STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COMMUNITY HOSPICE OF NORTHEAST ) FLORIDA, INC., )

)

Petitioner, )

)

vs. )

)

AGENCY FOR HEALTH CARE ) ADMINISTRATION; UNITED HOSPICE ) OF FLORIDA, INC.; AND VITAS ) HEALTHCARE CORPORATION OF )

FLORIDA, )

)

Respondents. )

Case Nos. 10-1865CON

10-1866CON

10-1867CON

)

RECOMMENDED ORDER

This case was heard, as noticed, on October 25-28, 2010; November 1-5, 2010; and November 9-10, 2010, in Tallahassee, Florida, before Administrative Law Judge John D. C. Newton, II, of the Division of Administrative Hearings.

APPEARANCES

For Petitioner Community Hospice of Northeast Florida,

Inc.:

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, Suite 3431

Tallahassee, Florida 32308

For Respondent United Hospice of Florida, Inc.:

Geoffrey D. Smith, Esquire Timothy B. Elliott, Esquire Smith & Associates

2834 Remington Green Circle, Second Floor Tallahassee, Florida 32308

For Respondent VITAS Healthcare Corporation of Florida:

R. Terry Rigsby, Esquire

W. Douglas Hall, Esquire Carlton Fields, P.A.

215 South Monroe Street, Suite 500 Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

Does Certificate of Need (CON) Application 10065 of VITAS Healthcare Corporation of Florida (VITAS) or CON Application 10064 of United Hospice of Florida, Inc. (United), or both, best meet the CON criteria to establish a new hospice program in Service Area 4A (Area 4A), consisting of Duval, Clay, Baker, Nassau, and St. Johns Counties?

PRELIMINARY STATEMENT

The Agency for Health Care Administration (AHCA) published a fixed numeric need for one new hospice program in Area 4A for the second 2009 ―Other Beds and Programs‖ Batching Cycle. No one challenged the published fixed need determination.

Compassionate Care Hospice of Florida, Inc. (Compassionate), Odyssey HealthCare of Collier County, Inc. (Odyssey), Seasons Palliative Care of Florida, Inc. (Seasons), United, and VITAS each submitted letters of intent, initial

applications, and omissions responses proposing to establish a new hospice program in Area 4A. AHCA issued its State Agency Action Report (SAAR) preliminarily approving VITAS (CON Application 10065) and denying the others. AHCA published notice of the decision in the March 5, 2010, Florida Administrative Weekly, Volume 36, No. 9, pg. 1079.

United and Odyssey filed petitions challenging their respective denials and the approval of VITAS. Community Hospice filed a petition challenging all co-batched applications. VITAS filed a petition supporting its approval and AHCA's denial of the other applications. Other applicants and existing providers filed petitions.

AHCA referred the petitions to DOAH, and DOAH consolidated the cases. Several parties dismissed their petitions. By the time of the final hearing, the remaining parties were Community, VITAS, United, and AHCA. Community did not oppose approval of one application. It maintained, however, that only one should be approved. The final hearing in the consolidated cases convened on October 25, 2010, and concluded on November 9, 2010.

VITAS presented the testimony of Ronald Fried, Senior Vice President of Development and Public Affairs for VITAS Healthcare Corporation (VHC), accepted as an expert in hospice development; Diane Deese, Director of Community Affairs for VHC; Robert Miller, Vice President of Clinical Development and Bioethics for

VHC, accepted as an expert in hospice chaplaincy, spiritual care and clinical pastoral education; Thad Jaracz, Senior Director of Corporate Services for VHC, accepted as an expert in hospice services for veterans; Dian Backoff, Vice President of Operations for VHC, accepted as an expert in hospice operations/administration; Sarah McKinnon, Senior Director of Education and Organizational Development for VHC, accepted as an expert in hospice education and training; Robin Fiorelli, Senior Director of Bereavement Volunteers, accepted as an expert in hospice clinical social work and bereavement services; Barry Kinzbrunner, M.D., Executive Vice President and Chief Medical Officer of VHC, accepted as an expert in hospice and palliative care medicine; Ronald Luke, Ph.D., J.D., accepted as an expert in health planning and health finance; and Neil Golub, Senior Director of Planning and Analysis for VHC, accepted as an expert in hospice finance and accounting. VITAS Exhibits 1-17, 19, 21, 23-29, 30 (last two bullet points on right-hand column not admitted), 31-43, 45-46, 48-49, 51, 54-57, 63-69, 71, 75-76, 77

(only pages 5-12, 13-16, 19-20) and VITAS rebuttal Exhibit 77 (only pages 2-3) were admitted into evidence

United presented the testimony of Patricia Greenberg, accepted as an expert in health planning; Scott Shull, Senior Vice President of Strategy for UHS-Pruitt; Mary Bradley, Director of Clinical Services for United Hospice; Leann Ensley,

Regional Director of United Hospice of North Georgia; Claudia Warren-Wheat, Social Work Consultant for United Hospice; and Michael Hampton Groover, M.D., Corporate Medical Director of United Hospice. United Exhibits 1-2, 4 (only 4.1-4.13, 4.15,

4.17, 4.19-4.20, 4.23-4.26), 8 (only 8-1, 8-2, 8-3, 8-5, 8-6, 8-

7), 11-13, 17, 20-25, and United rebuttal Exhibit 26 (only pages 64-95 and related Exhibits) were admitted into evidence.

Community Hospice presented the testimony of Susan Ponder- Stansel, President and CEO of Community Hospice, and Thomas Davidson, accepted as an expert in health care planning and healthcare finance. Community Hospice Exhibits 1-3, 4 (only tabs 23-25), 5, 6 (pages 6.1 – 6.4), 7-8, 9 (pages 9.1-9.4), 10-

14, 17, and 19-20 were admitted into evidence.

AHCA Exhibits 1-3 were admitted into evidence.

The parties ordered a transcript, which was filed December 1, 2010. After receiving several extensions of time, the parties timely filed Proposed Recommended Orders. AHCA joined in VITAS's Proposed Recommended Order. All of the proposed recommended orders, testimony, and exhibits have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The Parties

   
   

   1. AHCA

      
      

      1. AHCA is the state agency responsible for the administration of Florida's Certificate of Need (CON) Program. It is the only state agency with authority to issue, revoke, or deny certificates of need.

   2. VITAS

      
      

      1. VITAS is a for-profit Florida corporation presently licensed and Medicare/Medicaid certified. It is the oldest, largest, and most experienced hospice service provider in Florida.

      2. VITAS is a wholly-owned subsidiary of VITAS Healthcare Corporation (VHC). VHC is headquartered in Miami. It operates over 40 hospice programs nationwide. VHC has approximately 10,000 employees and cares for about 12,000 terminally ill patients each day.

      3. VITAS and its predecessor entities date back to the mid-seventies when Hugh Westbrook, an ordained United Methodist minister, and Esther Colliflower, a registered nurse, organized a group of hospice volunteers. In order to raise capital to expand its operations, VHC converted to for-profit status in 1992. At that time Chemed Corporation purchased a minority interest.

         
         

      4. VHC expanded greatly during the 1990s. Chemed largely funded this period of expansion. Chemed acquired 100% of VHC n 2004. The acquisition did not cause operational changes. Most of the senior management remained after the acquisition.

      5. VHC is a hospice industry leader and a socially responsible company. It has been largely focused on hospice care since its start in the late 1970s.

      6. VHC's core values are:

         
         

         Patients and families come first; We take care of each other; and

         We pledge to do our best today and even better tomorrow.

         
         

      7. VITAS’ significant involvement with the National Hospice and Palliative Care Organization’s and local ethics committees manifests its social responsibility. VITAS is also involved with Certified Pastoral Education programs.

   3. United

      
      

      1. United is a wholly-owned subsidiary of UHS-Pruitt Corporation (UHS-Pruitt), a family-owned, for-profit corporation. United provides long-term care, hospice, home health, and community based services for the elderly. United is also a socially responsible company.

      2. UHS-Pruitt, through its affiliates in United Hospice, successfully operates 25 hospice programs in Georgia, South

         
         

         Carolina, and North Carolina. All of the programs were start- ups as opposed to acquisitions.

      3. UHS-Pruitt is the largest provider of community nursing home services in Georgia. It is one of the largest providers of hospice services in the southeastern United States.

      4. In the early 1990s, Neil Pruitt, Sr., the founder of UHS Pruitt, determined that community nursing home services would not be the model of care delivery for the elderly in the future. He concluded that home and community-based programs such as hospice, home heath, durable medical equipment, and other alternatives to institutional care should be the company's direction.

      5. UHS-Pruitt's emphasis on home and community-based services has succeeded. Today, it provides a full continuum of health care services for the elderly, including 71 long-term care facilities, 25 hospice programs, 13 home health agencies, five pharmacies, a healthcare management company, a nutritional services company, a clinical service company, and 14 Medicaid diversion and case management programs.

      6. UHS-Pruitt subsidiaries and divisions support United's hospice operations. The subsidiaries and divisions include: (a) United Clinical, which provides clinical consultants and expertise and support services for a full range of health care professions; (b) United Pharmacy, with Doctor of Pharmacy

         
         

         consultants that review each hospice patient's medication regimen; (c) United Rehab, which provides physical and occupational therapies to end of life patients to improve quality of life; (d) United Medical, a full service Durable Medical Equipment and home equipment company; (e) United Home Care, offering a full range of home health services; (f) United Community Services, which provides services such as meals, outdoor activities and monthly field trips; and (g) United Care Management, which operates Medicaid nursing home diversion programs.

      7. United offers specialized programs for specific end- of-life patients and their families. Camp Cocoon, a children's grief camp open to any child who has lost a loved one, is one example. United is also the largest provider of post-acute services to veterans in the Southeast. United Veterans Services provides specialized services to veterans participating in all United Hospice programs. It also operates nine specifically certified Veterans Nursing Homes, five in Georgia and four in North Carolina. The Georgia facilities partner with the Veterans Administration to provide hospice services.

   4. Community

   
   

   1. Community is a Florida, private, non-profit corporation. Community is also a socially responsible company. It operates a full service hospice in Area 4A.

      
      

   2. Community employs approximately 800 people who provide hospice care to an average daily census of 1,100 patients and their families. Community's annual operating budget is

      $70,000,000. Community has one or more offices located in each of the 5 counties in Area 4A, except for Baker County.

   3. Community is Medicare and Medicaid certified.

      
      

      Approximately 80% of Community’s patients are Medicare patients. Medicare pays a fixed rate per day for each of the four levels of care that Medicare requires a certified hospice to deliver.

   4. During its 20-plus years of existence, Community and its volunteer board and foundation have reinvested all revenues in excess of expenses, including donations, back into patient care and serving the community in Area 4A.

   5. Community’s main office and a 38-bed hospice general inpatient and residential facility, the Hadlow Center, are located on a campus in southern Duval County to serve the most densely populated area of consolidated Jacksonville/Duval County.

   6. Community's Acosta Rua Center is a freestanding inpatient and residential facility on the West side of Duval County. Acosta Rua has 16 general inpatient beds that can also be used as residential beds. Community selected the location for Acosta Rua because it is accessible to patients from rural Baker and western Clay County and is in an area heavily

      
      

      populated with lower income elderly persons and African- Americans.

   7. Community located its McGraw Center for Caring, a freestanding general inpatient and residential bed facility, on the Mayo Clinic campus. This location facilitates access for patients in east Duval, northern St. John’s, and southern and southeastern Nassau Counties.

   8. Community also operates a dedicated hospice general inpatient and residential bed facility in the Pavilion at Shands Hospital in Jacksonville. Community located the facility at Shands to make it available to a large population of inner city, lower income residents who use Shands.

   9. In 2011, Community will open a dedicated general inpatient and residential bed unit at Flagler Hospital. The unit will serve patients and families in the southern part of the Service Area, southern St Johns, and south and east Clay Counties. The unit will be like all of Community’s freestanding facilities and units — homelike and designed to provide end of life care with dignity.

   10. In addition to its freestanding and dedicated inpatient and residential units, Community contracts with local hospitals for available acute care beds in the hospital, if needed.

       
       

   11. Community operates a variety of programs that provide services beyond the required minimum standards and levels of care. Examples of its programs include Community Peds Care, enhanced and extended bereavement services, veterans outreach, Camp Healing Powers for children, advanced care planning, and community professional education on end of life issues.

   12. Community operates the Neviaser Institute, on its Hadlow campus. The Institute provides professional end of life, health care, and community education to Community's staff and residents of Area 4A.

   13. Outreach programs and freestanding facilities, like Community’s, take years to develop. They involve partnerships built on trust, over the long term, with other community health care providers in Area 4A and the community. One example is the "Community Peds Care" program. The program currently serves 117 children facing end of life and their families. Community partners with the State, Nemours Children’s Clinic, the University of Florida, and Shands Hospital Jacksonville for this program. Its services go beyond hospice care. It includes perinatal planning for women at risk. The interdisciplinary, multi-provider "Community Peds Care" program is not restricted to insured or Medicaid patients. "Peds Care" in its present form took three iterations and a decade to succeed. Community

       
       

       spends $640,000 a year in connection with its participation in the Community Peds Care partnership.

   14. Community is the only hospice provider in Area 4A that operates freestanding hospice inpatient and residential facilities and dedicated units on hospital campuses, staffed exclusively by hospice personnel. Community’s inpatient and residential facilities and units also provide homelike accommodations (residential beds), on a sliding fee scale, for hospice patients who are temporarily or permanently homeless and are receiving the routine home care level of hospice care.

   15. Community has put its financial capital at risk to create program enhancements with an understanding that competition in the market, for the finite set of hospice patients in Area 4A, would increase every time a new provider is added. Community was aware that CON regulations permitted approval of new hospice providers when application of the regulations resulted in the "need" for a new provider.

       Community was also aware that the regulations permitted approval of a new provider in "not normal" circumstances, even if the "need" rule did not project the need for a new provider.

2. Overview of Hospice Services

   
   

   1. Florida and federal laws and rules require hospice programs to provide a continuum of palliative and supportive care for terminally ill patients and their families. Palliative

      
      

      care generally refers to services or interventions that are not curative but are provided for the reduction or abatement of pain and suffering.

   2. Under Florida law, a terminally ill patient may qualify for hospice care if his or her life expectancy is one year or less if the illness runs its normal course. Under Medicare, a terminally ill patient is eligible for the Medicare Hospice Benefit if the patient's life expectancy is six months or less.

   3. A provider must make hospice services available 24 hours a day, seven days a week. The services provided must include nursing, social work, pastoral care or spiritual counseling, dietary counseling, and bereavement counseling. A hospice may provide physician services directly or through contract.

   4. Hospices must provide four levels of hospice care: routine, continuous, in-patient and respite. A hospice provides services to a patient and family either directly or by others under contractual arrangements with a hospice. A hospice may provide services in a patient's temporary or permanent residence. If the patient needs short-term institutionalization, the hospice provides services in cooperation with contracted institutions or in a hospice inpatient facility.

      
      

   5. Routine home care makes up the vast majority of hospice patient days. Florida law states that hospice care and services provided in a private home shall be the primary form of care. Hospice care and services, to the extent practical and compatible with the needs and preferences of the patient, may be provided by the hospice care team to a patient living in an assisted living facility (ALF), adult family-care home, nursing home, hospice residential unit or facility, or other nondomestic place of permanent or temporary residence.

   6. A resident or patient living in an ALF, nursing home, or other facility who has been admitted to a hospice program is considered a hospice patient. The hospice program is responsible for coordinating and ensuring the delivery of hospice care and services to the person consistent with statutory and rule requirements.

   7. The inpatient level of hospice care provides an intensive level of care within a hospital setting, a skilled nursing unit, or in a freestanding hospice inpatient facility. Inpatient care is a short-term adjunct to hospice home care and home residential care. It should only be used for pain control, symptom management, or respite care in a limited manner. In Florida, the total number of inpatient days for all hospice patients in any 12-month period may not exceed 20% of the total

      
      

      number of hospice days for all the hospice patients of the licensed hospice.

   8. Continuous care is basically emergency room or crisis care. It may be provided in a home care setting or in any setting where the patient resides. Continuous care, like inpatient care, was designed to be provided for short periods of time, usually when symptoms become severe and skilled and individual interventions are needed for pain and symptom management. Continuous care is the costliest care for payors and has the lowest profit margin for providers.

   9. Respite care is for caregiver relief. It allows patients to stay in hospice facilities for brief periods to provide breaks for their caregivers. Respite care is typically a minor percentage of overall patient days.

   10. Medicare reimburses the different levels of care at different rates. The highest level of reimbursement is for continuous care. Medicare covers payment for approximately 85% to 90% of hospice care.

   11. The goal of hospice is to provide physical, emotional, psychological, and spiritual comfort and support to a terminally ill patient and the patient's family. Hospice care focuses on palliative care and comfort measures. Hospices provide services according to a plan of care developed by an interdisciplinary

       
       

       group of physicians consisting of nurses, social workers, and various counselors, including chaplains.

   12. Individual hospice patients sometimes benefit from services that are not covered by Medicare and/or private or commercial insurance. These services may include music therapy, pet therapy, art therapy, massage therapy, and aromatherapy. There are also more complicated and expensive non-covered services such as palliative chemotherapy and radiation that may be helpful for severe pain control and symptom control.

   13. Community provides, and both VITAS and United propose to provide, all of the core hospice services and many of the other services mentioned above to patients.

3. Fixed Need Pool

   
   

   1. AHCA'S hospice rule includes a numeric need formula for determining the need for an additional hospice program in a Service Area. See, Fla. Admin. Code R. 59C-1.0355(4)(a).

   2. The Agency's formula uses an average three-year historical death rate. It applies this average to an area's forecasted population for a two-year planning horizon to project the number of deaths in the area. Then the formula uses a statewide hospice use penetration rate. This is the number of hospice admissions divided by current total deaths. The statewide average penetration rate is subdivided into four categories: cancer over age 65, cancer under age 65, non-cancer

      
      

      over age 65, and non-cancer under age 65. By applying the penetration rates to the projected numbers of death in each category in an area, the rule formula projects hospice admissions (based on death rate and projected population growth) in each category. The most recent published actual admissions are subtracted from the projections to determine the number of projected un-met admissions in each category. If the total un- met admissions in all categories exceed 350, a new hospice is "needed," unless there is a recently approved hospice in the service area or a new hospice provider has not been operational for two years.

   3. In this case, application of the numeric need rule projected a "need" for one additional hospice in Area 4A.

   4. Subtracting the most recently reported published hospice admissions in Area 4A from the projected number of likely hospice admissions calculated by applying the penetration rates to the projected deaths in Area 4A indicated that there would be 925 more projected admissions than there had been for the period for which the admissions were published. The hospice service use rate in Area 4A has consistently been below the statewide average use rate for the past ten years.

4. Area 4A

   
   

   1. Area 4A consists of five counties. The central and most heavily populated county is Duval. It includes the urban

      
      

      center of Jacksonville and its population of approximately 860,000 people. Clay and St. Johns County each have approximately 186,000 residents. Nassau County is north of Duval. Part of Nassau County is considered part of the Jacksonville metropolitan area. There are resort and retirement communities along the east coast of Nassau County. The western part of Nassau County is less densely populated and rural.

   2. The fifth county, Baker County, is west of Duval County. It is the only state-designated rural area in Area 4A. Baker County's small population is largely concentrated in the southeast quadrant of the county. A large part of the county is part of the Okefenokee Wildlife Refuge. Baker County has the lowest hospice admission rate of any county in Area 4A. None of the existing providers have an office in Baker County.

   3. Approximately 72% of Area 4A's population is Caucasian. Approximately 22% of the area's population is African-American.

   4. Community has served Area 4A for approximately 30 years. It accounts for approximately 90% of all hospice admissions in the area. In the most recent year for which figures are published, Community had 5,216 admissions.

   5. Haven Hospice began operating in Area 4A in 2001. It has an approximately 8% market share and 481 admissions annually.

      
      

   6. Heartland Hospice opened in 2007. In the most recent

      
      

      12 month period for which there are published figures, Heartland served 108 patients.

5. The Proposals

   
   

   1. VITAS and United propose to provide hospice patients in Area 4A with all of the core services and many of the other services mentioned above. The proposals are similar in many respects. Both will provide quality services and propose financially feasible programs. Either applicant could serve Area 4A well if approved. Either applicant would serve the "need" projected by AHCA.

   2. Both applicants emphasize what they describe as "underserved" African-American populations and rural populations. Each applicant maintains that its plan for serving these populations is a primary reason to approve its application. "Underserved" is not an accurate description. There is no persuasive evidence that African-American or rural patients in Area 4A who desire hospice services do not have timely access to them. The populations each use hospice services at a lesser rate than Caucasian or urban and suburban populations. But nothing indicates that this is because the services are not available.

   3. African-American utilization of hospice services in Area 4A is lower than utilization by the Caucasian population.

      
      

      This is not unique to Area 4A. Lower hospice utilization by African-Americans is common throughout the nation. Nothing indicates that the lower hospice utilization by African- Americans in Area 4A is not normal. To the contrary, the credible evidence establishes that this is the normal state of affairs.

   4. Each applicant also identifies a need to serve more non-cancer patients and serve more patients in need of continuous care. There is no persuasive evidence that non- cancer patients or patients needing continuous care in Area 4A who desire hospice services do not have timely access to hospice services.

   5. United also maintained that homeless persons with terminal illnesses were individuals who needed more hospice services. There is no persuasive evidence that homeless individuals in Area 4A who desire hospice services do not have timely access to them.

   6. Each applicant advances secondary arguments about features of its operations that make it superior to the other. Each applicant acknowledges, as the evidence established, the quality of the other applicant. The applicants make limited criticisms of the reasonableness of each other's proposals. The distinctions between the applicants' proposals are relatively fine and are discussed later.

      
      

      1. The VITAS Proposal

         
         

   7. VITAS proposes to establish a main office in Duval County with satellite offices in Baker and Nassau counties. It will open the Baker County office the first year of operation.

   8. VITAS projects equipment costs of $170,000 and start- up costs of $83,500. The projections are reasonable.

   9. VITAS projects 162 admissions in Year 1 and 297 admissions in Year 2. The projections are conservative and reasonable, especially in light of the market dominance of Community. VITAS' own start-up experience in Brevard, Collier, Volusia, and Flagler counties also supports the reasonableness of the utilization projections.

   10. VITAS is able to recruit staff. Its proposed staffing levels and salaries are reasonable. Factors considered in assessing reasonableness include ratios of census to discipline and the number of core employees that will be needed.

   11. The proposal of VITAS budgets sufficient funding for physician services and contracted services.

   12. VITAS's total projected costs for the proposal are

       
       

       $338,353. This projection is reasonable.

       
       

   13. VITAS's proposal satisfies both the Local Health Planning Council's general preferences and its hospice specific preferences.

       
       

   14. VITAS complied with all applicable AHCA rules and preferences.

   15. VITAS has well-developed and effective information technology systems that help it deliver hospice services efficiently over large geographic areas. It will use these systems in its proposed Area 4A hospice.

   16. VITAS made a number of enforceable commitments in the proposed conditions for the Area 4A hospice. VITAS commits to the following:

       -Minimum of 3% total patient days to persons in need of continuous care

       -Minimum of 65% patients with non- cancer diagnoses

       -Exceed statutory pain control outcome measures

       -Death attendance of at least 90% of deaths

       -Patient-family satisfaction score of 90% or greater

       -Discipline specific satisfaction of 90% or greater

       -Provide pet therapy

       -Establish satellite offices in Baker and Nassau Counties

       -Implement TeleCare Program with 24/7 nurse availability

       -Establish Local Ethics Committee

       -Implement CarePlanIT a handheld bedside clinical information system

       -Provide palliative radiation, chemotherapy, and transfusions where appropriate

       -Provide hospice services 24/7 as indicated by patient’s medical condition

       -Patient assessment by physician upon admission

       
       

       -Medical Directors must be board certified in Hospice or Palliative Care medicine within 5 years of employment

       -RNs encouraged to become certified in Hospice and Palliative Care nursing; with 50% of all supervisory nurses attaining such certification by second year of operation

       -Chaplains will be Masters of Divinity, from accredited CPE program

       -Social workers will be Master’s level or Licensed Clinical Social Workers

       -Designate hospice representative to provide community outreach, promote hospice awareness, and enhance access to African- American individuals in Service Area 4A

       -A Physician will serve as member of every care team

       -VITAS will provide bereavement services beyond the normal one year after death of patient, if needed

       -VITAS will not solicit or accept donations from hospice patients, their families, or the general community

       -Immediately establish a Clinical Pastoral Education program

       
       

       In addition, VHC (the parent of VITAS) will provide:

       
       

       -A charitable contribution of $300,000 to Florida State College of Jacksonville to fund an Endowed Teaching Chair, Scholarships and the Northeast Florida Initiative for Nursing Workforce Diversity;

       -A charitable contribution of up to

       $500,000 to the United Way of Northeast Florida, during the first three years of licensure;

       -A charitable contribution of $50,000 to the Jacksonville Urban League to expand health and quality-of-life initiatives in the greater Jacksonville area.

       
       

   17. Florida State College of Jacksonville is the second largest state college in Florida. It has a full array of health programs from entry level to bachelor’s degree. The college

       
       

       produces more nursing graduates than all other colleges and universities in the region combined. The fundraising arm of Florida State College is the Florida State College Foundation. Its sole purpose is supporting the college by raising money to support academic programs and help develop facilities.

   18. One component of the VITAS/Florida State College Foundation Hospice Care Partnership Proposal is linked to factors that affect African-American utilization of hospice care. That is the $130,000 contribution to support Florida State College's operation of a Northeast Florida Initiate for Nursing Workforce Diversity.

   19. The initiative strives to increase the number of registered nurses from disadvantaged or under represented backgrounds and ensure all citizens have access to culturally, ethically and linguistically appropriate health services. This addresses two factors identified as contributing to lower utilization of hospice services by African-Americans.

   20. The remaining components of the $300,000 VITAS proposal are not directly related to factors affecting African- American hospice utilization.

   21. VITAS's proposed measure of fulfillment of this commitment is only a signed statement by VITAS and evidence of funds transferred.

       
       

   22. VITAS proposes a donation of $500,000 to the United Way of Northeast Florida. United Way’s mission is to identify critical issues in the community, perform a needs assessment, and then raise the dollars to address those issues. The organization serves Duval, Clay, Nassau, Baker, and northern St. Johns Counties. The United Way partners with two area hospitals, Baptist Medical Center and Shands of Jacksonville. Shands has a contract with the City of Jacksonville to provide care for indigent and low income persons. It is the largest provider of health services to the indigent in the area.

   23. The United Way will use VITAS's donation to expand its elder care advocacy program and to develop better support for caregivers. Through the United Way’s partnership with Shands, donations by VITAS will reach the community’s homeless population. VITAS’ funding would also support United Way’s

       ―Life: Act 2.‖ This is a seniors initiative focused on assisting working caregivers, predominantly minority families with low and moderate incomes, to access information and support services, including end of life services.

   24. The mission of the Jacksonville Urban League is to assist African-Americans and others achieve social and economic equality. It serves Duval, Nassau, Baker, and Clay Counties, as well as a portion of South Georgia. VITAS commits to a $50,000 grant to the Jacksonville Urban League if approved. The grant

       
       

       addresses the fact that African-Americans utilize hospice services at a lower rate than Caucasians.

   25. The Jacksonville Urban League committed to spend

       
       

       $15,000 of the $50,000 grant on expanding community health and end-of-life awareness initiatives offered under the League's African-American Health Network. It also committed that $3,500 would provide educational components about end-of-life care and advance directives as part of quarterly Health and Quality of Life seminars and workshops.

   26. The remaining $31,500 is earmarked as follows:

       
       

       $10,000 -- four quarterly community education workshops conducted by a nutritionist focusing on healthy cooking and healthy eating; $12,000 -- sponsorship of the Jacksonville Urban League Centennial Celebration Walk-A-Thon community fund-raiser;

       $5,000 -- promotion for an employee/community walking program with a goal of each participant walking at least 100 miles during the year as part of the Urban League Centennial Celebration; and $4,500 -- individual incentives for people who sign up for various programs and meet specific goals.

   27. VITAS proposes only a signed statement by a VITAS representative and evidence of payment to the Jacksonville Urban League as measurement of fulfillment of the condition.

   28. VITAS has been actively involved in the Foundation for Hospices in Sub-Saharan Africa (FHSSA) since 1998. The FHSSA is

       
       

       a national initiative of the National Hospice and Palliate Care Organizations (NHPCO). VITAS is its leading participant, providing both monetary and clinical support over the years.

       Robin Fiorelli, Senior Director of Bereavement Volunteers for VHC, sits on the FHSSA Board. VITAS participates in FHSSA because that is part of its philanthropic mission.

       1. The United Proposal

       
       

   29. Like VITAS, United relied in its application upon AHCA's projected need for a hospice in Area 4A. United's letter of intent and its application did not propose approval of two programs, one based on the need projection and one based upon special or "not normal" circumstances. United advanced that proposal for the first time in this proceeding.

   30. United proposes to establish a main office in Jacksonville and satellite offices in rural Baker and Nassau Counties.

   31. United projects admissions of 222 in its first year of operations and 702 in its second year of operations. United's projected increase in second year admissions relies upon its plan to develop home health services in the area if it obtains the certificate of need. United plans to bring its allied services and programs to the area if approved. But none are presently provided in the area.

       
       

   32. United's second year projections are aggressive but not unreasonable in light of AHCA's projected 925 additional hospice admissions. In any event, United can be reasonably expected to achieve or exceed the same utilization as that projected by VITAS.

   33. United projects equipment costs of $170,000, project development costs of $84,853, and start up costs of $83,500. These are reasonable projections. United's total projected costs of $338,353 are reasonable.

   34. United's proposal will be financially feasible. It will be financially feasible even with lower utilization than projected. This is because the costs of operation are primarily staffing, which is a variable expense directly related to utilization.

   35. The ―break even‖ point for United is 360 admissions.

       
       

       Thus, even if admissions were reduced dramatically from United’s Year 2 projections, the United proposal remains financially feasible.

   36. UHS Pruitt will fund the proposed United project.

       
       

       United, with the support of UHS Pruitt, has the financial resources to fund, accomplish, and operate its proposed hospice program at the cost stated in its CON Application.

   37. UHS Pruitt has well-developed recruitment, training and education programs. It operates the Pruitt Online

       
       

       University, with numerous education modules available for each specific discipline in a patient care team. Additionally, United’s parent organization operates a state-of-the-art training and education center at its corporate headquarters in Norcross, Georgia, where it routinely conducts orientation and continuing education classes. The facility is equipped with video conferencing capabilities, multiple classrooms and lecture halls.

   38. United will use these resources to establish and operate its proposed hospice program. United will be able to appropriately staff and operate its proposed hospice program.

   39. Like VITAS, United is an established provider of high- quality hospice services. United also conditions its CON on becoming accredited by the Community Healthcare Accreditation Program (CHAP), an outside accreditation body. This will help United ensure that it provides high quality care.

   40. United commits to several conditions upon its CON. They are:

       -UHS Pruitt will make all of the services that it provides available to any hospice provider that wishes to contract for the services. This includes services from United Home Care, United Medical, United Pharmacy Services, and United Clinical Services.

       -A staff member will be responsible for outreach initiatives to the African-American community.

       
       

       -Form an African-American Community planning and outreach team

       -United will host listening sessions with African-American leaders, African- American clergy and other members of the African-American community

       -Based on the listening sessions United will develop message, presentation, and marketing materials addressed to the

       African-American community

       -Continually assess existing tools and obtain or develop new resources to provide culturally meaningful and appropriate educational opportunities for the African- American community

       -Provide ongoing comprehensive training for staff and volunteers involved in the outreach program

       -Develop and maintain a calendar of events that address, support, and celebrate African-American issues, heritage, and healthcare concerns. Staff members will attend the events

       -Develop a tool to track referrals generated by the outreach program to measure its effectiveness.

       -Report admissions annually by race to

       AHCA

       -Continue active membership in the

       Emergency Services and Homeless Coalition (ESHC) of Jacksonville, Inc., a non-for- profit alliance of organizations dealing with homeless issues.

       -Provide hospice services to the homeless in shelters and help with placement

       -Provide health screening by a registered nurse once a month at a local social service organization chosen in collaboration with the ESHC

       -Open a centrally located Baker County office immediately upon licensure

       -Open a centrally located Nassau County office by the end of the second year of operation

       -Join the St. Johns Rural Health Network

       
       

       -Provide a minimum of 2.5 % of patient days in continuous care by the end of year two

       -Obtain CHAP accreditation

       -Join Florida Hospice and Palliative Care, Jacksonville Regional Chamber of Commerce, St. Johns County Chamber of Commerce, Clay County Chamber of Commerce, and Baker County Chamber of Commerce

       -Make the four annual $2,000 scholarships offered by United Hospice Foundation available to Florida residents.

       -Meet or exceed all NHPCO Guidelines for qualifications and staffing ratios of patient care staff

       -Implement rapid pain management protocols to ensure 75% of patients who report severe pain will report a reduction to 5 or less by the end of the second day of care.

       
       

6. Statutory and Rule Review Criteria

1. Rule Preferences

   
   

   1. AHCA is required to give preference to an applicant meeting one or more of the criteria specified in Florida Administrative Code Rule 59C-1.0355(4)(e)1-5.

      Commitment to serve populations with unmet need

      
      

   2. Both applicants propose to serve populations that they maintain have an unmet need for hospice services. Those populations are African-Americans, rural residents, and the homeless. The evidence does not establish an unmet need for hospice services for these populations in the sense of people desiring hospice services not being able to obtain them. The

      
      

      evidence establishes that these populations use hospice services at a lower rate than other populations.

   3. What the applicants really propose is outreach and marketing of various sorts to increase utilization by these groups. AHCA's apparent health policy and planning goal is to increase utilization by these groups.

   4. VITAS and United proposed offices in rural areas.

      
      

      Their plans to increase utilization by rural residents are comparable. One is not better than the other.

   5. Both proposals include efforts to improve utilization by the homeless. Neither is superior to the other.

   6. Similarly both applicants make plausible and equivalent proposals to increase hospice utilization by non- cancer patients and people needing continuous care (3% for VITAS and 2.5% for United). Neither is superior to the other.

   7. Both applicants commit to outreach to the African- American population. Both have a history of serving African- Americans and plans to reach out to the African-American Community. VITAS also has a history of working with the community to increase awareness of end of life options. Finally, VITAS has a more concrete and expansive plan to increase African-American utilization.

   8. VITAS's commitments to make donations to the Jacksonville Urban League, the United Way, and Florida State

      
      

      College are specifically linked to activities that designed to increase awareness of hospice services and improve comfort with the idea of hospice in the African-American Community. This specificity and VITAS's history of engagement in the issue of hospice services for African-Americans make its proposal the better one for increasing African-American utilization of hospice services.

      Commitment to provide in-patient care through contracts with existing health care facilities

   9. VITAS and United intend to use scatter beds to provide in-patient care. Both intend to contract with existing health care providers.

      Commitment to serve patients who do not have primary caregivers

      
      

      at home; the homeless; and patients with AIDS

      
      

   10. The applicants make equivalent commitments to serve these patients.

       Commitment to provide services not covered by insurance, Medicare or Medicaid

   11. VITAS and United each have a history of providing services not covered by insurance, Medicare, or Medicaid. Both propose to do so in their applications. There proposals on this subject are equivalent.

       
       

2. Consistency with plans; letters of support

   
   

   1. Both applicants provided letters of support demonstrating their outreach to the community and sufficient support within the community. Neither is superior in this factor. Similarly, both applicants demonstrated that their proposals are consistent with the needs of the community and other criteria contained in local and state health plans.

3. Required Program Description

   
   

   1. VITAS and United provide detailed program descriptions in their CON applications. Both establish reasonable staffing, referral sources, projected admissions, volunteer recruitment, community education, and bereavement services. Although there are differences between the proposals, there is no significant distinction between the two in the quality or feasibility of the proposed programs.

4. Section 408.035(1)(a), Florida statutes -- The need for the

   
   

   health care facilities and health services being provided

   
   

   1. AHCA projected a need for one new hospice program in Area 4A. There are no special circumstances in Area 4A that would justify adding a new program in the absence of a calculated need.

      
      

5. Section 408.035(1)(b), Florida Statutes -- availability, quality of care, accessibility, and extent of utilization

   1. Existing providers offer quality and accessible hospice care to the residents of Area 4A. Each applicant can serve the need projected by AHCA. VITAS and United each would provide quality care to the area. It is unlikely, given the utilization rate in Area 4A and the market dominance of Community, that all of the hospice admissions projected will go to the new provider. However, each applicant is capable of satisfying the projected need.

6. Section 408.035(1)(c), Florida Statutes -- ability to provide quality of care and record of providing quality of care

   1. VITAS uses over 40 Quality Assurance Performance Improvement measures and reports from them that help it provide high quality care. VITAS has and uses guidelines for intensive palliative care for both internal and external use. The guidelines outline how to approach and manage symptoms pharmacologically and non-pharmacologically. VITAS's medical director will be a direct employee of VITAS.

   2. In March of 2010, AHCA cited VITAS's Palm Beach hospice for deficiencies related to, but not causing or hastening, a patient's death. This was an isolated error. Because of a time lag in updating the patient records, the patient was discharged when she should not have been. AHCA made

      
      

      a finding of immediate jeopardy. VITAS responded promptly and correctly with a plan of correction that AHCA accepted. Since then the Palm Beach VITAS program has passed its bi-annual licensure survey. AHCA has also accepted other corrective action plans for unrelated VITAS deficiencies. Given the size of VITAS's operations, the number of people it serves, and VITAS's prompt attention to the deficiency, this incident does not indicate material problems with VITAS's quality of care.

   3. United has extensive internal quality assurance and performance improvement programs. United Clinical Services provides consulting services to all of United's hospices from an interdisciplinary care team. United also conducts surveys and audits of United's hospice program. That is one way United ensures quality care for its patients. United also conditioned its Certificate of Need on becoming accredited by the Community Healthcare Accreditation Program. This is an outside accreditation body. United will employ Medical Director services by engaging a physician under contract.

   4. Both applicants have a history of providing quality hospice services. Each demonstrated the ability to provide high quality care. VITAS and United each employ qualified people and provide them all needed training. Both applicants proposed appropriate staffing for their programs and good quality control

      
      

      and review practices. Neither applicant's proposed quality of care is superior to the others. They are equivalent.

7. Section 408.035(1)(d), Florida Statutes -- availability of resources, including health personnel, management personnel, and funds for project accomplishment and operation

   1. United has adequate financial resources to establish and operate its proposed hospice program. Its parent company is committed to providing the full amount of project costs and is able to fulfill that commitment.

   2. VITAS also has adequate financial resources to establish and operate its proposed hospice program. Its parent company is committed to funding the community contributions that VITAS includes in its proffered conditions.

   3. Both applicants have the necessary personnell resources available to start and operate their programs.

8. Section 408.035(1)(e), Florida Statutes -- extent to which

   
   

   proposed services will enhance access to health care for residents of the service district

   1. None of the existing providers have an office in Baker County. VITAS and United propose to establish an office in Baker County. This will improve the availability of hospice services to rural residents. Between the two applicants, neither proposal to increase availability to rural residents is superior to the other.

      
      

   2. The applicants and AHCA agree that increasing the low African-American utilization rate is an important goal. There is no persuasive evidence, however, that the lower rate is due to a lack of access to hospice services. The low rate results from a combination of historical distrust of the medical system; reliance upon family, church, and community during a patient's final days on earth; and difficulties with access to health care in general. Both applicants commit to reach out to African- Americans and work with leaders in the community to increase utilization of hospice served. Their commitments include making outreach a primary responsibility of a designated employee.

   3. VITAS, through its parent company, has a substantial record of working closely with and supporting the African- American community. Diane Deese, Director of Community Affairs for VHC, works with all minority communities. She works predominately with African-American and Hispanic organizations. Ms. Deese works with the boards and executive leadership of groups and organizations such as the National Medical Association, the largest African-American physician organization in the U.S.; the National Federation of Licensed Practical Nurses; Rainbow/PUSH; the Samuel DeWitt Proctor Conference; and the Full Gospel Baptist Church Fellowship International. The New Orleans Chapter of the National Black Nurses Association asked VHC to help in providing education and support for its

      
      

      nurses, although VITAS has no licensed program in the area. VITAS helped. Since 2003, VITAS has been the only hospice provider actively involved with the National Medical Association.

   4. On behalf of VITAS, Ms. Deese works closely with the president of the National Black Nurses Association, as well as with the organization’s Daytona Beach Chapter. Both wrote letters of support for the VITAS proposal. The National Black Nurses Association has a chapter in Jacksonville.

   5. For many years VITAS has supported informing African- Americans about hospice care through its engagement with The Duke Institute on Care at the End of Life, a program of the Duke Divinity School. The program was established with a founding gift from Hugh Westbrook (VITAS founder), VHC, and the End of Life Foundation. Crossing Over Jordan is one of the educational programs of the Duke Institute. The Institute created the program to focus on the role of African-American churches in supporting terminally ill members of their congregations.

   6. The Full Gospel Baptist Church Fellowship International is a group of predominantly African-American clergy who have worked with the Crossing Over Jordan conferences to educate communities, particularly African-American communities, about hospice and end-of-life care. The Full Gospel Baptist Church Fellowship International has several

      
      

      ministries in Jacksonville, Florida. It has worked with VITAS to educate African-American church congregations about the benefits of hospice and to encourage members to volunteer.

   7. The Samuel DeWitt Proctor Conference is a group of African-American pastors. The group leads a number of large and influential churches around the country that have entered into a partnership with the Duke Institute on Care at the End of Life to help it spread the word about the need for African-Americans to know more about hospice and palliative care options for end- of-life care.

   8. United has a record of providing hospice services to African-Americans. Overall in 2009, United provided 26% of its hospice patient days to African-Americans in 2009. In communities with large African-American populations similar to Duval, United provided in excess of 46% of its patient days to African-Americans.

   9. In 16 of its 25 hospice programs, 26% or more of United’s hospice admissions were persons of African-American descent. In five of United's hospice programs, African- Americans accounted for more than 40% of admissions.

   10. United is committed to increasing access to hospice services for African-Americans. Claudia Warren-Wheat is a Clinical Social Worker with United Clinical. She assists the United Hospice programs in the social work and community

       
       

       outreach functions. Ms. Warren Wheat coauthored an article published in the Journal of the National Association of Social Workers examining barriers to access for hospice use by African- Americans entitled "Hospice Access and Use by African-Americans: Addressing Cultural and Institutional Barriers through Participatory Action Research" (Nov. 1999). This Article includes recommendations for dismantling barriers to access to hospice care for African-Americans.

   11. United's plan to increase African-American utilization of hospice services includes developing a census tracking tool to routinely track referrals generated by the outreach program to measure its success.

9. Section 408.035(1)(f), Florida Statutes -- immediate and

   
   

   long-term financial feasibility

   
   

   1. VITAS’s operating cash flow will fund the proposed project cost of $338,000. It is more than adequate to cover the VITAS's project costs. VITAS is an existing hospice provider in Florida and in sound financial condition. VITAS's parent, VHC, will fund the project's charitable contribution commitments.

      The VITAS proposal is financially feasible in the short-term and long-term.

   2. The VITAS pro forma was derived from the same financial model it has used successfully for years. The assumptions used by VITAS for revenues and expenses are

      
      

      reasonable and achievable. Its existing operations in Florida provide sufficient net income and cash flow to ensure the project’s financial success. VITAS’ projected utilization is conservative and is both reasonable and achievable.

   3. United has a successful history of establishing new hospice programs. It too has the resources to establish and operate the proposed program. If United does not achieve its projected utilization and linked revenue in the second year of operation, that will not impair its financial feasibility. United can adjust staffing as needed. And United is likely to achieve the utilization needed to "break even. The United project is financially feasible in the short and long term.

10. Section 408.035(1)(g), Florida Statutes -- extent to which

    
    

    proposal will foster competition that promotes quality and cost- effectiveness

    1. Both applicants are capable, established hospice service providers with the backing of experience and committed parent companies. Either applicant will foster competition with the existing providers in all arenas including quality and cost effectiveness.

11. Section 408.035(1)(h), Florida Statutes -- costs and methods of construction, etc.

    1. Neither applicant proposes construction as part of its proposal.

       
       

12. Section 408.035(1)(i), Florida Statutes -- the applicant's past and proposed provision of health care services to Medicaid

patients and the medically indigent

1. The applicants present comparable records of providing services to Medicaid and medically indigent patients.

   VI. Ultimate Findings of Fact

   
   

2. Both applicants would provide quality care to their patients. Neither is demonstrably superior to the other.

3. Both applicants will improve access of rural and homeless residents of Area 4A. Neither is demonstrably likely to improve access more than the other.

4. Both applicants propose financially feasible projects.

5. There are no "not normal" or "special" circumstances related to the need for hospice services in Area 4A.

6. Both applicants are committed to and capable of providing care to non-cancer patients. Neither has a demonstrably superior plan for doing this.

7. Both applicants are committed to and capable of providing continuous care to those who need it. Neither has a demonstrably superior plan for doing this.

8. VITAS's plans for increasing utilization by African- Americans, in light of its conditions, are more likely than those of United to improve African-American utilization.

   
   

   CONCLUSIONS OF LAW

   
   

   Jurisdiction

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. §§ 120.569, 120.57(1), and 408.039(5), Fla. Stat. (2009).1

   Burden of Proof

   
   

10. As applicants, VITAS and United bear the burden of proving, by the preponderance of the evidence, entitlement to a CON. Boca Raton Artificial Kidney Ctr., Inc. v. Dep't of HRS, 475 So. 2d 260 (Fla. 1st DCA 1985); § 120.57(1)(j), Fla. Stat.

11. The award of a CON to an applicant must be based on a balanced consideration of all applicable and statutory rule criteria. Balsam v. Dep't of HRS, 486 So. 2d 1341 (Fla. 1st DCA 1986). "[T]he appropriate weight to be given to each individual criterion is not fixed, but rather must vary on a case-by-case basis, depending upon the facts of each case." Collier Med. Ctr., Inc. v. Dep't of HRS, 462 So. 2d 83, 84 (Fla. 1st DCA 1985).

12. An administrative hearing involving disputed issues of material fact is a de novo proceeding in which the administrative law judge independently evaluates the evidence presented. Fla. Dep't of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778, 787 (Fla. 1st DCA 1981); § 120.57(1), Fla. Stat. AHCA's

    
    

    preliminary decisions on CON applications, including its findings in the SAAR, are not entitled to a presumption of correctness. Id.

13. Pursuant to AHCA's hospice rule need methodology, the Agency determined that there is a need for one new hospice program in Service Area 4A for the applicable planning horizon. The existence of numeric need creates a rebuttable presumption of need for an additional hospice program in the service area. VITAS Healthcare Corp. of Cent. Fla., Inc. v. Ag. for Heatlh

    Care Admin., Case No. 04-3858CON, 2005 Fla. Div. Admin. Hear. LEXIS 881, *61-62 (DOAH June 14, 2005; AHCA July 7, 2005)

    (citation omitted). The parties agree that there is a need for one new hospice program.

    Approval of Two Programs

    
    

14. Florida Administrative Code Rule 59C-1.010(3)(b) provides that once the Agency deems an application complete "no further application information or amendment will be accepted by the agency." VITAS entered evidence questioning whether United could achieve its projected utilization for the second year of operation. VITAS then attempted, unpersuasively, to prove that without the projected utilization United's hospice would not be financially feasible. In response United presented persuasive evidence that it would "break even" at a lower utilization of

    360 admissions.

    
    

15. VITAS and AHCA argue that the "break even" analysis provided by United in response to their criticisms amounts to an impermissible application amendment. They cite Manor Care, Inc. v. Department of Health and Rehabilitative Services, 558 So. 2d

    26 (Fla. 1st DCA 1989) in support of their argument. The "break even" analysis does not amount to an impermissible amendment precluded by the holding in Manor Care.

16. United did not change its utilization projections or assumptions. It only responded to an argument by establishing that even if the project does not achieve its aggressive utilization projections, it remains financially feasible. This is not comparable to Manor Care, Inc. v. Department of Health and Rehabilitative Services where the applicant changed its design from three beds per room to two, increased the square footage, and altered its Medicaid commitment.

17. In this proceeding United raised a new theory for approval of two applications. It argues that the lower utilization rates for specific populations and overall justify approving two programs under the special circumstances provisions of rule 59C-1.0355(4)(d). United's theory is that one program should be approved to fill the projected need. A second should be approved simply because either (1) African Americans and rural residents have low utilization rates or (2) the projected number of new admissions is so large.

    
    

18. This change is so material that it amounts to an impermissible amendment under Manor Care, Inc. v. Department of

    Health and Rehabilitative Services. The theory requires a different analysis of all the information provided in the applications, an analysis that neither the applicants nor the Agency conducted during the initial review. The applications only provided information about how to best fill the projected need for one program. The applications contain no information or analysis about what the effect of approving two new programs would be on existing providers. The applications contain no information about what utilization each program could expect if two programs are approved or what the effect of that utilization would be on the existing provider and the other applicant. In short the new theory materially changes the United proposal.

19. If the new theory could be considered, AHCA and VITAS maintain that when the rule projects a numeric need, approving two programs is not permitted. They argue that the special circumstances portion of the rule applies only when the rule does not project a numeric need. VITAS and AHCA rely upon Hospice of Naples, Inc. v. AHCA, et al.,Case No. 07-1264CON (Fla. DOAH March 3, 2008; Fla. AHCA, April 2, 2008). In that Final Order AHCA concluded that its Rule 59C-1.0355 allowed approval of only one hospice program in any one batching cycle

    
    

    even when special circumstances that might otherwise support the approval of more than one hospice program exist.

20. AHCA's position on this issue is ambivalent. In 2004 the Agency issued a Final Order in VITAS Healthcare Corporation of Central Florida, Inc. v Agency for Health Care Administration and Hospice of the Palm Coast, Inc., Case No. 04-1272CON, AHCA Fla. AHCA FRAES No. 2004003159 (Fla. AHCA Oct. 7, 2004), approving and adopting a settlement agreement that provided for simultaneously issuing two hospice CONs in Service Area 4B. The agreement recites that the circumstances are specific and unique and establish that the new hospices will not injure an existing provider. This Final Order pre-dates the Final Order in Hospice of Naples, Inc. But Jeff Gregg, Chief of the Bureau of Health Facility Regulation for the Agency, testifying in this proceeding as the Agency's representative stated that in rare or unusual circumstances the Agency's rule permits approval of two hospice CONs even when AHCA's need formula rule projects a numeric need for one.

21. An Agency has authority to interpret the statutes over which it has substantive jurisdiction and its own rules. L.B. Bryan & Co. v. School Bd., 746 So. 2d 1194 (Fla. 1st DCA 1999). The Agency’s interpretation is due deference. See Fla. Wildlife Fed'n v. Collier Cnty., 819 So. 2d 200 (Fla. 1st DCA 2002); D.A.B. Constructors, Inc. v. State, Dep't of Transp., 656

    
    

    So. 2d 940 (Fla. 1st DCA 1995); Fla. Hosp. Ass'n., Inc. v. Health Care Cost Containment Bd., 593 So. 2d 1137 (Fla. 1st DCA 1992). The Agency’s interpretation does not have to be the only or the best interpretation.

22. Consequently, despite the Agency's ambivalence, its Final Order in Hospice of Naples, Inc. is the most recent official statement of the Agency's interpretation of its rule. In a batch where the rule projects numeric need, two hospice programs cannot be approved, one on the basis of projected need and one on a special circumstances theory. See also VITAS Healthcare Corp. of Fla. v. Agency for Health Care Admin., et al., Case No. 04-3856CON (Fla. DOAH Oct. 18, 2006), rejected in part, Case No. AHCA-06-0433-FOF CON (Fla. AHCA Dec. 13, 2006).

23. If two applications could be approved, the facts do not support a conclusion that there are special circumstances justifying approval of a second program here. The rule lists three specific conditions that establish special circumstances. They are that a specific population is not being served, that a county is not being served, or that person referred to hospice programs are not being admitted within 48 hours. Approval of a CON on the basis of special circumstances requires one of these three conditions. Odyssey Healthcare of Collier County, Inc. v. HHP South, Inc., and Agency for Health Care Admin., Case No. 10- 1605 (Fla. DOAH Nov. 30, 2010; Fla. AHCA Feb. 2, 2011). United

    
    

    maintains that the utilization rates for African Americans, rural residents, patients needing continuous care, and non- cancer patients establish that there are terminally ill patient population not being served.

24. There was no persuasive evidence that any members of those population groups sought or even desired hospice services but could not obtain them. For African-Americans, the facts show that lower utilization than average is the normal condition. Also, there is no persuasive evidence that two new programs are any more likely to increase the utilization by any population than one new program combined with the existing providers.

    Consideration of the Statutory and Rule Criteria

    
    

25. Both applicants are well-qualified to meet the projected need for an additional hospice program in Area 4A. But the regulatory scheme created by the Florida Legislature and implemented by AHCA require choosing just one to fill the projected need. Based upon the totality of the circumstances, weighing and balancing all the criteria, and for all of the reasons stated in the Findings of Fact, on balance the advantage goes to VITAS over United because of its plans and commitments for increasing African-American utilization of hospice services.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law it is,

RECOMMENDED that the Agency for Health Care Administration issue a Final Order denying the application of United Hospice of Florida, Inc., and granting VITAS Healthcare Corporation of Florida, Inc., a Certificate of Need to establish a hospice program in AHCA Service Area 4A with the conditions stated in VITAS's Certificate of Need Application.

DONE AND ENTERED this 22nd day of March, 2011, in Tallahassee, Leon County, Florida.

S

John D. C. Newton, II Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 2011.

ENDNOTE

1 All references are to the 2009 edition of Florida statutes unless otherwise noted.

COPIES FURNISHED:

R. Terry Rigsby, Esquire Carlton Fields, P.A. Post Office Drawer 190

Tallahassee, Florida 32302

Lorraine M. Novak, Esquire

Agency for Health Care Administration Fort Knox Building III, Mail Stop 3 2727 Mahan Drive, Suite 3431

Tallahassee, Florida 32308

Robert D. Newell, Jr., Esquire Newell, Terry & Douglas, P.A. 817 North Gadsden Street Tallahassee, Florida 32303

Timothy Bruce Elliott, Esquire Smith & Associates

2873 Remington Green Circle Tallahassee, Florida 32308

Geoffrey D. Smith, Esquire Smith & Associates

2873 Remington Green Circle Tallahassee, Florida 32308

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Elizabeth Dudek, Secretary

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

Justin Senior, General Counsel

Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from 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 case.

Docket for Case No: 10-001865CON

Orders for Case No: 10-001865CON