) 412-3630

COPIES FURNISHED TO:

Honorable R. Bruce McKibben Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

Geoffrey D. Smith, Esquire Timothy B. Elliott, Esquire Corinne T. Porcher, Esquire Smith & Associates

2873 Remington Green Circle Tallahassee, Florida 32308

Paul H. Amundsen, Esquire Julia E. Smith, Esquire Ruden Mcclosky

215 South Monroe Street, Suite 815

Tallahassee, Florida 32301

Lorraine M. Novak, Esquire Assistant General Counsel

Agency for Health Care Administration 2727 Mahan Drive, MS #3

Tallahassee, Florida 32308

Mark A. Emanuele, Esquire Deborah Platz, Esquire

Panza, Mauer & Maynard, P.A.

3600 North Federal Highway, Third Floor Fort Lauderdale, Florida 33308

Elizabeth Dudek

Health Quality Assurance

Jan Mills

Facilities Intake Unit

Docket for Case No: 10-001605CON

Orders for Case No: 10-001605CON