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A PROFESSIONAL NURSE, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 87-000451 (1987)
Division of Administrative Hearings, Florida Number: 87-000451 Latest Update: Dec. 23, 1987

The Issue The issue is whether the application of A Professional Nurse, Inc., (APN) for Certificate of Need No. 4636 to operate a home health agency in HRS District IX should be granted. STIPULATION CONCERNING APPLICABLE STATUTES In the prehearing stipulation, the parties agreed that the issues to be litigated are only those relating to the need for an additional home health agency in the HRS service district. The other criteria found in Section 381.494(6)(c), Florida Statutes, which the Department is required to take into consideration in granting certificates of need, are not in dispute. The only portions of the statute and rules which must be examined here are Section 381.494(6)(c)1., 2. and 12, Florida Statutes, and Rule 10.5.011(1)(b)1., Florida Administrative Code.

Findings Of Fact APN's Applications This case arises from the application by APN for Certificate of Need No. 4636, filed in June, 1986. In 1983, APN had filed another application for a certificate of need when the Department had imposed an administrative moratorium on applications. HRS originally denied the application but during the pendency of formal proceedings, reconsidered and would have granted the application, but other parties intervened. APN failed to respond to certain discovery (it did not have an attorney) and at the final hearing therefore was not allowed to present evidence. As a result, APN's 1983 application was denied. With respect to the current application, based upon its June, 1986, filing, under Rule 10.5.008, Florida Administrative Code, a decision would have been due in October of 1986. On September 16, 1986, an employee of the Department requested an extension of time for the Department's decision until January, 1987, because the Department had no rule methodology for determining need for home health agencies, but hoped to have one by January, 1987. APN agreed to a three-week extension but did not agree to defer a decision until January, 1987. In November, 1986, the Department issued a state agency action report proposing to deny the application. At no time during the application process was APN told how need for an additional home health agency would be determined during departmental review in the absence of any need methodology adopted by departmental rule. There were no other applications in HRS District IX filed in the same batch as this application, and there have been no petitions to intervene in this proceeding. APN And Its Related Companies APN is an existing, licensed home health agency which has operated in District IX for nine years. It has applied for a certificate of need in order to qualify as a Medicare and Medicaid provider. Without the certificate of need, it cannot receive Medicare or Medicaid reimbursement for its services. Due to the recent opening of psychiatric hospitals in District IX and the need for follow-up care after such hospitalization, there is a need in District IX for psychiatric home health services. APN has particular expertise in psychiatric nursing. The requirements APN met for licensure are nearly identical to those for certification. There is no capital expenditure necessary for the Medicare and Medicaid certification. APN also started a related company, Professional Staffing Services, which provides nurses for hospitals, nursing homes and other home health agencies. These clients have called upon Professional Staffing Services when they are short of staff. APN currently receives referrals of persons who need home health services which come from hospitals, social service departments, hospital discharge planners. It also has a plan with hospitals for providing indigent care called "Patient Care Partnership Plan" under which it provides two hours of indigent care for each 40 hours of private duty care obtained through a hospital. There are people who could benefit from home health services who are unaware that they qualify to be reimbursed by Medicare for home health services. There are even some physicians who are not familiar with the availability of home health services. Because of the relatively low level of public awareness of the availability of home health services, patients are sometimes placed in nursing homes rather than deceiving health services at home, which would be less expensive and more cost-effective than nursing home care. Method For Determining Need For Home Health Services in District IX Because there is no rule methodology for determining the need for home health services, the method for determining need used by the Department is subject to de novo review in this proceeding. Section 120.57(1), Florida Statutes (1985). The Department presented no evidence of the number of home health agencies it believes are needed in District IX. In the absence of a rule it has no way of quantifying need. The Department has had difficulty in developing a methodology for determining need for home health agencies. Its first rule promulgated in 1977 was known as the Rule of Three Hundred. That rule is determined to be invalid. See Johnson and Johnson Home Health v. Department of Health and Rehabilitative Services, Final Order, DOAH Case 83-2170R, affirmed 447 So.2d 361 (Fla. 1st DCA 1984). Thereafter, the Department used a nonrule policy requiring an applicant to prove that people were not being served in order to justify a certificate of need for a new home health agency. That policy was applied by the Department at the time of the hearing in Upjohn v. Department of Health and Rehabilitative Services, 496 So.2d 147 (Fla. 1st DCA 1986) and was criticized by the court. The Department's current policy of requiring applicants to show that people are not being served is unreasonable. Existing home health agencies have the ability to expand their staff as demand increases. This would preclude the entry of any new competitor into the market if the rule for determining need for additional agencies is that there must be current potential users who are unserved. The Department's assertion that additional need can be shown by surveys of doctors or hospital discharge planners which indicate an inability to obtain home health services places an unreasonable, unattainable burden on an applicant. The expert retained by the Department to help it develop a rule methodology attempted to survey discharge planners and received only a 25 percent response rate, which is unreliable. The Department's assertion that the applicant could show a waiting list as an indication of need is also unreasonable. Those in need of home health services who cannot obtain them do not wait, they obtain alternate services, by such means as entering a nursing home. Finally, to the extent that patients or even physicians are unaware of the availability of home health services, it is not possible to structure any survey to quantify that pool of unmet need. APN's Need Methodology The testimony of the health planning expert presented by APN, Eugene Nelson, was generally persuasive. He advocated an assessment of need based upon a use rate formula. Nelson found that the patients used home health services at varying rates throughout the state, with greater use in the southeast, less use in the mid-portion of the state, and lower use in north Florida. He therefore suggested the use of different use rates in north, central and south Florida. District IX is in the southern area. The data on the use of home health services by patients is not reported to the Department or to local health councils, and is therefore not readily available. It can be obtained, however, from Medicare financial intermediaries based on reimbursement reports those intermediaries process on behalf of the federal government. Only the Department can obtain this data. Intermediaries will not supply it to CON applicants on request. The most recent data which is complete is 1984 data. When this use rate is applied to the population over age 65, one can derive the expected number of Medicare home health visits for 1987. An HRS service district is the appropriate planning unit. By multiplying the use rate in south Florida times the District IX population over 65 (2.4446 x 268,056) the total expected visits for 1987 are 655,290. Even using the lower, and therefore more conservative, statewide average use rate yields 508,154 visits (1.8957 x 268,056). Nelson then converted the number of visits to a reasonable number of agencies based upon the number of visits each agency ought to be able to perform. There is little economy of scale in home health agencies and it is therefore difficult to determine an optimum agency size. Nelson discussed data showing reasonable agency size ranges from 9,000 to 15,000 visits per year. This range of agency size is accepted as reasonable. Using 15,000 visits as the appropriate agency size (which is conservative), there would be a need for 44 agencies in District IX if the south Florida use rate is applied, and 34 agencies needed if the statewide use rate is applied to the appropriate population. There are currently 25 existing home health agencies which have certificates of need in District IX. This methodology shows a net need for between nine and 19 new home health agencies. APN's use rate formula for determining the number of home health agencies is consistent with the goals and priorities found in the State Health Plan and the Local Health Plan. In this case, one of the significant objectives of the State Health Plan is Objective 1.5 which is To assure that the number of home health agencies in each service area promote the greatest extent of competition consistent with reasonable economies of scale by 1987. RECOMMENDED ACTION: 1.5a: Develop a need methodology based on historic cost data for Florida Home Health Agencies. Because it currently has no rule methodology for determining need for home health agencies, the Department has contracted with Dr. Elton Scott to draft a formula for determining need. The preliminary report of Dr. Scott recommends a methodology based on the historical Medicare use rate and is generally similar to one presented by APN. Until it adopts a new methodology by rule, the current policy of the Department is to request extensions of time for CON review from applicants rather than process the applications. This results in a de facto moratorium. No applications have been approved under the current policy of requiring the applicant to prove unmet need. In the record of this case the Department has failed to present any qualified health care expert to give any opinion about appropriate health care planning for home health agencies or to justify its current policy of requiring applicants to present evidence of need on an anecdotal basis. The policy is unreasonable for reasons stated in Finding of Fact 15.

Florida Laws (1) 120.57
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CITRUS MEMORIAL HOSPITAL, BOARD OF TRUSTEES vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 88-000386 (1988)
Division of Administrative Hearings, Florida Number: 88-000386 Latest Update: Jun. 29, 1989

The Issue The issues concern the question of the entitlement of Petitioner to the grant of a certificate of need (CON) to provide home health services in District III.

Findings Of Fact On December 15, 1986, Petitioner made application for a certificate of need (CON) to provide home health services in Citrus County, Florida. That application was denied by Respondent on December 14, 1987. The basis for denial as set out in Respondent's State Agency Action Report (SAAR) was to the effect that there was no demonstrated need when resort was made to the methodology suggested by the North Central Florida Health Planning Council in its 1986 District III Health Plan. (At that time Respondent did not have a methodology for determining need). It was felt that some advantage might be gained in serving the needs of underserved groups; however, there was limited information to demonstrate that existing home health agencies in the county could not meet the demands for service. Finally, it was stated that the referral agreement between Petitioner, as a source of clients from its hospital operation, and Intervenor as an existing home health care provider, to include use of Petitioner's employees in the provision of care, care which was as "hi-tech", as Petitioner could provide, was sufficient. Following the application denial, Petitioner filed a timely request for formal hearing under the authority set forth in Section 120.57(1), Florida Statutes. On February 17, 1988, Intervenor was allowed to intervene. Given that the Respondent did not have a rule methodology in place to consider this application when first filed or at the point in time where the case was referred to the Division of Administrative Hearings for consideration, on May 12, 1988, Respondent moved, unopposed, to have the case returned to the agency to await the promulgation of a new home health rule. The motion was granted. On September 12, 1988, the new rule became effective as Rule 10- 5.011(1)(d), Florida Administrative Code. Which provided as follows: (d) Medicare Certified Home Health Agencies. Definitions. Home Health Agency. A home health agency is defined as a Medicare certified home health agency in accordance with subsection 381.702(10), F.S. Home Health Services. Home Health Services are defined in accordance with subsection 400.462(3), F.S. Home Health Services Provider. For the purpose of this rule, a home health services provider is defined as the person or corporate entity to which the certificate of need or license is issued. District. District means a service district of the department as established in subsection 20.19(5), F.S. Service Area. A certificate of need for the establishment of a home health agency shall authorize a home health services provider to locate a home health agency and serve persons anywhere within the district for which the certificate of need is awarded. Planning Horizon. The planning horizon is the anticipated time frame within which the agency is expected to be licensed. The planning horizon for applications submitted between January 1 and June 30 of each year, shall be July of the following year; the planning horizon for applications submitted between July 1 and December 31 of each year shall be January of the year following the year subsequent to the application deadline. Approved Home Health Agency. For the purpose of this rule, an approved home health agency is defined as a new agency within the district which holds a valid certificate of need and has not been licensed by the department one moth prior to the publication date of the semi-annual fixed need pool. Persons or corporations who do not operate Medicare certified home health agency in the district and are the holder of one or more certificate of need approvals within the same district, shall only be counted as one approval. Persons or corporations who do operate a Medicare certified home health agency in the district and are also the holder of a certificate of need approval for the same district, shall not be counted in the inventory of approved agencies. Quality of Care. Home health agencies regulated under this rule shall meet the minimum of care standards contained in HRS rules 10D-68, F.A.C. Need Methodology. The establishment of a home health agency by a provider who does not currently operate a Medicare certified home health agency in a district, shall require a certificate of need for the operation of a Medicare certified home health agency in the district. Applications for home health agencies shall be reviewed against all applicable statutory and related rule criteria. Applications for home health agencies shall not normally be approved unless a need is indicated in accordance with the formula under paragraph 3. The establishment of additional Medicare certified home health agencies, additional offices, mail drops, or any other physical presence by a Medicare certified home health services provider within the same district is not subject to a certificate of need. The need for the establishment of a new home health agency within the HRS district shall be determined twice a year. The net need for new Medicare home health agencies in each HRS district is calculated as follows: HHNN = ((PHHV - AHHV)/CEAS) - AHH Where: HHNN equals the Medicare certified home health agency net need. PHHV equals the projected number of home health agency visits for the respective district and planning horizon. The projected number of home health agency visits is calculated by multiplying the number of home health visits per 1000 population 65 years and over provided by the Medicare certified agencies in the district for the most recent year for which data available, by the projected population 65 years and over for the respective district. The population projections shall be based on the population projects issued by the Executive Office of the Governor available to the department 1 month prior to the publication date of the semi- annual fixed pool. AHHV equals the actual number of home health agency visits provided by all Medicare certified home health agencies in the district based on cost report data obtained from Medicare Intermediaries for the most recent year available to the department 1 month prior to the publication date of the semi-annual fixed need pool as specified in Rule 10-5.008(2), F.A.C. CEAS is the cost efficient agency size in numbers of visits at which economy of scale is achieved according to the data available to the department. If the fraction (PHHV - AHHV)/CEAS is .5 or exceeds .5, the fraction shall be rounded upward to the nearest whole number. CEAS shall be updated by the department annually and shall be determined by the department according to the following methodology: Rank all agencies by visit size, excluding hospital-based agencies. calculate the average cost for all visits for each remaining agency. Calculate the mean visit cost for all agencies, excluding hospital-based agencies, and two standard deviations from the mean for the remaining agencies. Eliminate agencies with average visit costs at or exceeding two standard deviations above and below the mean visit cost from further calculations. Array remaining agencies by visit size from low to high, and sort agencies into 4 groupings by visit size containing an equal or similar number of agencies, and calculate the mean cost for each groupings. Calculate the percentage reduction, if any, in mean visit cost for each grouping as compared to the previous grouping. Identify the agency size groupings which have a mean visit cost reduction of 5 percent or more compared to the mean visit cost of the previous groupings. Select the agency size grouping for which the last 5 percent or more reduction in mean visit cost is achieved prior to a grouping for which a less than 5 percent reduction is achieved as compared to the previous grouping and determine the median agency size for this grouping rounded to the nearest thousand. This agency size is defined as CEAS. AHH equals the number of approved home health agencies in the district. Preference shall be given to applicants proposing to provide home health care services to indigent persons and Medicaid patients. Preference shall be given to applicants proposing a comprehensive range of home health services if it is determined by the department that certain types of services are unavailable or that there is a shortage of certain types of home health service. Preference shall be given to applicants proposing to provide home health services and establish a physical presence underserved areas of the district. Data Reporting Requirements. Home health agencies regulated under this rule shall provide the following information to the department or its designee. The information shall be provided for the same reporting period covered by the annual cost reports submitted to the Medicare Intermediaries, and shall be submitted to the department or its designee at the same time the annual cost report is submitted to the Medicare Intermediary. The total number of patients served less than 65 years of age and 65 years of age and over by county of residence. The total number of visits provided by type of service. The total number of patients served by payment source including Medicaid, Medicare, and uncompensated care. As can be seen, this rule considers the need question district-wide as opposed to a county-by-county analysis in effect at the time of application by Petitioner. District III, which contains Citrus County, has fifteen other counties. The rule in its text is not found to be applicable per se to this application, although its underlying concepts arguably have an influence on the case outcome. While the Petitioner and Respondent urge that the rule does-have retroactive effect and the Intervenor disagrees, all parties acknowledge the logistical awkwardness of trying to employ the rule's terms in a literal sense. In fact, the rule cannot be used as it is written, for reasons to be explained and in any event neither of the proponents have exercised its terms in exact detail. When Respondent reviewed the application using a modified version of the new rule in the interest of what Respondent believed to be an equitable treatment of pending home health applicants who had waited for the rule to be enacted, it changed its position from one of recommended denial to recommended grant of the CON. The case was returned to the Division of Administrative Hearings and upon motion by the Intervenor, as granted, the Petitioner updated its application on December 5, 1988. This lead to the hearing on the dates previously described The updated information was provided to the other parties in this case. It was not given to the local health council for further review by that organization. Petitioner is a public not-for-profit healthcare organization created by state law. The hospital is governed by a Board of Trustees appointed by the Governor of the State of Florida. The proposed home health agency would be owned and operated by Petitioner. It treats indigent and Medicaid patients and other medically underserved groups. The hospital's mission is to serve the residents of the community regardless of their ability to pay. This approach would be continued in home health care. Petitioner provides high quality patient care and this could be expected to continue if a CON for home health care was granted. The quality assurance plan and mechanisms in place at Petitioner's hospital would be used in its home health agency to help assure high quality patient care. Petitioner would also develop a utilization review plan similar to what is in effect at the hospital that would help insure proper utilization of the home health agency. Petitioner is JCAH accredited and licensed by the State of Florida, and is currently in compliance with all State of Florida licensure requirements. Petitioner's home health agency would be a hospital-based home health agency, as opposed to a free-standing home health agency. There are benefits to being a hospital-based home health agency. The home health agency employees have the advantage of being part of the hospital's employment benefit package; the home health agency has the ability to tap into the expertise of the hospital in such areas as accounting, data processing, and so forth; discharge planning is easy to coordinate; and, the home health agency has the potential ability to use trained hospital personnel who have high tech skills and expertise and can provide services to the home health agency in their area of expertise. However, the suggestion that employees would be involved in both roles of hospital care and home health care is suspect in that certain employees such as nursing staff are not expected to fulfil that dual role and other employees such as the dietician were unable to consistently aid the patient in the home and carry out the duties in the hospital under an arrangement by which the Intervenor per agreement with the Petitioner sought to have continuation of services from the hospital to the home. If this could not be done, given the demands on the dietician in the hospital duties at that time, then there is no reason to believe that it would be any easier to achieve if the hospital had a home health agency. None of the aforementioned benefits are significant improvements over existing conditions in Citrus County where home health care is provided by freestanding agencies. More specifically, Petitioner currently has physical therapists, respiratory therapists, dietitians, and social workers on its full-time paid staff that could conceivably be available to the home health agency. Since these persons are already full-time salaried employees of the hospital, it would not cost the home health agency any additional amount for these skilled persons to provide services to home health care patients, assuming the ability to meet the needs of hospital patients and home health care patients, again a real uncertainty. Petitioner's personnel would be available to assist in the development of policy and procedure manuals, quality assurance plan and utilization review plan for the home health agency. There are other possible economies in service that could be derived from Petitioner's operation of a hospital-based home health agency. These include: the hospital-based agency is easily accessible to physicians; discharge planning is facilitated due to the close cooperation of nursing, social worker, and home care provider while the patient is still in the hospital; services will be available 24-hours a day through the use of hospital switchboard and communications systems; and use of current medical records systems will mean a patient's entire medical history will be available to practitioners. Again, these arrangements do not afford a significant improvement over existing home health services. Petitioner has sufficient resources available to initiate and operate a hospital-based home health agency. Necessary staff can be employed to the extent they are not already working at the hospital. Petitioner is in sound financial condition. Petitioner would be able to hire a qualified administrator. Petitioner's projected payor mix of 88% Medicare, 3% Medicaid, 4% insurance and 5% indigent, is an admirable goal. However, there is some question about whether the projections of Medicare and indigent care levels of service will be achieved. Petitioner as a referral source from its hospital operations had not achieved those projected levels of referrals in the past. This is important because Petitioner expects to obtain its home health patients from the hospital referrals. Consequently to promote the grant of the CON premised solely upon the belief that underserved groups will be better off would not be warranted. The possibility exists that with greater awareness more underserved persons might be referred for home health care but nothing in this case points to any increased effort to publicize the availability of home health for the underserved to justify the optimistic levels the applicant predicts. In a home health agency, all of the patient services are provided in the patient home. Thus, the only space requirement is for office space for the administrative staff and working space for the employees to do their necessary paperwork. Petitioner Memorial Hospital has about 1,600 square feet of vacant space available in which to house the home health agency offices. This building is currently owned by Petitioner. There is no debt associated with this building, and the building has been fully depreciated. Contrary to the statement in its application, Petitioner has decided not to offer prescription delivery services. This is not a significant change. Intervenor is a licensed home health agency in Citrus County. It first became licensed by the State of Florida in February, 1986. Intervenor has been surveyed annually by Respondent since 1986. In each of these surveys, it received no deficiencies. Intervenor is a full-service home health agency. It offers a range of "hi-tech" home health services, including: skilled nursing services; physical therapy; occupational therapy; speech therapy; social services; home health aide services; dietary guidance; medical supplies; home IV therapy; parenteral nutrition; interostomal therapy; home phlebotomy and lab testing services; and respiratory care. It has offered these services since its inception. Intervenor provides some homemaker services during home health aide visits, such as cleaning, straightening, and laundry. Intervenor's personnel include registered nurses, certified home health aides, physician therapists, licensed physical therapist assistants, speech therapists, occupational therapists, a medical social worker who holds a masters in social work, interstomal therapists, nutritionists, and respiratory therapists. Intervenor offers quality of care and ensures continuity of care in the delivery of home health services. Petitioner has never complained that a patient could not be discharged quickly enough due to Intervenor's shortcomings in taking on home health services for the discharged patient. Intervenor makes every effort to coordinate its operations with Petitioner to ensure quality and continuity of care related to patients referred by the hospital. The service area of Intervenor is Citrus County. Until late 1988, about 70% of Intervenor's referrals came directly from Petitioner. On average, Intervenor provides about 28.6 home health visits per patient. Intervenor provides home health services to all patients regardless of ability to pay. Intervenor provides home health services to the following payor classes: Medicare, Medicaid, VA, workmen's compensation, private insurance, and indigent. Its CON contemplates 2% Medicaid and 3% indigent patients. Since opening in 1989, Intervenor has treated 985 patients. Of these 985 patients, only ten (10) have been indigent and fifteen (15) have been Medicaid patients. This works out to one percent (1%) indigent care and one and one half percent (1.5%) Medicaid care. Community Care publishes a brochure that advertises its services to the community. Nowhere in this brochure does it indicate that Community Care serves indigent patients. The brochure stresses that services will be provided through reimbursed coverage, either Medicare, insurance, or other reimbursement sources. On the other hand it does not require any deposit or up-front payment from new home health patients and has never refused a patient due to an inability to pay. As stated until recently a very substantial portion of the Intervenor's referrals came from Petitioner and levels of service to the underserved, that is, Medicaid and indigent, have been low. This ties back to the observation that the 3% Medicaid and 5% indigent projection of service made by Petitioner may not be any easier to achieve and probably less so than the 2% Medicaid and 3% indigent which Intervenor is committed to. This is supported by the fact that on the first 11 months in 1988, Petitioner referred less than 2% Medicaid and 1% indigent. Moreover, the District III average for existing agencies of services to these underserved groups is .8% Medicaid and 1.3% indigent. As alluded to before, in December, 1985, Petitioner and Intervenor entered into an agreement. Per that agreement, Petitioner would refer all home health patients to Intervenor unless a patient or physician specifically requested otherwise. The agreement provided that Petitioner would provide certain services and personnel to Intervenor in exchange for compensation. It was a two-year agreement with an automatic one-year renewal. Petitioner chose to extend the contract for three years through the latter part of 1988. Since late 1988, Petitioner rotates its hospital referrals in the instance where the patient, patient's family or physician did not specify which home health agency was preferred. This means that as many as seven agencies could be involved in the rotation if Petitioner gained a CON, with Petitioner having no greater share than the rest. At present, there are four providers, two in the rotation are from the ABC home health group, the Intervenor and Upjohn another home health provider. Petitioner would make five. To make seven, VNA and Gulf Coast Home Health Services who have come into Citrus County would be added. VNA is another provider with a history of service to underserved patients. In this connection, Petitioner argues that its equal treatment of existing providers and itself, if granted a CON, minimizes the adverse impact of another competitor arriving on the scene and allows existing providers who are for profit agencies to remain financially viable. This together with trends toward early release in DRG for the hospital inpatient sector; provision of home health care through the Catastrophic Healthcare Act, and the general trend in increased home health visits in Citrus County make it possible for both the existing providers and the Petitioner to survive in the market place, if you accept the point of view of those who favor the grant of a CON to Petitioner. In fact, the DRG situation and the Catastrophic Healthcare Act, as events, are too speculative to say what their influence will be in promoting greater use of home health services. Otherwise, the trend toward increased visits that have been pointed out are now being met with an increased number of providers to deliver those visits. This dilutes market share. The Petitioner's rotation system further dilutes market share, especially as to the Intervenor. Thus, the question is raised on the matter of whether the historical trend toward increased visits is enough to sustain the existing providers with the advent of the Petitioner's presence and choice to rotate referrals. On the whole, the Petitioner's influence on competition is not positive and is not acceptable. The Petitioner's projections concerning its own market acceptance are unrealistic and unacceptable. The projections in the original application and in the December 5, 1988 update to that application as to skilled visits per patient far exceed the experience in the service area, Citrus County. The applicant speaks in terms of 53 visits when the historical experience in the county is approximately 30. Nothing in the record of the hearing tends to support the idea that Petitioner can deliver such an excessive increase in visits. Additionally, estimates of total home health visits in the first two years of operation are generally out of line. The estimate by Petitioner ranges as high as 42,000, plus visits. Some of the items in that count are not comparable to referrals made out of the hospital at present. Examples of this incomparability are homemaker services, DME and the category listed as general items. Again, prescription service is no longer proposed thereby reducing the numbers. Nonetheless, the estimate is still excessive. This is made the more apparent when taking in account that by annualizing available data 464 patients were referred by Petitioner in 1988. In examining what had been referred out in 1988 in number of patients, the number of visits on average by history and the idea of rotation of referrals, Petitioner cannot achieve the performance level it predicts. Moreover, projections for population in 1990 and 1991, the furtherest years out given by Petitioner in support of its application, don't change this impression because the increases in population will not justify the Petitioner's projections on market share as a function of number of visits. The estimates of visits at 1990 and 1991 based upon 50% retention of referrals projected from Petitioner's hospital for home health services is unrealistic in that retention could be as low as 15% to 20%. Therefore, visits would be much less than 5,693 and 7,950 in 1990 and 1991, respectively. (See Petitioner's Exhibit 22.) The failing in the estimate of performance level means that the revenue projections are inaccurate. Although Petitioner is a not for profit institution, its proposed home health operation is not seen to be financially feasible in the short term or long view. The fact that approximately 80% of costs in a home health operation are variable and that home health delivery is cost-based reimbursed does not relieve the Petitioner from giving a more realistic estimate of those costs, its performance and net financial position. The effect of this failing leaves the record unclear and the trier of fact unconvinced concerning the true facts about this project's financial feasibility. The pro formas as written do not identify employee benefits ranging in costs from 25% to 30%. Transportation costs are not reflected. If other facts were favorable to Petitioner, there would be very little additional costs associated with the start-up of its operation. Only minor "sprucing up" would be necessary before occupying existing space. Excess office furniture is currently available at the hospital. The addition of Petitioner as a provider of home health services will not significantly advance variety or quality of care sufficient to justify the issuance of a CON. At present, existing providers offer a wide variety of home health services and provide quality care. The fact that the Petitioner is a hospital based not for profit institution, does not alter these findings. The addition of Petitioner promotes no positive influence in competition in the market place. The risk is presented that overall cost in the health care system can be increased if the Petitioner is added and the market place becomes overburdened. Based upon past experience, the Intervenor needs to achieve around 8,700 visits a year to be financially viable, and to break even. Petitioner's proposal together with other competitors in the market, some recently arrived, Upjohn, VNA and Gulf Coast Home Health Services jeopardize the ability to remain financially viable. Nothing can be done about the other competitors, but the issue of Petitioner's presence can be dealt with and should be rejected as an outcome. At a minimum the addition of Petitioner does not foster cost containment in that it could cause the existing providers to up requests for reimbursement nearer the caps in the Medicare segment at public expense. While there is a need for homemaker services in Citrus County, that fact doesn't justify the grant of a CON to Petitioner because it is willing to provide them. In home health care delivery there is credible evidence that initial economies of scale occur between 6,000 to 9,000 visits per annum. There is a serious question about the Petitioner's ability to achieve that level of performance under the facts found previously. When initially reviewing the compliance of the application with the 1986 District III Health Plan, in addition to problems of compliance with the need methodology in that plan, Petitioner did not respond to the need for home health services in Hamilton County and expansion of the range of services in Columbia and Suwannee Counties. These counties are within District III. These latter items concerning the other counties do not hinder the Petitioner's attempt to gain a CON because at present the decision to grant or deny a CON is on a district-wide and not county-by-county basis. Therefore, in theory, the Petitioner could serve Hamilton, Columbia and Suwannee Counties. Admittedly, that is unlikely given the proximity of these counties to Citrus County. More importantly, there has been no showing that some other applicant entitled to comparative review with the Petitioner sought to serve the other three counties putting into effect the local planning guidelines on priorities for grant of a CON. Likewise the local planning council methodology is of no moment. It deals with a county-wide analysis, not a district-wide analysis of need. The district-wide concept applies in this case per the change in the method of assessment that was fostered by the agreement to wait for the Respondent to enact a rule methodology and with that delay the tacit acceptance of the idea that approved and licensed home health providers could expand their services throughout the district. By contrast the fact that the local council reported that 148% of need was being met in Citrus County is telling and works against Petitioner. Finally, the support of the application by the local council as advisor to the Respondent is noteworthy but cannot overturn the adverse facts in this hearing which cause the application to be rejected. Petitioner is basically in compliance with the Florida State Health Plan in effect at the time of application except for the question of whether the Petitioner can achieve the aforementioned economies of scale at 6,000 to 9,000 visits per annum and the possible adverse influence on existing providers in maintaining economies of scale. Rule 10-5.0111(1)(d), Florida Administrative Code, supra, is the product of a considerable effort by Respondent to establish a balanced method of measuring the need for additional home health care providers in the various districts throughout the state. Unfortunately, it has limited utility in trying to resolve this controversy. The proponents of the use of the rule point out that nothing in the rule states that it cannot be applied retroactively to the case facts. Intervenor reminds us that nothing says it can be applied in that way. As hinted before, the rule cannot be seen to apply retroactively as it is written to render a defensible projection of need at the theoretical planning horizon of January, 1988. First, the service area in December, 1986 through January, 1988 was in reality Citrus County, not the district. There is no way to postulate who might have taken advantage of the opportunity to serve the overall district and come into Citrus County from outlying counties within the district because that was not allowed as a matter of right back then as it is now in the terms of the rule. The present situation has shown that there is such interest in coming into Citrus County with the addition of Upjohn, VNA and Gulf Coast Home Health Services. Next, the idea of who would have been shown as approved as a home health agency taking into account the January, 1988 planning horizon cannot reasonably be ascertained. The annual fixed need pool publication did not occur such that one could see who had been approved, or held a CON, one month prior to that publication to serve the district. Although one could argue that the identification of the pool can be hypothetically set for the fall of 1986, problems with identifying the 1985 data to establish that pool based upon information that was available to the Respondent at the time to announce the pool or availability of a complete data set about 1985 at the point of hearing persist. Associated with this dilemma is the influence agency expansions into other counties would have on calculation of CEAS. In the area of CEAS the exact nature of that situation cannot be ascertained. It cannot because one doesn't know which existing providers might have determined to go out of the counties in which they had offered their services and into other counties to open new units. This would have some influence on the average agency size within the district, which in turn causes a possible different answer in deriving the number of needed providers by the use of the formula. All this makes the exercise of accurately setting the pool unlikely and it wasn't done in this hearing. In using the district-wide service analysis back in time to fit the Petitioner's situation, an application by VNA in District III, Alachua County, pending and denied in December, 1987, the same month as Petitioner's denial, was not comparatively reviewed with the Petitioner as the law would theoretically require. VNA was subsequently approved and is functioning now. Consequently, comparative review is no longer possible. On the topic of the 1985 data, which is mandated in exercising the rule, what data in this category was available in the fall of 1986 is uncertain. The data about 1985 presently held by the Respondent is incomplete. This incompleteness is in AHAV where visits in all categories cannot be shown for 1985. This tends to understate what the formula derives as an answer. The derived answer for needed agencies is .7, rounded up per terms in the rule is one agency if the other factors that were described are ignored. They should not be. Especially, compelling is the existence of VNA, Alachua County which could use up the net need of one agency. Concerning the applicants who waited for the Respondent to enact a rule who applied for a CON in the period June, 1985 through December, 1987, the Respondent modified the use of the rule. In its thinking to make certain that no applicant along that time continuum was treated unfairly, Respondent picked 1986 data and a July, 1988 planning horizon in deciding the question of need. The result in the Petitioner's case was to use inappropriate data and an inappropriate planning horizon, according to the rule. This produced an answer of 1.1 agencies rounded down to 1. This is the same answer as before and no purpose is served in criticizing the Respondent's choice to deviate from the terms of the rule. On balance the concept of this rule as opposed to the ability to use the rule per se may look appealing as an abstraction, but it is unappealing as a means to resolve the factual dispute. It superimposes a system of district review at a time of county level service. For that reason, it cannot answer the riddle of how many providers would have exercised the right to serve Citrus County from other counties in the district as they have begun to do when the rule took effect in September, 1988. Using the rule retroactively anticipates a planning horizon which is already past. In recognition of this anomaly the parties have spoken to the future in their proof through the years 1990 and 1991. This has been necessitated by the agreement to wait for the Respondent to enact a new home health rule. That future is not conducive to the grant of the CON on the facts in this case which are more instructive about the true need in the district than the exercise of the formula in some past period. Had the Petitioner chosen to reapply and fallen under the clear terms of the rule, the result might be different. It did not, and it must accept the results of that choice.

Recommendation Based upon a consideration of facts found in the conclusions of law reached, it is, RECOMMENDED: That a final order be entered which denies the request for Certificate of Need as applied for by Petitioner. DONE AND ENTERED this 29th day of June, 1989, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Stephen K. Boone, Esquire Boone, Boone, Klingbell Boone & Roberts, P.A. 1001 Avenida Del Circo P. O. Box 1596 Venice, Florida 34284 Stephen M. Presnell, Esquire Macfarlane, Ferguson, Allison & Kelly Post Office Box 82 Tallahassee, Florida 32302 James C. Hauser, Esquire Joy Heath Thomas, Esquire Messer, Vickers, Caparello, French & Madsen, P.A. O. Box 1876 Tallahassee, Florida 32302 CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-0386 The following discussion is given concerning the proposed facts of the parties. Petitioner's Proposed Finding of Facts The first paragraph and the first sentence to the second paragraph are subordinate to facts found. The remaining sentences within paragraph 2 are not necessary to the resolution of dispute. Paragraph 3 is contrary to facts found. Paragraphs 4-7 are subordinate to facts found with exception the last sentence in paragraph 7 which is contrary to facts found. Paragraph 8 is subordinate to facts found. Paragraph 9 may express the statement of policy by the Respondent, but it is not an acceptable outcome in this instance. Paragraphs 10-12 are subordinate to facts found. Paragraph 13 is an accurate portrayal of the facts as far as its goes; however, it does not account for the problems of imposing the new home health rule over the time period associated with the filing date in this application. Paragraphs 14-16 are subordinate to facts found. Paragraph 17 is contrary to facts found. Paragraph 18 is subordinate to facts found. Paragraph 19 is not necessary to resolution of dispute. Paragraph 20 in all sentences except the latter is subordinate to facts found. The latter sentence is not necessary to the resolution of dispute. Paragraph 21 is subordinate to facts found. Paragraph 22 is contrary to facts found. Paragraph 23 is subordinate to facts found. Paragraph 24 is contrary to facts found. Paragraph 25 is true in that at the time the local health council examined the application there was an indicated need for home health for Medicare and indigent patients. That need is being met at present to the extent that those classes of patients have been made aware of the existence of the home health services. Paragraph 26 is subordinate to facts found. Paragraphs 27 and 28 are contrary to facts found. Suggestions in Paragraph 29 do not comport with the situation in Citrus County at present. Paragraph 30 is subordinate to facts found. Paragraph 31 is contrary to facts found. Paragraphs 32-36 are subordinate to facts found. Paragraphs 37 and 38 are not necessary to the resolution of dispute. Paragraphs 39-43 are subordinate to facts found. Paragraph 44 is not necessary to the resolution of dispute. Paragraphs 45-51 are subordinate to facts found. Paragraph 52 is not necessary to the resolution of dispute. Paragraph 53 is subordinate to facts found. Paragraphs 54-56 are contrary to facts found. Paragraph 57 is subordinate to facts found. As to Paragraph 58 it is uncertain whether the staff levels are adequate given the failure to accurately portray the volume of visits. In a related sense, Paragraph 59 as to salary level made to depicts the cost of those salaries, but it fails to include the benefits. Paragraph 60 is to general in its contention. It does not answer the failure to identify the more reasonable statement of staffing levels. Paragraph 61 is subordinate to facts found. The pro formas were not clear and the complementary proof offered at hearing did not confirm the assertion set out in paragraph 62. Paragraphs 63-65 are contrary to facts found. Paragraph 66 is subordinate to facts found. Paragraph 67 is contrary to facts found. Paragraph 68 is not necessary to the-resolution of dispute. Paragraph 69 depicts a situation that is to speculative to have relevance in this case. Paragraphs 70 and 71 are contrary to facts found. While the Paragraphs 72-74 accurately states the circumstance related to the intervenor in its initial involvement in the market. This situation has changed since that time and if Petitioner were to gain entry into the market the probability is that the intervenor's business would be seriously impacted. Paragraph 75 is contrary to facts found. Paragraphs 76 and 77 are subordinate to facts found. Paragraph 78 is not necessary to the resolution of dispute. Paragraphs 79-82 with exception of the last sentence in 82 are subordinate to facts found. The last sentence in paragraph 82 is not accepted. Paragraph 83 is subordinate to facts found. Paragraphs 84 and 85 are contrary to facts found. Paragraph 86 is true if one fails to take into account the advent of services by the intervenor and additional providers who has come into the market who are willing to undertake service to those patients. Paragraphs 87 and 88 are contrary to facts found. Paragraph 89 is subordinate to facts found. Paragraphs 90 and 91 are contrary to facts found. Paragraph 92 is subordinate to facts found. In Paragraph 93, while it is true that Petitioner has an excellent record of service to the Medicaid population in Citrus County, it is unclear why Medicaid patients are not receiving sufficient home health services, compared to what one would expect the demand to be. Respondent's Proposed Findings of Fact Paragraphs 1-3 are subordinate to facts found. Paragraphs 4-6 are contrary to facts found. Suggestion in Paragraph 7 is not a certainty and is not accepted in the fashion presented in these proposed facts. Paragraphs 8-10 are contrary to facts found. Paragraph 11 is subordinate to facts found. Paragraph 12 is contrary to facts found. Paragraphs 13 and 14 is subordinate to facts found. Paragraph 15 is a true statement if other factors which have been discussed in the recommended order are not taken into account. Paragraph 16 is subordinate to facts found. Paragraph 17-19 are not sufficiently relevant to this case to be reported as facts. Paragraph 20 is contrary to facts found. Paragraph 21 is subordinate to facts found. Paragraphs 22 and 23 may be basically an accurate statement of the Respondent's policies; however, this arrangement is not satisfactory on this occasion. Paragraph 24 is subordinate to facts found. Paragraph 25 is contrary to facts found. Paragraph 26 is subordinate to facts found. Paragraphs 27 and 28 are not necessary to the resolution of dispute. Paragraph 29 is subordinate to facts found. Paragraph 30 is true if the rule was found to be applicable. Paragraph 31 and 32 are not necessary to resolution of dispute. Paragraph 33 may be true in terms of the prospective use of the rule but is not influential in this case. Paragraph 34 is not necessary to the resolution of dispute. Paragraph 35 is speculative and has little relevance absent a showing that the expansion into the other areas within the district offset new providers coming into Citrus County, to include the Petitioner. Paragraphs 36 and 37 are subordinate to facts found. The suggestion in paragraph 38 is a statement of limited value in that there are no other competitors in District III from other batches. Paragraphs 39-43 are subordinate to facts found. The first sentence to paragraph 44 is subordinate to facts found. The remaining sentence is contrary to facts found. Paragraphs 45 and 46 are subordinate to facts found. Paragraph 47 is contrary to facts found. Paragraph 48 is accurate as for as it goes; however, it fails to take into account the fact that the Intervenor began to provide home health care to indigent and Medicaid patients. Paragraph 49 is contrary to facts found. Paragraph 50 is subordinate to facts found. Paragraph 51-53 are contrary to facts found. Paragraph 54 is subordinate to facts found. 35 The suggestion in the first sentence of paragraph 55 is true. Again it fails to take into account the change in circumstances with the advent of the Intervenor's services. The second sentence is subordinate to facts found. Paragraph 56 is not in meaningful contribution to the fact finding in the context of the overall facts reported in the recommended order. Paragraphs 57 and 58 are subordinate to facts found. Intervenor's Proposed Findings of Facts Paragraph 1 is subordinate to facts found. Paragraph 2 is not necessary to the resolution of the dispute. Paragraphs 3-5 are subordinate to facts found. Paragraph 6 is not necessary to the resolution of the dispute. Paragraph 7 is subordinate to facts found. Paragraph 8 is; not necessary to the resolution of the dispute. Paragraphs 9 through the first sentence in paragraph 16 are subordinate to facts found. The remaining sentences in paragraph 16 are not necessary to the resolution in dispute nor is the first and last sentences within paragraph 17. The other sentence within paragraph 17 is subordinate to facts found. The first sentence in paragraph 18 is subordinate to facts found. The remaining sentences are not necessary to the resolution of the dispute. Paragraphs 19 through the first sentence of paragraph 23 are subordinate to facts found. The second sentence in paragraph 23 is not necessary to the resolution of the dispute nor is paragraph 24. Paragraph 25 in all sentences save the last is subordinate to facts found. The last sentence is not necessary to resolution of dispute. Paragraph 26 through all sentences in paragraph 30 except the last sentence are subordinate to facts found. The last sentence is not necessary to the resolution of the dispute. The first sentence of paragraph 31 is subordinate to facts found. The remaining sentence is not necessary to the resolution of dispute. Paragraph 32 and the first sentence to paragraph 33 are subordinate to facts found. The remaining sentence in paragraph 33 is not necessary to the resolution of dispute. Paragraph 34 and the first sentence of paragraph 35 subordinate to facts found. The last sentence in paragraph 35 is not necessary to the resolution of the dispute. Paragraph 36 through the first sentence of paragraph 38 are subordinate to facts found. The remaining sentence in paragraph 38 is not necessary to the resolution of dispute. Paragraph 39 cannot be utilized in that the rule in question was not provided to the Hearing Officer under official recognition and is unavailable to confirm the assertion set out in that paragraph. Paragraphs 40 through 43 are subordinate to facts found. The suggestions in paragraphs 44 through 45 are contrary to the impression of the Hearing Officer. Paragraphs 46 through 48 are subordinate to facts found. Paragraphs 49 and 50 are not necessary to the resolution of dispute. Paragraphs 51 and 52 are subordinate to facts found. Paragraphs 53 through 55 as an approach to resolving factual disputes are rejected. Paragraph 56 is subordinate to facts found. Paragraph 57 is contrary to facts found. Paragraph 58 is not in keeping with the analysis of this case and the facts found in the recommended order nor is paragraph 59. Paragraphs 60 through 65 are subordinate to facts found. Paragraph 66 is not necessary to the resolution of dispute. Paragraph 67 and the first two sentences within paragraph 68 are subordinate to facts found. Remaining sentences within paragraph 68 are not in keeping with the analysis performed in the fact finding within the recommended order. Paragraph 69 is subordinate to facts found. Paragraph 70 is subordinate to facts found. Paragraph 71 is not necessary to the resolution of dispute. Paragraphs 72 through 76 are subordinate to facts found. Paragraph 77 is not necessary to the resolution of dispute. Paragraphs 78 and 79 are subordinate to facts found. Paragraph 80 is not necessary to the resolution of dispute. Paragraphs 81-86 are subordinate to facts found. Paragraph 87 is not necessary to the resolution of dispute. Paragraph 88 is subordinate to facts found. Paragraphs 89-91 are not necessary to the resolution of dispute. Paragraphs 92 through 94 are subordinate to facts found. Paragraph 95 is not necessary to the resolution of dispute. Paragraphs 96 through 101 in the first sentence to that paragraph are subordinate to facts found. The remaining sentences in paragraph 101 are not necessary to the resolution of dispute. Paragraph 102 is subordinate to facts found. Paragraph 103 is not necessary to the resolution of dispute. Paragraphs 104 and 105 are subordinate to facts found. Paragraph 106 is contrary to facts found. Paragraph 107 is not necessary to the resolution of dispute. Paragraphs 108 through 116 are subordinate to facts found. Paragraphs 117 and 118 are not necessary to the resolution of dispute. Paragraphs 119 through 122 are subordinate to facts found. Paragraph 123 is not necessary to the resolution of dispute. Paragraphs 124-126 are subordinate to facts found. Suggestion in paragraph 127 that the rotation system will not be employed is rejected. The remaining contents within that paragraph are subordinate to facts found. Paragraph 128 is not necessary to the resolution of dispute. Paragraphs 129 through 133 are subordinate to facts found. Paragraph 134 is contrary to the facts found. Paragraph 135 is contrary to the facts found. Paragraph 136 is not necessary to the resolution of dispute.

Florida Laws (3) 120.57,  20.19,  400.462
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HOME CARE ASSOCIATES OF NORTHWEST FLORIDA, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 88-004763F (1988)
Division of Administrative Hearings, Florida Number: 88-004763F Latest Update: Dec. 21, 1988

The Issue Pursuant to the Stipulation, the factual issues to be determined are: Whether DHRS' initial agency action in denying CON #4912 to Home Care was substantially justified; Whether special circumstances existed which would make an award of fees and costs unjust. Whether this action was initiated by a state agency within the meaning of Section 57.111(3)(b)3, Florida Statutes. The ultimate issue for determination is whether Petitioner is entitled to attorney's fees and costs under Section 57.111, Florida Statutes, the Florida Equal Access to Justice Act (FEAJA), for fees and costs incurred in DOAH Case No. 87-2150.

Findings Of Fact Pursuant to a Stipulation entered into by the parties, filed on November 10, 1988, the parties have admitted and/or stipulated that: DHRS' initial agency action was to deny CON #4911 to Home Care for the establishment of a Medicare home health agency to serve patients in Walton and Okaloosa Counties, Florida. After preliminarily denying Home Care's CON application, DHRS was required by statute or rule to provide Home Care with a clear point of entry to a formal administrative hearing pursuant to Section 120.57, Florida Statutes. Home Care's Petition for Attorney's Fees was timely filed after Respondent, DHRS, filed a Final Order in this case on July 26, 1988, sustaining Home Care's position that it should be awarded CON #4911. Home Care is a "small business party" within the meaning of Section 57.111(3)(d)1.b., Florida Statutes. Home Care is a "prevailing party" within the meaning of section 57.111(3)(c)1., Florida Statutes. Home Care incurred reasonable attorneys' fees and costs in Case No. 87- 2150, at least in the amount of $15,000. The following findings are based upon the record presented: Home Care filed its timely petition in this fee case after Respondent, Department of Health and Rehabilitative Services ("DHRS") entered a final Order on July 26, 1988, in Case No. 87-2150 granting Home Care a certificate of need ("CON") to operate a home health agency. DHRS' Final Order was a reversal of its original position on Home Care's application which was initially denied by DHRS. A formal administrative hearing was held before the undersigned on the issue of whether Home Care was entitled to a CON. The pleadings, transcripts, and exhibits in that proceeding, Case No. 87-2150, have been duly considered in regard to whether DHRS' actions were substantially justified in initially denying Home Care's application. The parties have stipulated that those documents shall constitute part of the record in this proceeding. The following findings are based upon the record in Case 87-2150 and the findings made in the Recommended Order entered in that case and adopted by the agency's final order. DHRS is the state agency responsible for administering the State Health Planning Act pursuant to Sections 381.701 through 381.715, Florida Statutes. (a) At the time DHRS denied this application, it did not have any published rule or policy on the methodology for determining need. Its original rule was successfully challenged and in 1984 DHRS attempted to promulgate a new rule. This proposed rule was invalidated in 1985 because it was based upon a use rate methodology and contained arbitrary criteria. Subsequently, DHRS published an interim policy which it used to assess home health care CON applications. The interim policy was applied to the first batch of applications in 1986 and used a rate population methodology which projected the number of Medicare enrollees using home health care services. The projected number of users was multiplied by the average number of visits per medicare home health care user. See Paragraph 15 of Recommended Order, Case No. 88-4763F. This interim policy was defended by DHRS in the First DCA in December 1986. In the summer of 1986, representatives of the Florida Association of Home Heath Agencies complained to the governor's office about the interim policy. After meetings between the staff of DHRS and the Governor's office, the Department abandoned the interim policy. No change occurred in the medical or financial factors which would warrant a change in policy. Additional applications had to be approved by Ms. Hardy's superiors. Home Care filed a Letter of Intent on October 8, 1986, and a CON application for a Medicare-certified home health agency in Okaloosa and Walton Counties on December 15, 1986. This was application CON Action No. 4911. DHRS published its notice of denial of CON Action No. 4911 in a letter to counsel for Home Care dated April 30, 1987. No specifics were given regarding the grounds for denial. Applicants at that time had been asked to give DHRS an unlimited extension of time within which to render a decision on their applications. Those who refused had their applications denied and were required, similar to Home Care, to demonstrate an unmet need based upon the broad statutory criteria found in Chapter 381, Florida Statutes. DHRS characterizes the procedure above as a free form action utilizing the statutory criteria found in Section 381.705, Florida Statutes. DHRS argued in Case No. 87-2150 that its incipient policy looks at the actual need by applying the 13 statutory criteria and bases its conclusion upon information collected from local home health service providers and the local health council. The denial of Home Care's application by DHRS does not state how DHRS applied the statutes to Home Care's application in order that Home Care or others could ascertain a developing standard. DHRS admitted that it did not have any rule upon which to adjudicate the application and DHRS did not present any credible evidence in support of its denial in Case No. 87-2150. DHRS did not adduce evidence supporting its denial because it was DHRS' policy to place the burden of proving both the facts and the methodology on the applicant. The deposition of Joseph Mitchell was introduced and made a part of this record. Mitchell's testimony is clear that, although there is a possibility Home Care could recoup some portion of the costs of litigation in medicare reimbursement as a cost of organizing and establishing the business, it is not certain that Home Care would be compensated because there is a cap on all reimbursable costs above which Medicare will not reimburse a provider and such legal expenses might not be allowed. See Deposition of Mitchell, page 76-78. Intervenors Choctaw Valley Home Health Agency and Northwest Florida Home Health Agency submitted a proposed order in this action seeking a dismissal of Home Care's petition for attorneys' fee and costs as to any relief from the Intervenors.

Florida Laws (3) 120.57,  120.68,  57.111
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AACTION HOME HEALTH CARE, INC. vs AGENCY FOR HEALTH CARE ADMINISTRATION, 96-004067CON (1996)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Aug. 28, 1996 Number: 96-004067CON Latest Update: Feb. 27, 1998

The Issue Whether the applications for certificates of need to establish Medicare-certified home health agencies filed by Aaction Home Health Care, Inc. (Aaction) and Nursing Unlimited 2000, Inc. (Nursing Unlimited), on balance, satisfy the applicable review criteria so as to entitle either or both to award of a certificate of need.

Findings Of Fact The Applicants Nursing Unlimited 2000, Inc., was formed for the purpose of obtaining a certificate of need for a Medicare certified home health agency, and to serve as the entity into which would be merged certain existing licensed non-Medicare certified home health agencies in Dade County. Aida Salazar-Rebull is a co- founder, director, officer, and shareholder of Nursing Unlimited, and she currently owns, operates, and serves as the administrator of LTC Professional Consultants, Inc. (LTC), a licensed non- Medicare certified home health agency in Dade County. Ms. Salazar will serve as Nursing Unlimited’s administrator, and after CON approval will merge LTC into Nursing Unlimited and continue its current operations. Elia Murias is also a co- founder, director, and shareholder of Nursing Unlimited, and she currently owns and operates Nursing Love & Care, a licensed non- Medicare certified home health agency in Dade County. Upon CON approval, Ms. Murias, a registered nurse, will serve as Nursing Unlimited’s director of nursing, and will merge the operations of Nursing Love & Care into Nursing Unlimited. For the past 12 years LTC has provided home health care services directly to Medicaid and private pay patients, and to Medicare patients through contracts with Medicare certified agencies. LTC is accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAHO), which accreditation will be transferred to Nursing Unlimited. Since its inception, the number of patients served by LTC has increased every year. LTC enjoys an excellent reputation among local health care providers and patients. LTC’s continual growth over the past ten years, coupled with the letters of support in the application, demonstrate a record of providing high quality care to underserved communities and population subgroups. LTC currently provides home health services in northwest, west central, central, and east central Dade County, and as Nursing Unlimited will serve the same geographic area. LTC places particular emphasis on its service to underserved population subgroups such as Hispanics, Haitians, Blacks, low-income clients, and HIV-positive patients. Nursing Unlimited will continue to serve those population subgroups. Although approximately 53 percent of the Dade County population is Latin, only two of the over 30 existing Medicare certified home health agencies are Latin owned and operated. LTC and Nursing Love & Care are Latin owned and operated, as would be Nursing Unlimited. The entire staff of LTC is bilingual, and some staff are multi-lingual, as would be the staff of Nursing Unlimited. Approval of Nursing Unlimited's application would enhance the availability and accessibility of services to the Latin community. Aaction Home Health Care, Inc. (Aaction), is an existing home health care agency providing services in Dade County since approximately 1988. Like Nursing Unlimited, Aaction's target population is the Hispanic community of Miami and Hialeah. The geographical area which Aaction now serves and will continue to serve at an enhanced level, if approved, is a low- income, high crime and low education area. Aaction's success in those difficult areas is based on its ability to recruit and retain indigenous staff who know the problems. Over 30 letters of recommendation and support, mostly from Hispanic physicians, are attached to Aactions's application and attest to the agency's past and anticipated future service in the community. Aaction has applied for JCAHO accreditation. Need Analysis The review of CON applications must be in context with the criteria set forth in Section 408.035(1), Florida Statutes. Pursuant to the parties’ prehearing stipulation, both applicants satisfy all of the applicable review criteria, except this: The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing home health care services in District 11. Section 408.035(1)(b), Florida Statutes. Aaction and Nursing Unlimited both contend there is a need in District 11 for at least two new or additional Medicare certified home health agencies. Each asserts that both CON applications can and should be approved; their respective applications are not mutually exclusive, and accordingly, they need not be comparatively reviewed with one another. The focus of the sole remaining criterion at issue, Subsection 408.035(1)(b), is on existing home health care providers. As acknowledged by AHCA in its State Agency Action Report (SAAR), in pure numbers the instant CON application proposals would increase availability and access in District 11. There is no AHCA rule formula or methodology to determine a numeric need, nor is there a fixed need pool applicable to this proceeding. In the absence of an Agency numeric need rule, the applicants each proposed reasonable need methodologies within their applications. AHCA did not propose any need methodology at hearing. AHCA's former home health agency numeric need methodology rule was invalidated because it was anti-competitive, understated potential actual need, and failed to consider health care economics, efficiency and cost containment. Principal Nursing v. AHCA, DOAH No. 93-5711RX (Final Order January 26, 1994); AHCA v. Principal Nursing Services, Inc., 650 So. 2d 1113 (Fla. 1st DCA 1995) (Affirmed the Final Order as to the need methodology, but reversed as to other portions of the rule unrelated to the issues here). Nursing Unlimited, through Michael Schwartz, applied the invalidated need methodology to demonstrate that even under that excessively conservative approach, at least 2 additional home health agencies are needed in District 11. When the applications were filed the most current home health visit utilization data was for calendar year 1994. The number of visits in 1994 was divided by the age 65+ population to determine a use rate, i.e., the number of home health visits per 100,000 population. The 1994 use rate was applied to the projected age 65+ population growth for the three horizon years of 1995-1997, a projection of 102,039 more patient visits in 1997 than there were in 1994, based on population growth alone. Next, Mr. Schwartz determined a cost-efficient agency size (CEAS) by determining from a review of District 11 existing home health agencies the point at which the average cost per home health visit was less than the statewide average cost per visit. In this case, the result was a CEAS of 34,973, which was divided into the number of projected new visits in the horizon year 1997 resulting from population growth alone, which calculation shows a numeric need for three new home health agencies in District 11. At the time the CON application was filed there was one approved, but not yet licensed home health agency, which was subtracted by the applicant from the net need figure, thus resulting in a net need for two new agencies. The recent historical data shows that home health care visits have been on the increase, both in terms of visits per 100,000 population and in terms of visits per patient. The amount of time spent by patients in the hospital is decreasing, which translates into increased need by patients for visits from home health agencies. The need for home health will continue to increase because it is a cost-effective alternative to nursing home placement and hospital care. Home health care services are less costly than care received in hospitals, in nursing homes, or on an outpatient basis. Thus, allowing greater access to home health services should reduce the overall cost of health care to payors, including Medicare. To address this trend Michael Schwartz offered a realistic, yet still conservative, numeric need projection which assumes an increased use rate beyond that which is based on population increase alone. Mr. Schwartz considered the cumulative increase in visits that occurred over the three-year period 1991-1994 and projected this forward to the horizon year of 1997. Although federal Health Care Finance Agency (HCFA) data suggests that visits will grow nationally at seven percent per year. Mr. Schwartz assumed only a seven percent increase over three years, which resulted in a growth of approximately 180,124 visits by 1997, and which divided by the CEAS yields a need for 5.2 new agencies. In hindsight, the conservative nature of this projection is apparent from a review of utilization data which has become available since the filing of the CON application. For example, rather than a growth in visits of 180,000 over the period 1995-1997, there was an actual increase of over 410,000 visits in 1995 and 1996 alone. Utilization data for 1997 is not yet available. Aaction presented three separate need methodologies in its application prepared by Mark Richardson. The first two methodologies applied a static use rate based on visits in 1994 to the projected population to determine total visits at the planning horizon. Recognizing that cost efficiencies maximize at an approximate range between 30,000 and 90,000 visits per year, Aaction divided the total projected visits by a conservative CEAS of 50,000. These methodologies yielded a need in District 11 for two additional home health agencies at the planning horizon. Using a CEAS of 30,000 visits would yield a need for three agencies instead of two. AHCA has recently determined that static use rates are inappropriate. (Allstar Care, Inc., etc. vs. AHCA, DOAH No. 96-4064, Final Order November 4, 1997). Nonetheless, application of over-conservative methodologies in this case can help counter the agency's unsubstantiated assertion that many visits are fraudulent or unnecessary. In its third methodology, Aaction assumed more realistically that home health use rates would continue to increase as suggested by historic data. In order not to overstate the potential growth rate, Aaction used a rate equal to one-half of the 1993-94 actual growth rate. Utilizing a 50,000 visit CEAS, this methodology yields a need of 7 to 9 new home health agencies in District 11 at the planning horizon. Using a 30,000 visit CEAS yields a net need for over 15 new home health agencies. Recalculating the need formulas by application of the now available 1995 and 1996 data, using a growth rate at 50 percent of the actual rate, and a CEAS of 50,000 visits, results in a need for 7 to 8 new agencies. If the static use rate were applied, the need would be 5 to 6 new agencies. Application of Aaction’s initial need methodologies with a static use rate based on 1996 utilization data yields a need for over 5 new agencies when a 50,000 visit CEAS is used. If a 30,000 visit CEAS is utilized, these methodologies yield a net need for 9 new home health agencies. Applying Aaction’s third methodology (i.e., utilization projected to increase at 50 percent of the actual increase between 1995 and 1996) yields a net need for over 7 or over 12 new agencies, depending on whether a 50,000 visit or 30,000 visit CEAS is applied. There are other indications of need for additional home health agencies in District 11. For example, a review of 1996 utilization data reveals that District 11 has only 1.7 home health agencies per 100,000 population, which is the lowest ratio of any district in the state. The average of all districts is 2.4 home health agencies per 100,000 population. Both applicants proposed fair and reasonable need methodologies which demonstrate a need in District 11 for at least 2 additional home health agencies, and potentially more. There is, therefore, a need for at least 2 more Medicare- certified home health agencies in District 11. Approval of both applications will increase the availability and accessibility of home health services in the proposed service areas within Dade County. Home health services are typically delivered in close proximity to the location of the agency and providers. Nursing Unlimited’s agency location is in the center of a large Latin and Haitian population, with the nearest Medicare certified home health agency approximately 15 miles away. Aaction's commitment is to a population that is difficult to serve. Local population accessibility to the proposed home health services would be increased by approval of both applications. Medicare-certified agencies apply their own admission criteria and decide whether to accept patients, leaving some patients in need and without access to services in the applicants' service area. An informal survey directed by Michael Schwartz suggests there are existing agencies which refuse to treat AIDS patients, that do not provide services at night and on weekends, and that refuse to treat people in poverty areas. The targeted Medicare-eligible population would enjoy enhanced accessibility and availability of home health services by both applicants, if approved. The addition to the district of a Medicare-certified home health agency (Nursing Unlimited) which utilizes a JCAHO- approved centralized case management system would also tend to enhance the availability, accessibility, and adequacy of services provided in the district. When non-Medicare-certified agencies receive a request to care for Medicare patients, the request must be forwarded to a Medicare-certified entity, which in turn will contact the patient. The non-Medicare agency may then be authorized under subcontract to contact and serve the patient and to bill the Medicare-certified agency for its services. In turn, the Medicare-certified agency will add on its overhead and forward a higher bill to Medicare. This process also results in delays in patient treatment. Approval of these applications would likely result in better patient care, without delays, and at lower costs. AHCA has determined that eliminating such subcontract arrangements will eliminate an unnecessary level of administrative costs. AHCA also discourages subcontract arrangements which remove direct control of patient care from the Medicare certified entity. See Allstar Care, supra. District 11 home health visits increased by 410,000 visits in 1995 and 1996. A projection of 600,000 new visits during 1995 through 1997 is reasonable. Nursing Unlimited and Aaction each project approximately 25,000 visits during their second year of operation. Approval of these applicants would not adversely impact the utilization of existing home health providers in the district. Both applicants here will specifically enhance access by the needy Hispanic population. AHCA offered no competent evidence to contradict the conclusions of the applicants' experts, nor did it effectively challenge the accuracy, validity, or reliability of the methodologies they employed. AHCA's expert and sole witness, James McLemore, is an application review specialist who candidly admitted he has no experience in the development of need methodologies but relies instead on the expertise of health care planners such as Mr. Schwartz or Mr. Richardson. Mr. McLemore's anecdotal testimony regarding fraudulent or phantom visits, and AHCA's concern that both state and federal agencies are investigating fraud in the home health care business, raise compelling licensing issues but are insufficient to defeat otherwise convincing evidence in favor of these certificates of need.

Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Agency for Health Care Administration enter its final order granting CON No. 8428 to Nursing Unlimited 2000, Inc. and CON No. 8432 to Aaction Home Health Care, Inc. DONE AND ORDERED this 22nd day of December, 1997, in Tallahassee, Leon County, Florida. MARY CLARK 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 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1997. COPIES FURNISHED: Michael Manthei Broad and Cassel 1130 Broward Financial Center 500 East Broward Boulevard Fort Lauderdale, Florida 33394 Moses E. Williams Office of the General Counsel Agency for Health Care Administration Fort Knox Building 3, Suite 3400 2727 Mahan Drive Tallahassee, Florida 32308-5403 R. David Prescott Ruthledge Ecenia Underwood Purnell and Hoffman, P.A. Post Office Box 551 Tallahassee, Florida 32302-0551 Jerome W. Hoffman, General Counsel Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive Tallahassee, Florida 32308-5403 Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403

Florida Laws (4) 120.569,  120.57,  408.035,  408.039 Florida Administrative Code (1) 59C-1.030
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UPJOHN HEALTHCARE SERVICES, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 83-003059 (1983)
Division of Administrative Hearings, Florida Number: 83-003059 Latest Update: Oct. 25, 1984

Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the parties' stipulated facts, the following facts relevant to these proceedings are found: Upjohn operates a number of home health agencies throughout the State of Florida, as well as in other states. Prior to 1975, a patient served by a proprietary home health agency could not obtain reimbursement under the Medicare program. Such agencies were not able to obtain a Medicare "provider number" unless they were licensed under State law. In 1975, the Legislature enacted the Home Health Services Act, Chapter 400, Part III, Florida Statutes, providing for the licensure of proprietary home health agencies. On July 1, 1977, the "establishment of a new home health agency" became one of the projects subject to Certificate of Need review. HRS's rules pertaining to Certificate of Need review were amended in October of 1977, to include the "establishment of a new home health agency or a new subunit of any agency" as projects subject to review". During the rule adoption process, HRS specifically considered the suggestion that expansions of service areas by existing home health agencies without new facilities be subject to Certificate of Need review. This suggestion was rejected on the belief that such a requirement was not statutorily authorized. Confusion existed within the various offices of HRS as to whether additional licensure and/or Certificate of Need review as required when an existing home health agency desired to extend the provision of services to other counties without opening a new subunit or other physical facility in the new county. Prior to 1982, officials within the Office of Community Medical Facilities the office responsible for the Certificate of Need program, generally took the position that the mere geographical expansion of services by an existing certificated and licensed home health agency did not require further Certificate of Need review as long as additional physical facilities were not contemplated. For example, in September of 1981, Upjohn was informed by the OCMF that a Certificate of Need was not required for the provision of home health services from its Jacksonville, Duval County, office to patients residing in Nassau, Baker or St. Johns Counties, as long as subunits or other physical facilities were not opened in those counties. The above four counties were all located within the same health service area. On the other hand, the Office of Licensure and Certification generally took the position that each county served must appear on the home health agency license. On occasion, the OLC required home health agencies to build new offices if it was found that an agency was geographically overextending itself in terms of appropriate supervision or quality of care concerns. It appears to have been the policy of the OLC, on most occasions, to defer to the OCMF the determination of whether additional Certificate of Need review was required prior to the issuance of a license listing additional counties or service areas. However, in January of 1980, the Director of the OLC took the position that petitioner's licensed Marion County home health agency could not provide services to Citrus County residents without applying for and obtaining a Certificate of Need, and thereafter having its license extended to operate in Citrus County. The record in the instant proceedings does not reflect that the OCMF was requested, either by the OLC or by Upjohn, to render a specific opinion as to whether additional Certificate of Need review was required for the extension of home health services from Marion County to Citrus County. In October of 1981, Upjohn requested advice from the OLC as to whether it could provide services from its Broward County office to patients in Palm Beach County. Noting that it was the understanding of the OLC that a Certificate of Need would be required to authorize any expansion of home health services, the OLC referred Upjohn's request to the OCMF. The matter was thereafter referred to the HRS legal staff. James M. Barclay, an attorney with the Office of Health Planning and Development, issued Legal Opinion 82-2 on the issue of whether a Certificate of Need was required before a home health agency, licensed to operate in certain counties within a health service area, could provide services to additional counties within the same health service area. It was Mr. Barclay's opinion that a licensed home health agency could provide services to additional counties within the same health service area without an additional Certificate of Need. The rationale for this opinion as that when the original Certificate of Need review occurred, the review criteria were applied to the entire health service area and thus the original Certificate was evidence of a need within the entire health service area. Based on this opinion, the OLC informed Upjohn that it could not expand its Broward County services to Palm Beach County without Certificate of Need review since the two counties were located in separate health service areas. The Deputy Assistant Secretary for Health Planning and Development, Gary J. Clarke, disseminated the Barclay opinion to the Directors of the Health Systems Agencies. In his cover letter, dated April 7, 1982, Mr. Clarke noted that "the memorandum clarifies existing law; namely, that a home health agency in one county may offer services in an adjoining county without obtaining a CON." Based upon the Barclay opinion and the Clarke cover letter, Upjohn informer its various Florida office managers that its existing home health agencies, though licensed only for a particular county, could deliver services in additional counties within the health service area without the need for further Certificate of Need review. Subsequent to the Barclay opinion and the Clarke distribution letter, there were changes in the Certificate of Need law, as well as leadership changes within HRS. The former Health Systems Agencies were abolished and replaced with District Councils, local involvement with the Certificate of Need process was virtually eliminated and the "health service areas" were changed to "districts," some with different boundaries. These changes prompted the Director of the OLC, Jay Kassack, to request of the new Deputy Assistant Secretary a clarification of the policy regarding Certificate of Need review for expansion of home health agency service areas. In order to be consistent with regard to home health agencies and to make clearer to HRS officials, applicants and the public how HRS would be applying the statutes and rules, HRS developed a "home health agency review matrix." Basically, the, review matrix limited geographical expansion of services (without Certificate of need review) to those counties in which the applicant could demonstrate that the criteria for review had been applied by the appropriate reviewing bodies, either the OCMF or the former local Health Systems Agencies. The former OCMF policy, as expressed in the Barclay/Clarke documents, of allowing carte blanche expansion within the health service area once a Certificate of Need had been obtained had thus changed to allowing expansion only when the applicant could demonstrate that the review criteria had been previously and actually applied to the specific county in which expansion was desired. The matrix was developed in February or March of 1983, and was distributed internally within HRS. Upjohn had several license applications for geographical expansion of services in early 1983. While advised in late March that a "revised ruling" was going into effect, Upjohn had no knowledge of the development of the review matrix. By letter dated April 8, 1983, Upjohn was advised that its license application to expand services from its Pinellas County office to the Counties of Hillsborough, Manatee and Pasco was denied for failure to obtain a Certificate of Need or exemption from review. By "OPLC Policy Letter No. 33-83" dated April 8, 1983, addressed to "All Home Health Agencies" and "Home Health Agency Association," the Director of the OLC, Jay Kassack, gave notice of the OLC position with regard to expansion of services in counties other than those noted on a home health agency license. The addressees were advised that "it is illegal to provide services in any area not covered under your current license." This policy letter was written in direct response to the review matrix. It was not until May, 1983, that Upjohn became aware of the existence of the review matrix. By letter dated May 5, 1983, the Medical Facilities Consultant Supervisor, Nathaniel Ward, advises counsel for Upjohn that, "we have a matrix which we must apply (Exhibit 1) when determining whether a Certificate of Need is required for expansion into the service area." Upjohn's Marion County home health agency obtained a "statement of need" (the statutory predecessor of the present Certificate of Need) in 1977, and received a license for that agency in 1978 which it has renewed on an annual basis. From and after August, 1982, and in reliance upon the Barclay opinion and the Clarke memorandum, Upjohn extended the provision of home health services, without adding new physical facilities, from its Marion County office into Citrus, Lake and Sumter Counties. These three counties are located within the same "health service area" and "district" as Marion County, but have not been specifically named in either a statement of need, certificate of need or license issued to Upjohn. Under protest and pursuant to the Kassack policy letter referred to in paragraph (10) above, Upjohn filed an application with the OLC to renew its Marion County home health agency license and to add to said license the counties of Citrus, Lake and Sumter. The OLC issued and renewed the Marion County license from August 1983 to August 1984, but denied Upjohn's request to list Citrus, Lake and Sumter Counties on the face of the license. As the sole ground for denial of the request, the OLC stated that Upjohn had failed to obtain a Certificate of Need or exemption from review for those counties pursuant to the Certificate of Need statutes and rules. In spite of the OLC's demands that Upjohn cease providing home health services in Citrus, Lake and Sumter Counties, Upjohn continued to provide such services. 0n August 30, 1983, HRS issued an Administrative Complaint seeking to revoke Upjohn's Marion County license, or impose other penalties, on the ground that the Marion County home health agency had been providing home health services in Citrus and/or Lake Counties without a license that lists those counties on its face. The review criteria of the Certificate of Need law is necessarily geographic intensive in measuring the needs, feasibility, accessibility and availability of alternative services of a particular area. HRS and the local health planning agencies utilize counties and service districts as the geographic unit by which to measure need for health services and facilities. One of the reasons counties are chosen is because population and other demographic data and statistics are readily available and obtainable for such geographical units.

Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that Upjohn's application to add Citrus, Lake and Sumter Counties to its Marion County license to operate a home health agency be DENIED until such time as a Certificate of Need is obtained for such services (Case No. 83-3059), and The Administrative Complaint dated August 30, 1983, be DISMISSED (Case No. 83-3248). Respectfully submitted and entered this 25th day of October, 1984, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 1984. COPIES FURNISHED: James D. Wing, Esquire Barbara R. Pankau, Esquire P.O. Box 3239 Tampa, FL 33601 Robert P. Daniti, Esquire (Former) Assistant General Counsel 1323 Winewood Blvd. Tallahassee, FL 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, FL 32301

Florida Laws (3) 400.471,  400.474,  775.021
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HOME HEALTH CARE OF BAY COUNTY FLORIDA, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 88-001353F (1988)
Division of Administrative Hearings, Florida Number: 88-001353F Latest Update: Jun. 29, 1988

Findings Of Fact 1. The initial action of HRS in regard to the application of Home Health Care of Bay's application for a CON, as set forth in the State Agency Action Report (SAAR), was to deny the application. 2. The SAAR, dated April 29, 1987, together with a cover letter dated April 30, 1987, advised Home Health Care of Bay that its application has been denied because "[t]here was no need demonstrated by Home Health Care of Bay for an additional home health agency in Bay County." These two documents further advised Home Health Care of Bay of its point of entry into Chapter 120, Florida Statutes. 3. Home Health Care of Bay availed itself of this point of entry by filing a reguest for a formal hearing pursuant to Section 120.57(1) on the initial decision to deny its application. 4. Home Health Care of Bay is a for-profit corporation under the laws of Florida, having been incorporated on December 10, 1986, prior to the SAAR and the initial denial letter. 5. Home Health Care of Bay has had its principal office in the State of Florida since its incorporation. 6. Home Health Care of Bay does not have and has never had more than 25 full-time employees. 7. At the time of its CON application and of the initial denial by HRS, Home Health Care of Bay had assets of $1,000, which was received from issuance of 1,000 shares of stock at $1.00 per share, and a note receivable of $21,600. The total net worth of Home Health Care of Bay at the time this action was initiated was $22,600. 8. By its response to Request for Admission 1 and its stipulation at hearing, HRS has stipulated that Home Health Care of Bay incurred attorneys' fees and associated costs in DOAH Case No. 87-2151 equal to $15,000 and that said fees and costs are reasonable. It is so found. 9. Following a formal hearing in DOAH Case No. 87- 2151, a Recommended Order was entered on December 17, 1987, recommending granting of the CON. A Final Order was entered by HRS on February 15, 1988. HRS adopted all of the Findings of Fact in the Recommended Order. HRS granted certain exceptions to the Conclusions of Law. Specifically, HRS granted exceptions as to the conclusions that its reliance on the statutory criteria is "nebulous," that its failure to establish a need methodology is arbitrary and capricious, that it was requiring applicants to prove "unmet need," and that the Hearing Officer relied in part on a need methodology abandoned by HRS. 10. HRS granted the requested CON to Home Health Care of Bay by this Final Order. 11. Findings of Fact in that Recommended Order, which were adopted by HRS, included findings that: A. HRS abandoned its "interim policy" regarding use of a need methodology in home health agency applications in late 1986. (Finding of Fact 56). B. HRS informed applicants that it had abandoned the interim policy only after applications were filed in the second batching cycle of 1986. (Finding of Fact 57). C. Applicants in this December, 1986, batching cycle, including Home Health Care of Bay, were asked for an unlimited extension of time within which HRS could render a decision. (Finding of Fact 58). D. Applicants who refuse to agree to an extension were evaluated on the basis of the "statutory need criteria." Applicants who did not agree to an extension were denied. (Finding of Fact 59). E. The new "policy" used by HRS to evaluate these applications (the ones who refused to grant extensions) put the burden of proof on the applicant to demonstrate an unmet need. Such a demonstration would be difficult to make. (Finding of Fact 62). F. HRS reviewed Home Health Care of Bay's application using the new "policy" based on the "thirteen statutory criteria." Such a review required Home Health Care of Bay to prove need by demonstrating an unmet need. (Finding of Fact 63). G. As evidenced by HRS' review of Home Health Care of Bay's application, a policy requiring an applicant to meet a negative burden of proof is unreasonable. It imposes a standard which is e for an applicant to meet. (Finding of Fact). 12. Fig in the Recommended Order set forth extensive the standard used by HRS to review the application Health Care of Bay and the reasons why the review was deficient and the determination to deny the application was flawed. 13. One Conclusion of Law which HRS did not reverse is that found on page 35 of the Recommended Order in the second full paragraph: Further, DHRS' preliminary decision had no reasonable basis in law or fact at the time it was made. It is this same preliminary decision which was set forth in the SAAR and which constituted the initial decision from which Home Health Care of Bay had a point of entry into Chapter 120 proceedings. 14. In attempting to justify its actions, HRS presented the testimony of Sharon Gordon-Girvin. Ms. Gordon-Girvin had no part in or knowledge of the initial decision of HRS to deny this application. Instead, shortly before and in preparation for the formal hearing in DOAH Case No. 87-2151, Ms. Gordon- Girvin reviewed the SAAR and the initial decision and agreed with HRS' counsel not to enter into a settlement with Home Health Care of Bay. Her testimony regarding the basis for and correctness of the initial denial is rejected as being irrelevant to the question of whether HRS had a reasonable basis in law and in fact at the time it initially denied the application. Additional, such after-the-fact rationalization and justification for HRS' actions is so self- serving as to merit little weight. 15. HRS failed to prove that its initial denial was reasonable in DOAH Case No. 87-2151 and it failed to prove in this case that there was any reasonable basis for its initial denial. 16. HRS did present evidence that Home Health Care of Bay may be able to recover some of its fees and costs through Medicare reimbursements amortized over at least five (5) years. However, the evidence was speculative and uncertain, and HRS did not offer evidence that Home Health Care of Bay will recover any or all of its fees and costs through Medicare reimbursements.

USC (1) 5 U.S.C 504 Florida Laws (3) 120.57,  57.105,  57.111
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HOSPICE OF PALM BEACH COMPANY, INC. vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 85-004270 (1985)
Division of Administrative Hearings, Florida Number: 85-004270 Latest Update: Apr. 28, 1986

The Issue Whether Petitioner Hospice of Palm Beach County, Inc. (Hospice) is entitled to a certificate of need (CON) from the Department of Health and Rehabilitative Services, Respondent, (HRS) in CON Action No. 3702 for a home health agency in Palm Beach County and the District IX service area?

Findings Of Fact Hospice provides special interdisciplinary services, including medical, psychological, spiritual, counseling and volunteer services, for persons in the terminal stages of illness. Hospice is licensed by HRS as a hospice under Chapter 400, Part V, Florida Statutes. Hospice has been qualified by the United States Health Care Financing Administration for participation in the Medicare hospice program. See Part 418, 42 Code of Federal Regulations. Hospice was the first hospice program in Florida to be accredited by the Joint Commission on the Accreditation of Hospitals (JCAH) as a hospice. JCAH accreditation includes approval of the home care component of Hospice's service. HRS has approved issuance of a certificate of need (CON No. 3693) for the establishment by Hospice of its own 24-bed freestanding inpatient facility. Hospice's inpatient facility will be the first free- standing hospice facility in Florida. Hospice's present service area is within Palm Beach County. Hospice's service area reaches from the southern border of Boynton Beach in Palm Beach County north to the Martin County line. Hospice's service area also extends west within the County to include service to Belle Glade, a multi-ethnic rural community. Approximately 25 percent of Hospice's patients are medically indigent, with little or no ability to pay for care. Over 28 percent of Hospice's patients in fiscal 1985 were members of ethnic minorities. Hospice was one of five applicants in its "batching" cycle seeking a certificate of need to establish a home health agency within local health District IX. The others were Palm Beach Gardens Home Health Agency (CON #3699), MEA (CON #3700), Coastal Health Corporation (CON #3701) and Medical Personnel Pool of Treasure Coast, Inc. (CON #3706). (A sixth applicant, Medical Personnel Pool of Palm Beach, Inc., CON #3698, was granted a certificate in an earlier cycle and not considered by HRS in this batch.) By letter dated June 14, 1985, HRS indicated that it had determined to deny Hospice a certificate of need to establish a home health agency in Palm Beach County. Hospice's substantial interests are affected by HRS' determination of denial. Section 400.601(3), Florida Statutes (1985), requires Hospice to provide care to terminally ill patients regardless of ability to pay, and to make such care available 24 hours a day, 7 days a week. Unless Hospice receives a certificate of need to establish a home health agency, it is ineligible for licensing by HRS under Chapter 400, Part III, as a home health agency and corresponding certification as a Medicare home health service provider. See § 400.462(2), Fla. Stat. (1985). Without a certificate of need for home health care, Hospice's financial ability to serve its hospice patients is not as great as it might be if it held such a CON. Without certification as a home health agency, Hospice cannot presently collect any reimbursement for home health care of medically indigent Medicaid patients. Hospice often experiences difficulty in collecting even private insurance payments for home health care of patients with such insurance. Hospice will suffer injury in fact as a result of HRS' determination and its interests are among those regulated by this action. Hospice filed a timely petition for a Section 120.57 administrative proceeding concerning HRS' decision on CON Action 3702. Prior to the decision in Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care, 447 So.2d 361 (Fla. 1st DCA 1984), HRS followed a rule generally precluding the issuance of a certificate of need for a new home health agency until the average daily census of each existing home health agency within the same service area had reached 300 patients. This rule was known as the "Rule of 300." In Johnson and Johnson, supra, the First District Court of Appeal struck the "Rule of 300" as arbitrary and inconsistent with Section 381.494(6)(c), Florida Statutes, which lists numerous criteria for evaluation of CON applications. In particular, the Court noted, the "Rule of 300" did not allow new agencies "where existing agencies are able but unwilling to provide services of a particular type or for a particular class of patients." 447 So.2d at 362. After the "Rule of 300" was struck, a statewide task force was created to develop new criteria to evaluate CON applications for new home health agencies. The statewide association of hospices, Florida Hospices, Inc., attempted to participate in the development of new criteria, but did not participate in this process. On April 5, 1985, HRS proposed new rule criteria for home health agency evaluations, which were the subject of a proposed rule challenge in September 1985 before the Division of Administrative Hearings. This proposed rule was struck down as invalid on March 12, 1986. These new criteria were proposed for use in addition to other relevant statutory and applicable rule criteria." In acting on the five CON applications in Hospice's "batch," HRS applied its invalidated proposed rule criteria and determined that within District IX as a whole (which includes Indian River, Martin, Okeechobee, St. Lucie and Palm Beach Counties), no new home health agencies were needed. However, in its analysis of the five applications in this batching cycle, HRS also stated that the District IX Local Health Council had indicated that Palm Beach County should be considered a separate subdistrict for home health agency evaluation. Although it found no need for new home health agencies in District IX as a whole in its analysis of this batching cycle, HRS, using its own newly proposed rules, found an existing need for two new home health agencies in Palm Beach County. HRS stated in its June 14, 1985, letter that Hospice's application was denied for the following reason: Use of the methodology developed by the special statewide work group to determine the need for home health agencies in District IX shows no numeric need for additional agencies in this district. HRS has determined for purposes of this proceeding that the following need exists in District IX for home health agencies, indicating a net need of five new agencies in District IX and a net need in Palm Beach County for five new agencies: Application Submittal Date: 12/84 Planning Horizon: 7/86 District 9 1986 (July) population: 65+ = 257,346 District 9 1986 (July) population: <65 = 809,845 1. 257,346 x .0578 = 14,875 Projected use for 65+ population 2. 809,845 x .00058 = 470 Projected use for <65 population 3. (14,875 + 470) x 33.3 = 510,989 Projected visits 7/86 4. 9,000 + (510,989 x 270) - 24,330 5. 410,989 9,000 ? 21,000 = 24 Agencies needed in District 9 for 7/86 24 Agencies - 19 licensed and approved = 5 Agencies needed in District 9 Subdistrict Allocation: Need: Indian River Projected 2 Existing 1 Net 1 Martin 2 2 0 Okeechobee 0 1 (1) Palm Beach 18 13 5 St. Lucie 2 2 0 This need is related solely to the planning horizon of July 1, 1986 established by HRS for Hospice's CON batch and other home health applications filed before the end of 1984. This need is not related to the later planning horizons applicable to District IX home health agency CON applications filed after 1984. Therefore, applicants in batches following Hospice's, which was the last batch submitted in 1984, are not substantially affected by this determination of need. For the purposes of this hearing, there are only two (2) denials by HRS of certificates of need for home health agencies in District IX and proposing service in Palm Beach County in CON batches prior to Hospice's (Joseph Morse Geriatric Center, CON Action No. 3621; A Professional Nurse, CON Action No. 3492) that have been challenged in administrative proceedings and are still pending without Final Order in those proceedings. Thus, Hospice's CON application as a home health agency is, in the worst case, third in line for licensure as a home health agency in District IX, without regard to the special circumstances of Hospice's case and assuming these denials by HRS are reversed in final agency action. Since there is a need for more than 3 new home health agencies in District IX and Palm Beach County based on the planning horizon applicable to Hospice's batch and no other valid request is pending in Hospice's batch, there is a numeric need for granting a CON to Hospice as a home health agency. There is a special need for access within Hospice's actual service area in Palm Beach County to home health services for the terminally ill, which services are provided by a hospice as opposed to existing or other proposed traditional home health agencies. There is additional need for access by the medically indigent to home health services within Hospice's service area in Palm Beach County, and within Palm Beach County in general. The 1985 District IX Hospice Services Plan provides that hospices generally should be licensed as a special type of home health agency. Of all pending applicants in this and the immediately prior batching cycles since 1984 seeking a certificate of need to provide home health services in Palm Beach County, Hospice is committed to providing the greatest percentage of its services for Medicaid and other medically indigent patients, in accordance with the State Health Plan. Hospice, due to its existing and proposed provision of home health services to the medically indigent, its service in Belle Glade, and its service to AIDS patients, as well as its services to the elderly, serves the need for care of low-income persons, medically underserved groups and the elderly. Hospice can provide higher quality of home health care to the terminally ill in its service area than any other existing home health provider or current applicant for a certificate of need to provide home health services in Palm Beach County. Hospice offers a new type of home health service within its service area for terminally ill patients and their families, including a special pediatric program for children with irreversible diseases. This type of service is an alternative to inpatient care, nursing home and traditional home health services. The applicant home health agencies affiliated with hospitals in District IX in Hospice's batching cycle have not shown that they can achieve greater economies or improvements of service than Hospice. Hospice provides the following research and health educational facilities: a) rotational internships for fourth- year medical students at the University of Miami Medical School; training for R. N. candidates at Florida Atlantic University; research support service to the Tropical Disease Center and Palm Beach County Public Health Department through Hospice's care for AIDS patients in the Belle Glade area; d) training for graduate students in psychology at Florida Atlantic University; e) training for seminary students at St. Vincent's Seminary in Boynton Beach; f) training for candidates for master's degrees in social work from Florida State University; and g) designation as second research and training site by the International Hospice Institute, an international research and professional education accrediting institution. No other home health agency in Palm Beach County provides or has proposed to provide the research or educational facilities referenced in the preceding paragraph. Hospice proposes to control its home health agency rather than to allow the home health agency to control its hospice functions. Hospice will have a positive effect on the clinical needs of health professional training in hospice care and related services in District IX and will make such training available to health professional schools. Hospice's proposal, which is based on a conservative growth projection of its historical patient service care needs, demonstrates the immediate and long-term financial feasibility of Hospice's non-profit project goals. Hospice's provision of home health services under a certificate of need will have a positive effect on the costs of and charges for home health services for the terminally ill and their families. Due to its inpatient hospital capability, Hospice is a regional resource and teaching center for the care of the terminally ill. Hospice has a positive impact on competition among providers of care to the terminally ill. Hospice has a positive impact on promotion of quality assurance due to its accreditation by the Joint Commission on Accreditation of Hospitals. No other home health agency in District IX is accredited by that national joint commission for provision of home health services. According to HRS' own determination, the District IX health plan calls for evaluation of home health services needs within the subdistrict of Palm Beach County. Under HRS' determination, that county subdistrict needs five additional home health agencies without regard to the special needs of the terminally ill. In addition, the 1985 District IX plan for hospice health services provides that hospices should be licensed as special home health agencies. Nothing in the 1985 District IX Health Plan suggests that "surplus" home health agencies in other District IX counties can provide access to service needed by the terminally ill and their families within Palm Beach County. According to HRS' determination, the provision of the State Health Plan addressing home health services deals with access of Medicaid and medically indigent patients to home health services. Hospice's proposal meets this goal of the State Health Plan because Hospice will provide 25% of its care to the medically indigent, even if Medicare reimbursement is available as a result of CON approval and home health agency licensure. On a percentage basis, Hospice proposes to provide 3 times more home health care services to the medically indigent than any other District IX applicant in its batching cycle and even a greater incidence than any District IX home health agency applicant in the immediately preceding batching cycle. Hospice's proposal also satisfies other goals and priorities of the State Health Plan not considered by HRS, including but not limited to the continued fostering of the hospice care alternative, potential increased provider participation in the Medicaid home health services program, and creation of funding mechanisms for hospice care of the medically indigent. Hospice is the only hospice program located within Palm Beach County providing and proposing to provide home health care to terminally ill patients and their families in its service area. Hospice can provide a higher quality of home care for the terminally ill than any other existing home health care provider in Palm Beach County due to its accreditation by JCAH and qualification for the Medicare hospice program including home health services. Hospice's home health care, due to provision of additional hospice services, and continuity of home health personnel serving each patient and patient family, is also more appropriate for the terminally ill than other traditional home health services. Hospice's on-call home health personnel must, by Hospice policy, reside no farther than 30 minutes from patients to be served on a round-the-clock basis. The 1985 District IX Health Plan endorses the 30-minute travel maximum for provision of hospice care at home. Even prior to Hospice's provision of service in Belle Glade, nearly one-third of Hospice's patients were members of ethnic minorities. The Belle Glade area served by Hospice is populated by ethnic minorities in need of home health care service. Hospice's development of a special program to serve AIDS patients in Belle Glade and throughout Palm Beach County will make needed home health care available to this underserved group. Other home health agencies recognize the special type of home health care provided by Hospice through their referrals to it. The existence of the Gold Coast Home Health Agency serving Broward County was the basis for HRS' determination that of all five applicants, only Hospice did not meet the criterion in Section 381.494(6)(c)6, Florida Statutes, evaluating the need for special services in adjoining areas. Both traditional and hospice-based home health agencies exist in adjoining District IX areas. Hospice has at present a paid staff of 33 and approximately 270 volunteers. As shown in its financial statements submitted with its application, Hospice has a broad base of community support sufficient to achieve its goals with the aid of the Medicare reimbursement mechanism. Since home health care is a vital component of hospice care, the operation of a home health agency by a hospice is both logically and philosophically a natural outgrowth of the developing hospice movement in the United States. Hospice has excellent prospects for the immediate and long-term financial feasibility of its project, especially if the regular Medicare reimbursement mechanism is made available. Hospice served more than 565 patients in fiscal 1985 and currently serves approximately 110-20 patients per month. Its estimated patient census used to calculate its 1985 and 1986 operating income and expenses in its CON application, therefore, is based on historical data and is conservative. Since Hospice has received approval for the first free- standing inpatient facility for the terminally ill in Florida, it will serve as a regional resource and training center for care of complex cases. Hospice, unlike any other applicant, will offer services complementary to home health care not available in adjacent service districts. Hospice's market entry as a licensed home health agency should stimulate other hospices to seek to meet the rigorous JCAH standards. Hospice provides many services not offered by traditional home health agencies at per visit charges that are competitive with those presently charged by those agencies. Hospice's market presence encourages competition among all home health agencies serving Palm Beach County, particularly for care of patients who are terminally ill or in the near-final stages of a catastrophic illness.

Florida Laws (3) 120.57,  400.462,  400.601
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TEHC, LLC vs AGENCY FOR HEALTH CARE ADMINISTRATION, 08-003693 (2008)
Division of Administrative Hearings, Florida Filed:Lauderdale Lakes, Florida Jul. 28, 2008 Number: 08-003693 Latest Update: Sep. 25, 2009

Conclusions Having reviewed the Notice of Intent to Deny the renewal license application for a home health agency, attached hereto and incorporated herein (Ex. 1), and other matters of records, the Agency for Health Care Administration ("Agency") finds and concludes as follows: By Order dated August 26, 2008, the Administrative Law Judge closed its files in the above-styled case. Petitioner filed a status report withdrawing the application for renewal oflicense on August 20, 2009, attached hereto and incorporated herein (Ex. 2). The denial of the renewal application for Petitioner home health agency is upheld and the application for license renewal has been withdrawn. Upon consideration of the foregoing, it is ORDERED that the Agency's file is hereby closed. DONE and ORDERED at Tallahassee, Leon County, Florida this ffj day of ,2009. A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDING SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN THIRTY (30) DAYS OF THE RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Monica L. Rodriguez Attorney for Petitioner Dresnick & Rodriguez, P.A. One Datran Center 91 South Dadeland Blvd, Suite 1610 Miami, Florida 33156 (U.S. Mail) Nelson E. Rodney Assistant General Counsel Agency for Health Care Administration 8350 NW 52nd Terrace, Suite #103 Miami, Florida 33166 (Interoffice Mail) Home Care Unit Agency for Health Care Administration' 2727 Mahan Drive, MS #34 Tallahassee, Florida 32308 (Interoffice Mail) Stuart M. Lerner Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (U.S. Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 2 (Interoffice Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true copy of the foregoing was sent to the above-named addressees by U.S. Mail, or the method designated, on thisLday of s5xpf 009. Richard Shoop. Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building 3 Tallahassee, Florida 32308-5403 (850) 922-5873 3 CHARLIE CRIST GOVERNOR June 23, 2008 Kelly Marie Damas, Admin istrator- 1 / / ·.:;, '. TEHC LLC '- -...· , .. ' ' 3317NW10thTerrSte404 i' r:;_'.'./fl Fort Lauderdale, Fl 33309 J:.:·:>r 1.< \ ii{;;_ License Number: 204390961 Case#: 2008007748 NefltE't)iKIN1'ENT:·q,oDENY It is the decision of this Agency that the application for renewal licensure as a home health agency, for TEHC, LLC., located at 3317 NW 10th Terrace, Suite 404, Fort Lauderdale, Fl 33309, is DENIED. The basis for this action is pursuant to authority of Section 120.60 Florida Statutes (F.S.) and Section 408.815 (1), (c) and (d), F.S. which states as follows: (1) In addition to the grounds provided in authorizing statutes, grounds that may be used by the agency for denying and revoking a license ... include any of the following actions by a controlling interest: A violation of this part, authorizing statutes, or applicable rules. A demonstrated pattern of deficient performance. The home health agency did not demonstrate compliance with Chapter 400, Part III, F.S. and the state home health agency rules, Chapter 59A-8, Florida Administrative Code (F.A.C.) at the home health agency licensure survey conducted Mr..y 5 through May 8, 2008. The plan of correction due June 7, 2008 as submitted to the Agency's Field Office was not acceptable. Non­ compliance was found in the following areas: The home health agency failed to ensure the Director of Nursing established and conducted an on-going quality assurance _program that evaluated the effectiveness of all the provided service for consistency with professional standards and anticipated outcomes. (H 224) The pertinent statutes and rules that apply include the following: 59A-8.0095(2) (c), F.A.C. "Director of Nursing: (c) The director of nursing shall establish and conduct an ongoing quality assurance program which assures: 2727 Mahan Drive,MS#34 Tallahassee, Florida 32308 EXHIBIT j Visit AHCA Online at http://ahca.myflo rida.com 'Tehc LLC Page 2 · ·-:June 23;·2008· Case assignment and management is appropriate, adequate, and consistent with the plan of care, medical regimen and patient needs; Nursing and other services provided to the patient are coordinated, appropriate, adequate, and consistent with plans of care; All services and outcomes are completely and legibly documented, dated and signed in the clinical service record; Confidentiality of patient data is maintained; and Findings of the quality assurance program are used to improve services." The home health agency failed to ensure that the Registered Nurse (RN)provide case management for 5 of 17 nursing and therapy patients. This was evidenced by: failure to provide an assessment prior to documenting a start of care comprehensive assessment for one patient; failure to provide supervision for the Licensed Practical Nurse (LPN) in the performance of duties for two patients and failure to assure progress reports were made to the physician for patients receiving nursing services when the patient's condition changed for two patients. The pertinent statutes and rules that apply include the following: 59A-8.0095 (3) (a), F.A.C. "Registered Nurse. A registered nurse shall be currently licensed in the state, pursuant to Chapter 464, F.S., and: Be the case manager in all cases involving nursing or both nursing and therapy care. Be responsible for the clinical record for each patient receiving nursing care; and Assure that progress reports are made to the physician for patients receiving nursing services when the patient's condition changes or there are deviations from the plan of care." The home health agency failed to ensure that the RN retained full responsibility for the care given and making supervisory visits to the patient's home for 3 of 17 sampled patients as evidenced by failure to provide supervision for the LPN in the performance of duties for two patients; failure to provide supervision for the Home Health Aide (Aide) and failed to prepare a written Aide assignment/instructions for services to be provided to the patient for 3 patients. (H 231) The pertinent statutes and rules that apply include the following: 59A-8.0095 (3) (b), F.A.C., "Registered Nurse. A registered nurse may assign selected portions of patient care to licensed practical nurses and home health aides but always retains the full responsibility for the care given and for making supervisory visits to the patient's home." The home health agency failed to provide supervision for the LPN in the perfonnance of duties for 2 of 17 patients. (H 235) Tebc LLC Page 3 --+---- ----:June-23--;-2008·--------- ·-- --------- --- The pertinent statutes and rules that apply include the following: 59A-8.0095 (4) (a), F.A.C., "Licensed Practical Nurse. A licensed practical nurse shall be currently licensed in the state, pursuant to Chapter 464, F.S., and provide nursing care assigned by and under the direction of a registered nurse who provides on-site supervision as needed, based upon the severity of patients medical condition and the nurse's training and experience. Supervisory visits will be documented in patient files. Provision shall be made in agency policies and procedures for annual evaluation of the LPN's performance of duties by the registered nurse." The home health agency failed to ensure the LPN reported any changes in the patient's condition to the RN and document the changes in the patient's clinical record for 1 of 17 sampled patients. (H 236) The pertinent statutes and rules that apply include the following: 59A-8.0095 (4) (b), F.A.C., "Licensed Practical Nurse A licensed practical nurse shall: Prepare and record clinical notes for the clinical record; Report any changes in the patient's condition to the registered nurse with the reports documented in the clinical record; Provide care to the patient including the administration of treatments and medications; -------and --- , ---------------- , -------------, ------------------ -------------·· Other duties assigned by the registered nurse, pursuant to Chapter 464, F.S." The home health agency failed to ensure that the care provided followed the plan of treatment for 11 of 17 sampled patients. The home health agency also failed to ensure a verbal order obtained by a home health agency nurse was put into writing and signed by the attending physician for 1 of 17 sampled patients. (H 302) The pertinent statutes and rules that apply include the following: Section 400.487 (2) F.S., "When required by the provisions of chapter 464; part I, part III, or part V of chapter 468; or chapter 486, the attending physician, physician assistant, or advanced registered nurse practitioner, acting within his or her respective scope of practice, shall establish treatment orders for a patient who is to receive skilled care. The treatment orders must be signed by the physician, physician assistant, or advanced registered nurse practitioner before a claim for payment for the skilled services is submitted by the home health agency. If the claim is submitted to a managed care organization, the treatment orders must be signed within the time allowed under the provider agreement. The treatment orders shall be reviewed, as frequently as the patient's illness requires, by the physician, physician assistant, or advanced registered nurse practitioner in consultation with the home health agency." 'Tehc LLC Page 4 _June 2},-200&------- ----- Chapter 59A-8.0215(2), F.A.C., "Home health agency staff must follow the physician, physician assistant, or advanced registered nurse practitioner's treatment orders that are contained in the plan of care. If the orders cannot be followed and must be altered in some way, the patient's physician, physician assistant, or advanced registered nurse practitioner must be notified and must approve of the change. Any verbal changes are put in writing and signed and dated with the date of receipt by the nurse or therapist who talked with the physician, physician assistant, or advanced registered nurse practitioner's office." The home health agency failed to ensure 9 of 17 patients were advised of the payment for home health agency services before care was started and were clear about the payor source and any charges required from the patient. (H 304) The pertinent statutes and rules that apply include the following: Section 400.487 (1), F.S., "Services provided by a home health agency must be covered by an agreement between the home health agency and the patient or the patient's legal representative specifying the home health services to be provided, the rates or charges for services paid with private funds, and the sources of payment, which may include Medicare, Medicaid, private insurance, personal funds, or a combination thereof. A home health agency providing skilled care must make an assessment of the patient's needs within 48 hours after the start of services." Chapter 59A-8.020 (2), F.A.C., "At the start of services a home health agency must establish a written agreement between the agency and the patient or client or the patient's or client's legal representative, including the information described in Section 400.487(1), F.S. This written agreement must be signed and dated by a representative of the home health agency and the patient or client or the patient's or client's legal representative. A copy of the agreement must be given to the patient or client and the original must be placed in the patient's or client's file." Chapter 59A-8.020 (3), F.A.C., "The written agreement, as specified in subsection (2) above, shall serve as the home health agency's service provision plan, pursuant to Section 400.491(2), F.S., for clients who receive homemaker and companion services or home health aide services which do not require a physician, physician assistant, or advanced registered nurse practitioner's treatment order. The written agreement for these clients shall be maintained for one year after termination of services." The home health agency failed to demonstrate effective communication between interdisciplinary team members to coordinate services as outlined in the plan of care for 3 of 17 'patients and failed to ensure that 8 of 17 sampled patients received the skilled nursing services in accordance with the physician's VvTitten plan of care. (H 306) The pertinent statutes and rules that apply include the following: 'Tehc LLC Page 5 --·-- June 23, 20-08 ··· - ----- Section 400.487 (6), F.S., "Tl1e skilled care services provided by a home health agency, directly or under contract, must be supervised and coordinated in accordance with the plan of care." The home health agency failed to ensure the registered nurse completed the initial evaluation visit for 1 of 17 patients. The Director of Nursing who signed the initial evaluation visit never made a home visit to the patient. (H 307) The pertinent statutes and rules that apply include the following: 59A-8.008 (1), F.A.C.., "In cases of patients requiring only nursing, or in cases requiring nursing and physical, respiratory, occupational or speech therapy services, or nursing and dietetic and nutrition services, the agency shall provide case management by a licensed registered nurse directly employed by the agency.'' The home health agency failed to provide written notice for tenninating home health services to 1 of 3 sampled patients. There was no written notification regarding the date of termination; reason for termination or a referral to another agency with a plan for continued services prior to the termination. (H 316) The pertinent statutes and rules that apply include the following: Chapter 59A-8.020 (4), F.A.C., "When the agency terminates services for a patient or client needing continuing home health care, as determined by the patient's physician, physician assistant, or advanced registered nurse practitioner, for patients receiving care under a physician, physician assistant, or advanced registered nurse practitioner's treatment order, or as determined by the client or caregiver, for clients receiving care without a physician, physician assistant, or advanced registered nurse practitioner's treatment order, a plan must be developed and a referral made by home health agency staff to another home health agency or service provider prior to termination. The patient or client must be notified in writing of the date of termination, the reason for termination, pursuant to Section 400.491, F.S., and the plan for continued services by the agency or service provider to which the patient or client has been referred, pursuant to Section 400.497(6), F.S. This requirement does not apply to patients paying through personal funds or private insurance who default on their contract through non-payment. The home health agency should provide social work assistance to patients to help them determine their eligibility for assistance from government funded programs if their private funds have been depleted or will be depleted." The home health agency failed to develop a plan of care for 6 of 17 sampled patients that included all of the required items needed to appropriately serve patients including goals to support the physician's treatment orders, level of staff to provide the services to reach the goals, and the frequency of visits to conduct the services by appropriate home health agency staff. (H 320) Tehc LLC Page 6 -June 23, 2008 The pertinent statutes and rules that apply include the following: Section 400.487 (2). f.S., "When required by the provisions of chapter 464; part I, part III, or part V of chapter 468; or chapter 486, the attending physician, physician assistant, or advanced regis1ered nurse practitioner, acting within his or her respective scope of practice, shalJ establish treatment orders for a patient who is to receive skilled care " Chapter 59A-8.0215 (1), F.A.C., "A plan of care shall be established in consultation with the physician, physician assistant, or advanced registered nurse practitioner, pursuant to Section 400.487, F.S., and the home health agency staff who are involved in providing the care and services required to carry out the physician, physician assistant, or advanced registered nurse practitioner's treatment orders. The plan must be jncluded in the clinical record and available for review by all staff involved in providing care to the patient. The plan of care shall contain a list of individualized specific goals for each skilled discipline that provides patient care, with implementation plans addressing the level of staff who will provide care, the frequency of home visits to provide direct care and case management." The home health agency failed to demonstrate evidence that patients were informed in advance about any changes to the plan of care prior to implementation of the changes for 1 of 17 patients. (H 321) The pertinent statutes and rules that apply include the following: Chapter 59A-8.0215 (3), F.A.C., "The patient, caregiver or guardian must be informed by the home health agency personnel that: He has the right to be informed of the plan of care; He has the right to participate in the development of the plan of care; and He may have a copy of the plan if requested." The home health agency failed to maintain a clinical record in accordance with accepted professional standards for 12 of 17 patients. (H 350) The pertinent statutes and rules that apply include the following: Section 400.491 (1), F.S,, "The home health agency must maintain for each patient who receives skilled care a clinical record that includes pertinent past and current medical, nursing, social and other therapeutic information, the treatment orders, and other such information as is necessary for the safe and adequate care of the patient. When home health services are terminated, the record must show the date and reason for termination " 'Tehc LLC Page 7 June 23,-2008 The home health agency failed to include all of the required items in the discharged patient clinicai records for 3 of 3 patients. There were no tem1ination summaries as required. (H 356) The pertinent statutes and rules that apply include the following: Chapter 59A-8.022(5), F.A.C., "Clinical records must contain the following: Source ofreferral; Physician, physician assistant, or advanced registered nurse practitioner's verbal orders initiated by the physician, physician assistant, or advanced registered nurse practitioner prior to start of care and signed by the physician, physician assistant, or advanced registered nurse practitioner as required in Section 400.487(2), F.S. Assessment of the patient's needs; Statement of patient or caregiver problems; Statement of patient's and caregiver's ability to provide interim services; Identification sheet for the patient with name, address, telephone number, date of birth, sex, agency case number, caregiver, next of kin or guardian; Plan of care or service provision plan and all subsequent updates and changes; Clinical and service notes, signed and dated by the staff member providing the service which shall include: Initial assessments and progress notes with changes in the person's condition; Services rendered; Observations; Instructions to the patient and caregiver or guardian, including administration of and adverse reactions to medications; (i) Home visits to patients for supervision of staff providing services; G) Reports of case conferences; (k) Reports to physicians, physician assistants, or advanced registered nurse practitioners; (1) Termination summary including the date of first and last visit, the reason for termination of service, an evaluation of established goals at time of tennination, the condition of the patient on discharge and the disposition of the patient." The home health agency failed to submit their comprehensive emergency management plan to the local county health department for review and approval. (H 376) The pertinent statutes and rules that apply include the following: Section 400.497(8) (c), F.S. "Preparation of a comprehensive emergency management plan pursuant to s. 400.492. (c) The plan is subject to review and approval by the county health department. During its review, the county health department shall contact state and local health and medical stakeholders when necessary. The county health department shall complete its review to . Tehc LLC Page 8 - --June 23.1008 ensure that the plan is in accordance with the criteria in the Agency for Health Care Administration rules within 90 days after receipt of the plan and shall approve the plan or advise the home health agency of necessary revisions. If the home health agency fails to submit a plan or fails to submit the requested information or revisions to the county health department within 30 days after vvTitten notification from the county health department, the county health department shall notify the Agency for Health Care Administration. The agency shall notify the home health agency that its failure constitutes a deficiency, subject to a fine of $5,000 per occurrence. If the plan is not submitted, information is not provided, or revisions are not made as requested, the agency may impose the fine." Chapter 59A-8.027 (2), F.A.C., "The plan, once completed, will be forwarded electronically for approval to the contact designated by the Department of Health." Section 400.492, F.S., "Each home health agency shall prepare and maintain a comprehensive emergency management plan that is consistent with the standards adopted by national or state accreditation organizations and consistent with the local special needs plan. The plan shall be updated annually ... " Chapter 59A-8.027(3) and (4), F.S., "The agency shall review its emergency management plan on an annual basis and make any substantive changes. (4) Changes in the telephone numbers of those staff who are coordinating the agency's emergency response must be reported to the agency's county office of Emergency Management and to the local County Health Department. For agencies with multiple counties on their license, the changes must be reported to each County Health Department ap.d each county Emergency Management office. The telephone numbers must include numbers where the coordinating staff can be contacted outside of the agency's regular office hours. All home health agencies must report these changes, whether their plan has been previously reviewed or not, as defined in subsection (2) above." · The home health agency failed to renew the application for a Certificate of Exemption that authorizes the performance of waived laboratory tests. (H 390) The pertinent statutes and rules that apply include the following: Section 483.091,F.S. "Clinical laboratory license.--A person may not conduct, maintain, or operate a clinical laboratory in this state, except a laboratory that is exempt under s. 483.031, unless the clinical laboratory has obtained a license from the agency A license is valid only for the person or persons to whom it is issued and may not be sold, assigned, or transferred, voluntarily or involuntarily, and is not valid for any premises other than those for which the license is issued. 483.031 Application of part; exemptions.--This part applies to all clinical laboratories within this state, except: (1) A clinical laboratory operated by the United States Government. (2) A clinical laboratory . Tehc LLC Page 9 · - · June 23;-2008 that performs only waived tests and has received a certificate of exemption from the agency under s. 483.106. (3) A clinical laboratory operated and maintained exclusively for research and teaching purposes that do not involve patient or public health service. 483. l 06 Application for a certificate of exemption.--An application for a cenificate of exemption must be made under oath by the owner or director of a clinical laboratory that performs only waived tests as defined ins. 483.041. A certificate of exemption authorizes a clinical laboratory to perform waived tests. Laboratories maintained on separate premises and operated under the same management may apply for a single certificate of exemption or multiple certificates of exemption ... EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Anne Menard, Manager Home Care Unit cc: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 Arlene Mayo-David, AHCA Delray Beach Field Office Manager Track & Confirm Search Resuhs Label/Receipt Number: 7160 3901 9845 4743 6663 Status: Delivered Your item was delivered at 11:36 AM on June 26, 2008 in FORT LAUDERDALE, FL 33309. Track.& Confirm FAQs Enter Label/Receipt Number. Options Track & Confirm by email Get current event information or updates for your item sent to you or others by email. ( /,h,>) fgnns Oov'I Services .Jobs Priv11.c;y Policy Tenns_ofUse • Nation;il_&.Premier Accounts Copyright© 1999-2007 USPS. All Rights Reserved. No FEAR Act EEO Data FOIA http://trkcnfrm l .smi.usps.com/PTSintemetWeb/Inter Labellnquiry .do 7/21/2008 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION Agency ,i' ., :, In RE: Licensure Renewal Application of Care Admi :i: : TEHC,LLC AHCA No. 2008007748 License No. 204390961 I REQUEST FOR FORMAL HEARING The law firm of Dresnick & Rodriguez, P.A., notices its appearance as counsel for TEHC, LLC, in conjunction with the above-referenced matter. All pleadings, documents, and other communications should be provided to TEHC's counsel at the address below. TEHC disputes the allegations of fact contained in the Notice oflntent to Deny and requests that this pleading be considered a demand for a formal hearing, pursuant to Sections 120.569 and 120.57(1), Florida Statutes, and pursuant to Rule 28-106.2015,. Florida Administrative Code, before an Administrative Law Judge appointed by the Division of Administrative Hearings. In support of this Petition, TEHC states the following: The Petitioner is TEHC, TLC, 3317 NW 10th Terrace. Suite 404. Fort Lauderdale, FL 33309. TEHC's telephone number is 954-351-1895, and the facsimile number is 954-351-1820. TEHC's counsel should be contacted at the address and fax number below. TEHC disputes allegations of fact including, but not limited to, those in paragraphs 1, 6, 7, 8, 9, 11, 12, 15 and 16 of the Notice oflntent to Deny, and requests an Administrative Hearing regarding these allegations. In addition, TEHC disputes that they DRESNICK & RODRIGUEZ, P.A., ONEDATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, F'L 33156-7817 • (305) 670-9800 AHCA No. 2008007748 License No. 204390961 have demonstrated a pattern of deficient performance, and that the plan of correction submitted in June, 2008 was not acceptable. TEHC received the Notice oflntent to Deny on June 26, 2008. The Agency's file number in this case is 2008007748. Respectfully submitted, DRESNICK & RODRIGUEZ, P.A. Attorneys for TEHC, LLC One Datran Center 9100 South Dadeland Blvd, Suite 1610 Miami, FL 33156 Off: (305) 670-9800 Fax: (305) 670-9933 '£' Monica L. Rodriguez) Florida Bar No. 986283 2 DRESNICK & RODRIGUEZ, P.A., ONE DATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, FL 33156-7817 • (305) 670-9800 AHCA No. 2008007748 License No. 204390961 CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing has been furnished by telefax and U.S. Mail on July 16, 2008 to: Nelson Rodney, Assistant General Counsel, Agency for Health Care Administration, 8350 N.W. 52nd Terrace, Suite 103, Miami, FL 33166, with a copy via telefax and U.S. Mail to Richard Shoop, Agency Clerk, 2727 Mahan Drive, Mail Stop # 3, Tallahassee, Florida 32308. '-<:;.., )...f?. .c..,...:_ Monica L. Rodriguez O ') 3 DRESNICK & RODRIGUEZ. P.A., ONEDATRAN CENTER, SUITE 1610, 9100 SOUTH DADELAND BOULEVARD, MIAMI, FL 33156-7817 • (305) 670-9800 08/20/2009 15 51 FAX 305 870 9933 ?RESN ICK & RODRIGUEZ, PA 002/003 STATE OF FLORJDA

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PRUITTHEALTH-ALACHUA COUNTY, LLC AND ALACHUA COUNTY HRC, LLC vs AGENCY FOR HEALTH CARE ADMINISTRATION, 16-001696CON (2016)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Mar. 24, 2016 Number: 16-001696CON Latest Update: Nov. 02, 2016

The Issue This proceeding involves Certificate of Need (“CON”) Application No. 10400 filed by Petitioner, PruittHealth-Alachua County, LLC (“PruittHealth”), and CON Application No. 10397 filed by Alachua County HRC, LLC (“Alachua HRC”). The applicants each seek to establish a new community nursing home in District 3/subdistrict 3-2, Alachua County, Florida. PruittHealth is seeking a 94-bed nursing home, consistent with the projected bed need for that subdistrict; Alachua HRC seeks to aggregate nine additional beds from subdistrict 3-3 for a total of 103 beds. The nature of the controversy is whether, on balance, PruittHealth’s or Alachua HRC’s application best satisfies the applicable criteria for approval.

Findings Of Fact (Facts 1 through 6 are as stipulated by the parties.) On October 2, 2015, the Agency published a need for 94 additional community nursing home beds in Nursing Home Subdistrict 3-2, which consists of Alachua County. In that same publication, the Agency published a need for nine additional community nursing home beds in subdistrict 3-3, which consists of Putnam County. See Florida Administrative Register, Vol. 41, No. 192 (Oct. 2, 2015); Fla. Admin. Code R. 59C-2.200(3)(f)5. Putnam County is adjacent to Alachua County. In response to the October 2, 2015, fixed need pool announcement, Alachua HRC filed CON Application No. 10397 and PruittHealth filed CON Application No. 10400. Alachua HRC’s and PruittHealth’s applications were co- batched and comparatively reviewed. On February 19, 2016, the Agency preliminarily approved Alachua HRC’s CON Application No. 10397 and preliminarily denied PruittHealth’s CON Application No. 10400. The Agency published official notice of its decision on February 22, 2016, in the Florida Administrative Register, Vol. 42, No. 35. On March 7, 2016, PruittHealth timely filed a petition for formal administrative hearing to contest the Agency’s preliminary approval of Alachua HRC’s CON application. On March 18, 2016, Alachua HRC timely filed a cross- petition supporting the Agency’s preliminary decision to approve its CON application and to preliminarily deny PruittHealth’s CON application. (The following findings of fact are based on the evidence presented at final hearing, both oral testimony and documentary in nature.) The Parties Alachua County HRC, LLC Alachua HRC was established to apply for a CON in Alachua County. Alachua HRC will be supported by its management company and operator, Clear Choice. Alachua HRC was formed by experienced nursing home administrators and health planning professionals with significant experience in the establishment, construction, and operation of nursing homes. Alachua HRC is primarily owned by Samuel B. Kellett, an owner of several nursing homes in Florida which contract with Clear Choice for management. Through his companies, including SBK Capital, Mr. Kellett has a long track record of successful nursing home ownership and operation. Mr. Kellett, through predecessor and subsidiary companies, originally obtained certificates of need for most of the nursing homes now operated by Clear Choice, primarily in central Florida. Mr. Kellett has never failed to build and operate a nursing home after receiving a CON. Mr. Kellett has continuously invested in renovations and maintenance of his nursing homes. Since 2013, Mr. Kellett has invested millions of dollars in renovations and expansion construction at his Florida nursing homes. Several more facilities are planned for similar renovations in the near future. The expansions typically include the addition of upscale amenity space, an increase in the number of private rooms, outdoor living spaces, and significantly enhanced gym and rehabilitation areas. These renovations have attracted higher numbers of short-term rehabilitation patients, while continuing to allow Clear Choice to offer long-term care, primarily to Medicaid nursing home residents, in Mr. Kellett's facilities. PruittHealth-Alachua County, LLC PruittHealth is likewise a single purpose entity formed for the purpose of pursuing a CON to operate a skilled community nursing facility in Alachua County. PruittHealth is affiliated with PruittHealth, Inc. That company was founded in 1969 as the Toccoa Nursing Center in Toccoa, Georgia. PruittHealth, Inc. provides administrative related services to all of its affiliated healthcare providers in Florida, Georgia, North Carolina, and South Carolina. PruittHealth (the applicant) would benefit from those same services. The parent company of PruittHealth, Inc. is United Health Services, Inc., which includes in its structure 94 skilled nursing and rehabilitation centers, four assisted living facilities, one independent living facility, 29 hospice agencies, 19 home health agencies, one adult day care center, six pharmacies, and several other health care related businesses. PruittHealth, Inc. is a family-owned health care provider. It is the 11th largest provider of skilled nursing services in the United States. It cares for about 24,000 nursing home residents and has about 16,000 employees, referred to as “partners.” Because PruittHealth, Inc. is family-owned, it does not have the pressures (or, conversely, the oversight) associated with reporting to shareholders or meeting outside expectations. Among the skilled nursing facilities operated by PruittHealth, Inc. are five facilities dedicated to caring for war veterans, a facility dedicated to caring for the medically underserved, and a facility that serves the developmentally-disabled children population. PruittHealth, Inc.'s corporate philosophy centers around its continuum of care by which one provider that is really good at providing services across a multitude of service lines can do a better job than a lot of different providers that have to transition the same patient across the service line(s). PruittHealth, Inc. currently owns and operates one nursing home in Florida, PruittHealth – Santa Rosa, and has received certificates of need to construct three more. Agency for Health Care Administration AHCA is the state agency responsible for, inter alia, regulating the CON program and monitoring CON approvals. As recognized by AHCA, both the applicants are more than able to successfully and appropriately operate their project if approved. The Proposals Alachua HRC/Clear Choice Alachua HRC proposes to build a 103-bed nursing facility to be located in Alachua County on the eastern side of Gainesville. The facility would meet the need of subdistrict 3-2 (94 beds in Alachua county) and the need of subdistrict 3-3 (9 beds in Putnam county). Subdistricts 3-2 and 3-3 are contiguous, and Alachua HRC proposes to build the project in subdistrict 3-2, as close to subdistrict 3-3 as practicable. Alachua HRC's proposed site is reasonably located to provide services to both Alachua County and Putnam County. The proposed site is on Highway 20, which is the main road between Gainesville and Palatka, the major city in eastern Putnam County. The site was chosen to promote ease of access to both Alachua County and Putnam County residents by auto and via bus route. In Alachua and Putnam counties, existing nursing homes are clustered in western Alachua County around Gainesville, and in eastern Putnam County around Palatka, a significant distance apart. There are currently no nursing homes located between downtown Gainesville and Palatka. Alachua HRC's skilled nursing facility will be located in this geographic gap and will meet the needs of nearby populations. A large over-age-sixty-five population resides on the western side of Putnam County adjacent to Alachua County. Some therapy patients from Putnam County are already receiving care at hospitals in Gainesville. Alachua HRC's facility will provide care to patients in Alachua County, as well as patients on the western side of Putnam County. Regardless of the ease of access to the proposed site, Alachua HRC proposes to provide transportation for residents and families who are not able to reach the facility on their own. Alachua HRC is proposing to construct a facility consisting of 75,641 square feet of new construction with a construction cost of $12,586,662 and a total project cost of $19,675,000. The proposal envisions over 55 percent of the patient days being provided to Medicare residents and 41 percent of the patient days being provided to Medicaid residents. Seventy-four percent of the beds (i.e., 77) will be private, i.e., single-bed rooms. Alachua HRC proposes to condition its CON on having a left ventricular assist device program; providing the Lee Silverman Voice Treatment Loud and Big programs; having two hydrotherapy pools; providing infusion therapy services; having an anti-gravity treadmill; obtaining HUR therapy equipment; having a wellness check program; performing home assessments, medication reconciliations, and rehabilitation team assessments, as necessary; and transportation as needed from home to therapy treatment. Alachua HRC's architectural design focuses on providing a variety of destinations under one roof so that patients are encouraged to get out and about, rather than spending time solely in their rooms. Destinations include a second-floor gym, a number of bistro options, a theater, a chapel, and attractive outdoor living spaces. Though most of the rooms are private rooms, even the semi-private rooms have walls separating the beds. Alachua HRC also designed its facility to be a more appropriate setting for hospice care. PruittHealth PruittHealth applied for a CON to construct a 94-bed nursing home in Alachua County, Florida. The facility would involve 66,077 square feet at a construction cost of $9,449,739 and a total project cost of $15,873,409. Sixty-two percent of its beds (58 beds) would be in private, single-bed rooms. PruittHealth proposes to provide 66 percent of its patient days to Medicaid patients. The proposed Medicaid projection is slightly above the current Alachua County average. Twenty-nine percent of its patient days would be for Medicare patients. PruittHealth proposes to condition its CON on seeking Joint Commission accreditation of its facility; implementing a program to reduce hospital readmissions; having a minimum of 62 percent of its beds located in private rooms; participation in a corporate-wide quality assurance and performance improvement initiative; implementing a medical records system with point right technology and clinical kiosks throughout the facility; installation of resident safety features such as Wanderguard and Call Guard; and implementation of the top five special amenities and the top five clinical initiatives identified as needed in the Alachua County market. Statutory and Rule Review Criteria Section 408.035(1)(a): The need for the health care facilities and health services being proposed. Rule 59C-1.030(2)(a): The need that the population to be served . . . and the extent to which all residents of the district, and in particular . . . the elderly, are likely to have access to those services. There is no argument that the fixed need pool established a need for additional nursing home beds in District 3, subdistricts 3-2 and 3-3. PruittHealth seeks to satisfy the need in subdistrict 3-2, i.e., 94 beds; Alachua HRC seeks to address the need in both subdistricts (103 beds). Alachua HRC relied on its management company’s experience and on letters from the proposed locality to identify specific needs in the area. Alachua HRC's application suggests the existence of a gap in the availability of high intensity rehabilitative services and equipment in Alachua County. Because hospitals are now incentivized to discharge patients “quicker and sicker,” a majority of nursing home patients discharged from hospitals are patients that require robust rehabilitative care. As a result, nursing homes are now required to provide a stronger and broader portfolio of services to maximize their patients' potential. PruittHealth conducted a survey and met with local citizens to identify what it considered the most needed design features, special operational initiatives, clinical services, and special amenities that formed the basis of what would be offered at its proposed Alachua County nursing home. The top bed and program mix factors it identified were offering a high percentage of private rooms, providing Medicare and short-term rehabilitation services, and providing Medicaid services. The top five special operational initiatives that were identified were offering a high percentage of private rooms; implementing programs to reduce hospital readmissions; providing electronic medical records; possessing resident safety technologies; and maintaining a high ratio of total nursing hours per patient day. The top clinical programs identified as needed were providing mental health/behavioral services; diabetes care; medication management; hospice care; and HIV/AIDs care. Finally, the top special amenities that were identified as needed were providing specialized care staff; possessing state-of-the-art rehabilitation suites and a therapy pool; and offering custom meal planning and multiple dining options. The survey also had a specific question in regard to access issues by payor source; it was observed that that 60 percent of the Respondents believed that subdistrict 3–2 residents currently have access issues for Medicaid services. No other competent or persuasive evidence was presented to substantiate that survey finding. Neither of the methods utilized by the parties was particularly helpful in determining whether there was a specific need for one proposal over the other. Alachua HRC supplied support letters from past users or persons knowledgeable about its provision of services. Not surprisingly, the letters included glowing reports about Clear Choice. PruittHealth, on the other hand, did some informal surveys of the public in general, including some persons generally associated with the provision of health care services. It also conducted a “meet and greet” session where informal conversations about long-term care in general were conducted. Again, it is not surprising that the people who attended the free food and drink sessions were supportive of PruittHealth. Neither of the “need determinations” had a high degree of sophistication or statistical validity. Nonetheless, the findings by both parties were considered in the decision rendered herein. The conclusion that can be drawn from the information provided by the parties is that there is a desire for certain services or amenities in the service area, including: 1) A high percentage of private rooms within the facility; 2) Short-term, robust rehabilitative services; 3) A high ratio of nurse hours per patient day; 4) State of the art rehabilitation suites, including therapy pools; and 5) Provision of service to persons whose care is paid by Medicaid. Each of the applicants, to some extent, proposed to meet those desires expressed within the community. Both propose a high percentage of private rooms, although Alachua HRC has more private rooms than PruittHealth (77 to 62, respectively). Both project the provision of intensive short-term rehabilitation care. Again, Alachua HRC has a larger focus in this area than does PruittHealth. Each of the applicants proposes a ratio of nurse hours per patient day that is admirable. Both applicants include rehabilitation suites, though the equipment proposed by Alachua HRC seems more state of the art than does PruittHealth’s equipment. And while both propose therapy pools, Alachua HRC will have two pools (in recognition of the fact that pools can often be soiled by human accident or be out of service due to maintenance. Having two pools provides assurance that there will not be a loss of that service when something such as that occurs). Both applicants propose to serve Medicaid residents. PruittHealth projects that 66 percent of its patients will be Medicaid eligible, closely matching the existing Medicaid percentage in the service area (64 percent). Alachua HRC proposes to serve a lower percentage of Medicaid residents due to its primary focus on short-term rehabilitative care, i.e., those with a payor source of Medicare. The Agency no longer accepts Conditions in a CON application relating to Medicaid, so the proposals are not as strictly monitored as they once were. Section 408.035(1)(b): The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant. Rule 59C-1.030(2)(d): When determining accessibility, consideration of service to the medically underserved, Medicare, Medicaid and the indigent, and “the extent to which the applicant offers a range of means by which a patient will have access to its services”. There is no real dispute that either of the applicants can provide exceptional care in the facilities they propose. Though they each raised questions of whose facilities had the most awards or recognitions, which had experienced bad surveys, and that kind of thing, the differences were insignificant. Both can provide a high quality of care to residents. The range of services proposed by each applicant is similar, as they are in most skilled nursing facilities. Some facilities concentrate more on one area, some on another, but all the services generally exist. The applicants here are no exception. Other providers in the area will compete for residents in all payor classes and all levels of care. Each of the applicants will likely realize its projected payor mix as it directs its marketing efforts accordingly. Section 408.035(1)(c): The ability of the applicant to provide quality of care and the applicant's record of providing quality of care. As noted in the previous section, both applicants are capable of and expected to provide quality care to their residents. Some of the support for this was set forth in the CON applications and via testimony at final hearing. Some examples follow. One measure of the ability to provide quality of care is the staffing being proposed. It is generally recognized that the more nursing hours of care that are provided per patient day, the better the care is likely to be. PruittHealth proposes to provide 1.72 hours of nursing care and Alachua HRC is proposing 1.70 hours per patient, so the difference is negligible. The fact that Alachua HRC proposes a higher level of services and should be expected to have higher levels of nursing care gives PruittHealth the advantage in this one area. There are some differences in other areas of staffing as well: Alachua HRC has considerably more therapy staff, 30.5 to 9.3 full-time equivalent employees (“FTEs”), which is to be expected based on the applicants’ different payor mix projections. Alachua HRC also has more administrative staff, to 6.4, but some of that may be attributable to the fact that some of the FTEs in PruittHealth’s nursing staff could also be deemed administrative. The total nursing staff, including RNs, LPNs, and aides, is 82.5 for Alachua HRC and 72.2 for PruittHealth. The total FTEs for the applicants is 165 for Alachua HRC and 113 for PruittHealth. PruittHealth, Inc.'s lone Florida facility, PruittHealth - Santa Rosa, is rated 5 stars by both the Center for Medicaid and Medicare Services (“CMS”) and AHCA. It has been recommended for the Gold Seal award by AHCA. It has been awarded the Silver Star by the American Health Care Association. PruittHealth - Santa Rosa's most recent survey, and three of its past five surveys, have been deficiency free. Its administrator was named Administrator of the Year for Florida in 2013. Its hospital readmission rate is consistently lower that the state and national average. Finally, it was recently named as one of the “Best Nursing Homes in the U.S.” by U.S. News & World Report. This facility will be the template for the PruittHealth project in Alachua County. The PruittHealth, Inc. consolidated group of companies have a well-developed corporate headquarters infrastructure that provides regional oversight and consulting and management systems to monitor, correct and improve quality of care throughout the chain. The company has been growing steadily over the years and has developed effective programs and human resources to ensure quality of care. PruittHealth, Inc.'s efforts in other facilities have resulted in it delivering a high quality of care. This is demonstrated by PruittHealth, Inc.'s pursuit and receipt of industry-quality awards, its licensure record, and its survey history. As part of its management practices for facilities, PruittHealth, Inc. has several well-defined and effective programs to promote quality; significant evidence and testimony was provided as to its “Go for the Gold,” “Committed to Caring Campaign,” and “Quality First Pledge” initiatives and company- wide goals. The PruittHealth, Inc. chain does regularly pursue quality designations through recognized industry quality award programs or designations, such as: The American Health Care Association's national quality award program is one such program to which PruittHealth, Inc. has made a firm commitment. PruittHealth, Inc. has been able to achieve the Silver Award for its facility in Santa Rosa County, Florida. For its other facilities, it has obtained nine silver awards and 65 bronze awards. The PruittHealth, Inc. companies have achieved Joint Commission accreditation at 12 of their facilities. PruittHealth has offered as a Condition on its CON a requirement that the proposed facility shall achieve such designation. Lastly, the PruittHealth, Inc. facilities have obtained the distinction by the U.S. News & World Report by having 22 of its facilities designated “Best Nursing Homes in the U.S.” PruittHealth, Inc. has an excellent regulatory survey history. It has a significant number of its facilities which have been deficiency free in the last four years. While PruittHealth, Inc. has had some facilities in the past which have received I and J-tags, i.e., those which indicate immediate jeopardy, it was demonstrated that (1) for several of the facilities, those tags were incurred before PruittHealth, Inc. owned the facilities, and (2) in all instances, it responded promptly and corrected the matters or events which generated such tags. Clear Choice operates three facilities that have received the Governor's Gold Seal designation. Only five percent of all nursing homes obtain a Gold Seal designation. A fourth Clear Choice facility was eligible for Gold Seal status and was making its application complete at the time of final hearing. Clear Choice provides higher quality care than PruittHealth, Inc. according to CMS's star rating system, especially in the area of staffing. On a scale of 1 to 5, Clear Choice offers better ratings than PruittHealth, Inc. for health inspection rating (3.2 to 3.1), staffing rating (4.4 to 2.6) and RN staffing rating (4.3 to 2.9). On average Clear Choice rates at 3.8 stars and PruittHealth, Inc. at 3.4. Clear Choice has a higher percentage of five-star facilities than PruittHealth, Inc. Conversely, PruittHealth, Inc. has a higher percentage of one-star and two-star facilities than Clear Choice. Clear Choice has a track record of providing state-of- the-art rehabilitation equipment, gyms, and pools that are not provided by other nursing homes. As noted above, the application contains strong documentation of the rehabilitative services and equipment Alachua HRC will provide. Specifically, Alachua HRC conditioned its application on the provision of an array of rehabilitative services and equipment. It also conditioned its application on provision of clinical staff to support such services and on providing at least $150,000 of charity care annually, as in common in its facilities. Clear Choice offers therapy programs in pulmonary rehabilitation, physical therapy and respiratory therapy. It offers a stroke program with nine certified specialists and plans to certify more specialists. Clear Choice offers LVAD for cardiac care; mist therapy for wound care; Lee Silverman Voice treatment focused on the Parkinson's population; a program with certified specialists in lymphedema treatment; VitalStim to strengthen muscles for swallowing; aquatic therapy; and FEES therapy to assess swallowing capability. Clear Choice expends substantial funds providing continuing education and training to its therapy staff and certified specialists for facilities it manages. That will include the project at issue here for Alachua HRC. Alachua HRC proposes an array of state-of-the-art rehabilitation equipment such as wheelchair-accessible HUR equipment for building strength; two therapy pools by Hydroworx; an AlterG Anti-Gravity Treadmill which allows patients to exercise while only bearing a portion of their body weight instead of their full body weight; a portable BioSway for balance training; a wheelchair accessible Kinesis pulley system for exercise; NuStep and SCIFIT systems and an Omnicycle for cardiac rehabilitation; and E-Stim and VitalStim for swallowing treatment. Alachua HRC plans to offer all of its therapy services and its equipment to both long-term and short-term patients. Because it offers several options and a fresh Bistro- style dining approach, Clear Choice facilities spend more per patient on food than the average nursing home. Clear Choice facilities implement robust quality assurance programs such as welcome meetings to go over medications and therapies, Care Plan meetings, AdvaCast program, Team TSI, and medication reconciliation. During Care Plan meetings, specialist physicians, such as Dr. Medina-Sanchez, collaborate with facility staff regarding the results of their patient visits. They also discuss outcomes, prognoses, goals, and other medical issues, to assure that patients, families and physicians all understand the same expectations after discharge. These Care Plan meetings occur for both short-term and long-term care patients. Clear Choice has also been selected as a nursing home partner to hospitals paid under a bundled system. Clear Choice was selected for the bundled programs based on its quality measures and readmission rates. During quality surveys, PruittHealth, Inc. has received 50 J and K-tags and 36 G-tags across 19 facilities, or roughly 20 percent of PruittHealth, Inc. facilities. Of PruittHealth, Inc. facilities, 17 have received I-tags and J-tags under PruittHealth, Inc.'s watch. Since its inception nine years ago, only one Clear Choice facility has ever received an immediate jeopardy tag, and it was from a single incident and survey. There was considerable testimony at final hearing concerning readmission rates, i.e., the external benchmark utilized by CMS to measure the number of hospital-discharged patients admitted to a skilled nursing facility who return to a hospital within 30 days. CMS has developed sophisticated statistical techniques to adjust raw data (observed rates) for the acuity of the patients seen at different facilities and management styles (adjusted rates). Unfortunately, CMS has not disclosed exactly how it makes the adjustments, so it is virtually impossible to make comparisons between different providers. In the present case, PruittHealth provided credible evidence that its readmission rates are measurably better than Clear Choice’s readmission rates for existing facilities. This could be, in part, due to Clear Choice’s patient mix which includes considerably more short-term intensive rehabilitation residents. Clear Choice conducts a number of activities to avoid readmissions. Clear Choice's interdisciplinary team reviews all admissions and discharges within the 30-day readmission time slot. Clear Choice partners with the Medicare-contracted group advising on readmissions, Health Service Advisory Group, and the Nursing Home Collaborative to track data used to track readmissions. Clear Choice has achieved relatively low readmission rates for the medically complex patients it serves. Clear Choice has concerns about PruittHealth’s policies on readmissions to the extent they appear to incentivize holding patients longer in skilled nursing facilities rather than releasing them to a hospital for care. Specifically, the statement by PruittHealth’s medical expert that “part of our bonus structure . . . is based on readmission rates,” could lead to conclusions that patients’ needs are being manipulated. However, in general, both applicants had reasonable and seemingly effective plans for keeping their admission rates at or near the State average. Section 408.035(1)(d); The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. AHCA determined that both applicants fulfilled this criterion equally. However, PruittHealth points out that it provided the audited financial statements of its parent company even though it was not required. PruittHealth questioned the commitment of Mr. Kellett to the Alachua HRC project because his personal or business financial statements were not included with the application. The totality of the evidence and testimony by Ms. Kennedy proves otherwise. Section 408.035(1)(e): The extent to which the proposed services will enhance access to health care for residents of the service district. Both applicants will provide services to persons within the service area who require skilled nursing care, whether it is traditional long-term care, subacute care and rehabilitation, or other kinds of care. Alachua HRC’s proposed location, east of the existing cluster of nursing homes in Alachua County, will be in closer proximity to residents of Putnam County. Section 408.035(1)(f): The immediate and long-term financial feasibility of the proposal. Both of the applicants (through parent companies or affiliates) are experienced in the business of owning and operating skilled nursing facilities. While the single purpose entities which filed the CON applications have not independently financed construction of a facility, they are each related to companies with vast experience and financial wherewithal. Notwithstanding, each applicant raised concerns about the other, some of which will be discussed herein. PruittHealth, on the Source of Funds form in Schedule 3 of the CON application, chose section 2 – Operating Cash Flows, and Section 4 – Non Related Party Financing, as its source of funding for the project. As documentation in support of its source of funds, PruittHealth provided: (1) a letter from an institutional lender, Synovus Bank indicating an interest in financing the project; (2) a letter from PruittHealth, Inc.’s senior vice president of Treasury Management and Treasurer addressing a $36 million working capital line of credit which, as of the date of the CON application, had an unused balance of $26,100,000 and had $19.8 million at the time of the hearing; and (3) another letter of its senior vice president formally committing the funds of PruittHealth under the capital line of credit to finance the equity portion (25 percent) of the Synovus Bank financing, and also the internal cash flow and cash on hand of PruittHealth, Inc. as shown on its audited financial statement. There is some evidence that PruittHealth’s estimated land costs and construction costs, and therefore its amortization and depreciation expenses, are understated. Further, PruittHealth is in the midst of a large nursing home bed expansion, including three CONs approved in the State of Florida: a 77-bed facility in Bay County; a 97-bed CON in Clay County; and an 86-bed facility in Leon County. The Bay and Clay County projects have a commence-construction deadline of September 2016, but neither project is currently financed. The Leon County project is scheduled to commence construction within nine months, but financing, land purchase, permitting, and such have not yet been accomplished. The three facilities will require a total of about $33 million, with two thirds of that required almost immediately. Obtaining those loans may be impaired by PruittHealth’s need to refinance approximately $150 million in debt during the next three years. Further, its debt ratios seem to exceed the benchmarks set forth in the Dodd-Frank Act, creating a potential impediment to acquiring additional loans. Although the size and strength of PruittHealth, Inc. seem sufficient to handle the financial concerns set forth above, the existence of three pending CONs in Florida creates some doubt. That those projects are on such short timelines for construction also indicates a need for PruittHealth, Inc. to focus on them without incurring additional obligations. Long Term Financial Feasibility Both applicants, with support from their respective mentor organizations, will likely realize long-term financial feasibility in their proposed projects. However, neither of the applicants’ proposals was without fault. PruittHealth used reasonable methodologies and assumptions for its project cost, utilization and fill-up rates, staffing, and pro forma financial statements, i.e., Schedules 1, 4, 5, 6, 7, and 8 of the application. Using its actual operating results at other related facilities is reasonable and demonstrates a legitimate basis for legitimacy of the projections. However, many of the financial projections relied upon by PruittHealth were derived from unverified information. While the projections appear reasonable from an overview perspective, there were many items that appeared to be guesstimates or plucked from other, perhaps dissimilar types of projects. There appears to be insufficient nursing staff to cover both the skilled and long-term patients, but the numbers could be increased as needed (but would require additional costs). And, because the salaries for nurses were pulled from a public website, they may be suspect. Alachua HRC's financial schedules were based on Clear Choice's actual experience at another Clear Choice facility, Sun Terrace, which is very similar to the Alachua HRC proposal. The pro forma presumably captured every expense Alachua HRC is expected to incur and appears reasonable. On the revenue side, the pro forma is also based on actual experience of Clear Choice facilities. A projection of 97-percent occupancy is unusual. But, due to Alachua HRC's high percentage of private rooms, the projected occupancy of 97-percent is reasonable and achievable. Two Clear Choice facilities, Melbourne Terrace and Spring Lake, currently experience over 97-percent occupancy. Both facilities recently underwent renovations to add the private rooms and large gyms like the ones planned for the Alachua project. Additionally, several other Clear Choice facilities achieved greater than 95-percent occupancy, even in facilities that do not yet boast a compliment of private rooms. Clear Choice's projected occupancy rate is only three percent higher than PruittHealth's and is reasonable. Clear Choice projects a total of 165 FTEs to staff the Alachua HRC project versus only 113.1 FTEs that PruittHealth projects for its project. Clear Choice’s staffing projection is also based on the Sun Terrace facility, which is similar to the Alachua HRC proposal. The projected staffing is based on actual Florida experience and is reasonable. There is little difference between the applicants for the per diem projections for the larger payor groups of Medicare and Medicaid. The difference in the overall revenue between the two applicants is primarily a function of Clear Choice's higher proportion of Medicare patients. Its higher expenses than PruittHealth are due to the higher level of care being offered to the Medicare/short-term rehabilitation patients. However, on aggregate, both of the applicants would likely achieve positive long-term financial results. Section 408.035(1)(g): The extent to which the proposal will foster competition that promotes quality and cost-effectiveness. Neither applicant currently has a nursing home in Alachua County. Therefore the approval of either applicant will, to some extent, increase competition. Both applicants propose high-quality nursing home programs at competitive costs. Section 408.035(1)(i): The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. Rule 59C-1.030(2)(a) . . . The need that the population to be served . . . and the extent to which all residents of the district, and in particular low income persons . . . and the elderly, are likely to have access to those services. This criterion no longer holds the weight it once held in nursing home CON cases. The advent of Medicaid managed care for nursing home residents changed the dynamic of traditional Medicaid care, and AHCA no longer views this criterion as vastly important. Clearly, PruittHealth proposes a higher Medicaid census (64 percent) that does Alachua HRC (41 percent). However, when including dual eligible residents (i.e., those patients who are admitted into the facility as Medicare patients but would qualify for Medicaid at the end of their qualifying stay), Alachua HRC’s percentage of Medicaid residents increases to about 58 percent. Presumably, employing the same stratagem for PruittHealth would increase its Medicaid census as well. AHCA no longer accepts conditions on the CON for provision of a specified percentage of Medicaid care. Unlike days of yore, applicants are not granted any special consideration on the basis of their Medicaid projections. PruittHealth points out that it is attempting to be consistent with the percentage of Medicaid care currently extant in the service area. It did not provide persuasive evidence that meeting that percentage was especially significant.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Respondent, Agency for Health Care Administration, approving CON Application No. 10397 filed by Alachua County HRC, LLC, for a 103-bed skilled nursing facility in Alachua County, AHCA District 3, subdistrict 3-2. DONE AND ENTERED this 16th day of September, 2016, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of September, 2016. COPIES FURNISHED: Jay Adams, Esquire Broad and Cassel Post Office Box 11300 Tallahassee, Florida 32302 (eServed) Seann M. Frazier, Esquire Parker, Hudson, Rainer and Dobbs, LLP Suite 750 215 South Monroe Street Tallahassee, Florida 32301 (eServed) Jonathan L. Rue, Esquire Parker, Hudson, Rainer and Dobbs, LLP Suite 3600 303 Peachtree Street Northeast Atlanta, Georgia 30308 (eServed) Richard Joseph Saliba, Esquire Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32303 (eServed) Kevin Michael Marker, Esquire Agency for Health Care Administration Mail Stop 3 2727 Mahan Drive Tallahassee, Florida 32308 (eServed) Frank P. Rainer, Esquire Broad and Cassel Suite 400 215 South Monroe Street Tallahassee, Florida 32301 (eServed) Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed) Stuart Williams, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 (eServed) Elizabeth Dudek, Secretary Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 1 Tallahassee, Florida 32308 (eServed)

Florida Laws (5) 120.569,  120.57,  408.035,  408.039,  408.040 Florida Administrative Code (1) 28-106.217
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AGENCY FOR HEALTH CARE ADMINISTRATION vs BETTER LIVING HOME HEALTH AGENCY, 12-001663MPI (2012)
Division of Administrative Hearings, Florida Filed:Miami, Florida May 11, 2012 Number: 12-001663MPI Latest Update: Feb. 06, 2013

Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement, attached as Exhibit “A.” Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the g& Le a Say « focseeng B08 , ote, in Tallahassee, Florida. aoe Lb 7/ A , ZABETH 4 Myth Y Agency for Health’ Care Administration 1 Filed February 6, 2013 2:06 PM Division of Administrative Hearings A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Sheri Creel AHCA Investigator Medicaid Program Integrity 2727 Mahan Drive, MS#6 Tallahassee, Florida 32308 (VIA Interoffice Mail) Martin Lopez Better Living Home Health Agency 7791 NW 46 Street, Suite 215 Doral, Florida 33166 (VIA US MAIL) Shena Grantham, Esquire Agency for Health Care Administration 2727 Mahan Drive, MS#3 Tallahassee, Florida 32308 (Via Interoffice Mail) Agency for Health Care Administration Bureau of Finance and Accounting 2727 Mahan Drive Building 2, Mail Station 14 Tallahassee, Florida 32308 (Interoffice Mail) Ken Yon, Bureau Chief Medicaid Program Integrity 2727 Mahan Drive Building 2, Mail Station 6 Tallahassee, Florida 32308 (Interoffice Mail) Bureau of Health Quality Assurance 2727 Mahan Drive, Mail Stop 9 Tallahassee, Florida 32308 (Interoffice Mail) Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Via U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail on this the CP aay of COLL , 2013. Sa

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