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of the renewal application for Petitioner home health agency is upheld and the application for license renewal has been withdrawn.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
The Issue The ultimate issue is whether the application of Home Care Associates for a Certificate of Need to establish a Medicare-certified home health agency in Okaloosa and Walton Counties should be granted. The principal factual issue is whether there is a need for an additional agency and the principal legal issue is what criteria for need should be applied. The statutory criteria for determining need is Section 381.705, Florida Statutes. In this proceeding, the Petitioner showed its entitlement to a CON using the statutory criteria set out in Section 381.705, Florida Statutes. GENERAL STATEMENT Proposed Findings of Fact were filed by the Petitioner and the Intervenors. The Respondent adopted and incorporated the Intervenor's Proposed Findings of Fact adding to the Intervenor's findings its own proposed findings numbered 1 through 20. Proposed findings submitted by the parties are addressed in an Appendix hereto.
Findings Of Fact All home health care agencies in the State of Florida must be licensed and those home health care agencies which want to participate in the Medicare program must also obtain a Certificate of Need (CON). Medicare is a federally funded health program for the elderly and certain disabled persons. Medicare provides reimbursement only for the following part-time and intermittent home care: skilled nursing, physical therapy, speech therapy, home health aide, and medical social services. Medicare does not reimburse for custodial care or 24-hour-a-day care (adult congregate living facilities or nursing homes) or acute care services (hospitals). In order for a provider of Medicare home services to be reimbursed, the provider must have a CON and serve Medicare-eligible persons who: (a) are referred by order of a physician, (b) are home bound, (c) require skilled care, and (d) require skilled services only on a part-time basis. The patient must have rehabilitative potential and need skilled home care for Medicare to reimburse for home care. The overall goal of Medicare home health services is to have the patient functioning at his/her optimum level using rehabilitative services and having registered nurses and other skilled professionals to instruct the family and patient in rendering patient care. Medicaid provides reimbursement to providers only for skilled nursing services and home health aide services to patients who meet strict income and asset limitations. No reimbursement is provided for any other services. Medicaid has maximums or caps on reimbursement for services rendered under the program, and will pay for the services rendered up to the amount of the caps which are based upon allowable patient care costs. Medicaid reimburses only a fixed amount established by HRS for a specific service. Respondent, HRS, is the state agency responsible for administering the State Health Planning Act pursuant to Sections 381.701 through 381.715, Florida Statutes. The Petitioner, Home Care Associates of Northwest Florida, Inc. (Home Care), is a Florida corporation owned by Marck Ehrman, M.D., Warren A. Phillips, Dennis L. Sauls, Ronald O. White, and Steven P. Espy. Dr. Ehrman is a practicing hematologist/oncologist in Ft. Walton Beach, Florida. Home Care filed a Letter of Intent on October 8, 1986 and on December 15, 1986, it actually filed a CON application for a Medicare-certified home health agency to be established in Okaloosa and Walton Counties in the State of Florida. These counties are in Subdistrict IB of HRS District I which is composed of four counties. This application was identified by HRS as CON Action No. 4911. Okaloosa and Walton Counties are an appropriate service area for Home Care. Home Care's application was placed in the December 15, 1986 batching cycle by HRS, which preliminarily denied the application. There were no other applications for a Medicare- certified home health agency in Okaloosa and Walton Counties filed in said batching cycle with which Home Care's application could be comparatively reviewed. HRS published notice of its denial in 13 FAW 1806 (May 8, 1987). Home Care timely requested an administrative hearing by petition filed with HRS on May 11, 1987. Choctaw filed a timely Petition to Intervene on August 14, 1987, and Northwest filed its Petition to Intervene on August 28, 1987. Both petitions were filed more than one month before the scheduled final hearing, and Choctaw was granted standing to intervene by Order of the Hearing Officer dated August 20, 1987, and Northwest was granted standing to intervene by Order of the Hearing Officer dated September 4, 1987. Both Intervenors were determined to be existing providers of Medicare home health services in the geographic area for which Petitioner had applied for a CON. The basis for the denial of the Petitioner' application for Certificate of Need was based upon the Respondent's determination that: There was no need demonstrated by Home Care Associates of Northwest Florida for an additional home health agency to serve the residents of Okaloosa and Walton Counties. Marta V. Hardy was the Deputy Assistant Secretary for Regulation and Health Facilities, Department of Health and Rehabilitative Services, from September 1984 through June 1987. Ms. Hardy was responsible for home health agency policy and was the ultimate decision maker with regard to the preliminary denial of the instant Certificate of Need. (Petitioner's PFF paragraph 19) 1/ In the Fall of 1984, Respondent attempted to promulgate a proposed rule on home health care facilities to replace a rule on need which had been invalidated in an earlier rule challenge proceeding. This proposed rule was invalidated in 1985 because it was based on a use rate methodology which contained arbitrary criteria. On May 15, 1986, in response to invalidation of the proposed rule, Bob Sharp, administrator of Comprehensive Health Plans for the Department of Health and Rehabilitative Services, published an interim policy by memorandum which was used to review applications for CON's for home health agencies. This interim policy utilized a variation of the previously invalidated rule but attempted to correct criticisms which had resulted in the invalidation of the proposed rule. The Sharp memorandum was a public document and interested persons were aware of this memorandum and the policies expressed therein. The interim policy promulgated by Sharp was applied to home health agency applications beginning with the first batching cycle in 1986. The interim policy used a use rate/population methodology which projected the number of Medicare enrollees using home health services. The projected number of users was multiplied by the average number of visits per Medicaid home health user. Under the interim policy the total number of visits was divided by 9,000 to determine the gross number of agencies needed. Nine thousand visits was deemed by agency planners to constitute a large enough use base to sustain a home health agency based on the agency's assessment of the economies of scale of home health operations. The total number of licensed and approved agencies was subtracted from the gross number of agencies needed to yield the number of new agencies which could be approved. The interim policy provided that new agencies would be phased in over a three year period and resulted in the approval of 23 Certificates of Need between May 15, 1986 and December 1986. This interim policy was defended by the Respondent before the First District Court of Appeal in December 1986. During the Summer 1986, representatives of the Florida Association of Home Health Agencies (FAHHA) complained to the Governor's Office about the interim policy, contending that the interim policy put too many home health agencies in the field. As a result of FAHHA's complaints, meetings were held between members of the Governor's staff and representatives of the Department of Health and Rehabilitative Services to include Marta V. Hardy. As a result of these meetings, the Department abandoned its interim policy. Ms. Hardy was instructed that additional applications for home health agencies would have to be approved by her superiors. Medical or financial factors did not change during this period, which would warrant a change in policy. The Department changed its policy but did not publish any document rescinding Sharp's Memorandum. No notice was given to the public that the change in policy had occurred until after the second batching cycle of 1986, the one which contained the Petitioner's CON. Similarly, the Department did not notify the public that there was a need for additional services or agencies. Marta Hardy had instructed her staff not to issue any more home health agency CON's until a new methodology had been developed. The applicants were informed that the Department of Health and Rehabilitative Services had changed its interim policy and there was no numerical need methodology. Applicants were asked for an unlimited extension of time within which the Department could render a decision on their applications. In the absence of a rule on need, the Department required the applicants who refused to agree to an extension of time to demonstrate an unmet need based upon the broad statutory criteria found in Chapter 381, Florida Statutes. The Department of Health and Rehabilitative Services characterizes the procedure above as a free form action utilizing the statutory criteria found in Section 381.705, Florida Statutes. Using the free form procedure, one home health agency CON was granted in a county in which no existing service was being provided. The three existing Medicare-certified home health agencies in Subdistrict IB are: Northwest, Choctaw, and Okaloosa County Health Department (OCHD). OCHD is the home health agency of last resort for chronically ill patients in Okaloosa County. It renders services to those patients who would not be treated otherwise. It conducts few Medicare visits: 363 in 1985-86 and 225 Medicare visits in 1986-87. OCHD's costs to provide a home visit are high and the number of visits per patient is low. While rendering all classes of home health care, its services are limited, slow, and not competitive with the private agency in the County. It lacks the ability to perform high tech home care. Its program, which is directed by the Department of Health and Rehabilitative Services, is placing its current emphasis on maternal-child health. When OCHD is eliminated as a competitive element, Northwest is the only provider of Medicare-certified home health services in Okaloosa County and Choctaw is the only provider of medicare-certified home health care in Walton County. The market share of Northwest in Okaloosa County is 92 percent. It has provided home health services in Okaloosa County for nine years. Choctaw currently has a 100 percent market share in Walton County and has been the sole provider of home health services for over ten years. There are no alternative home health care providers in Walton County. Choctaw and Northwest provide all basic home health care services in their respective service areas. Neither Choctaw nor Northwest had provided technically innovative home health care services until the last few months when they added certain basic types of high tech care, such as infusion pumps. To the extent there has been an increase in the availability of such services, it appears to be a competitive response to the pending application of the Petitioner. The skills and services currently available in Walton and Okaloosa Counties in the area of home health are not state-of-the-art home health services which Home Care states it will provide. Home health agencies first must develop the capacity to provide sophisticated patient evaluation and high tech services if physicians are going to depend on and use these services when planning out-patient care. Petitioner is a durable medical equipment ("DME") company. This company has brought new technology to the Ft. Walton Beach area to include oxygen services, pulmonary rehabilitation, home dialysis, parenteral nutrition and hydration. A related company provides private duty nursing care to non- Medicare and non-Medicaid patients currently. Dr. Ehrman is also involved in Home Care Professionals. Home Care Professionals, a non-Medicare provider of home health care services and durable medical equipment, was developed to meet the needs of home care patients whose needs were not being met by current providers. Dr. Ehrman is already using computers to assist in the transmission of data from the patient's location to the doctor's location and to transmit and receive the results of lab tests. He plans and has allocated money to computerize Home Care. This will cut down on delays in transmitting and receiving information. Lab results and other patient information will be computerized. Dr. Ehrman plans to rigorously select his staff and provide to them in-service training in new procedures and high tech home health care. Home Care's nurses will be better trained than current providers' nurses. Home Care will assign a patient to one nurse. The Petitioner, Home Care, will provide a new, competitive alternative to the existing agencies which will provide incentive for all the agencies to improve their services and the quality of their care. Choctaw and Northwest staff their cases geographically east and west. Choctaw refers patients in the south end of Walton County to Northwest, and Northwest refers patients in the northern part of Okaloosa County to Choctaw. This practice, which is a technical violation of their DHRS licensing by county, is dictated by the geography of the service area and the natural and man-made obstacles, including Choctawhatchee Bay, I-10, and Eglin Air Force Base, which create geographical divisions which span both counties east and west while the counties run north and south. The largest and most rapidly growing population areas are in the southern portions of both counties. This is where the major acute care hospitals are located. The remaining population in these counties tends to be along the I-10/U.S 90 corridor where smaller hospitals are located. Patients which cannot be treated in these smaller hospitals have been referred historically to facilities and physicians in Pensacola, although this is changing as more patients are being sent to facilities and physicians in Ft. Walton Beach. Approval of this application is consistent with the boundaries of the subdistrict, will enhance competition encouraging the other providers to upgrade their services, and will tend to orient care along a north-south axis. The Petitioner would be he only provider licensed to serve both Walton and Okaloosa Counties which would be advantageous because it could legally staff on an east- west axis and avoid the problems created by the geographic division of Subdistrict IB. In determining the need for home health agencies in Subdistrict IB, a two year planning horizon was used. A two year planning horizon is reasonable. Two years from the Petitioner's filing date would be December 1988. Data for the periods ending July 1988 and January 1989 were used because the official population projections from the Governor's Office focus on July and January of each year. The two projected dates bracket December 1988, two years from the filing date. The population of elderly (65 and over) for Subdistrict IB is projected to be 16,868 for January 1988 and 17,350 for January 1989. The Medicare use rate the number of Medicare home health visits per elderly person in Florida for 1984 was multiplied by the projected elderly population to arrive at a projected number of visits. The number of visits projected to occur in July 1988 was 31,976, and 32,889 visits were projected for January 1989. An average of the two projections was used to estimate the number of projected visits in December 1988. Dr. Kolb, an expert in health planning, researched the optimal size of an agency. She determined that once an agency's visits reach the range of 6,000 to 9,000, economies of scale are achieved in which the fixed costs are spread sufficiently among all visits to make operations viable, and that once this scale of operations is reached, costs per visit become relatively static or are affected more by other factors. Her findings in this regard are consistent with the conclusions reached by HRS in adopting virtually the same criteria in the Sharp policy which it used to evaluate need in the first half of 1986. See Paragraph 15 above. The optimum size for an agency is riot wholly dependent upon ratio of costs per visit, but it is that size which keeps costs low, fosters healthy competition, sustains the quality and availability of service, encourages innovation, and meets the other statutory objectives. To determine the number of agencies needed, the projected number of visits was divided by 9,000, the optimal number of visits per agency, which showed a need for 3.6 agencies. Rounding up, this calculation shows a total need for four (4) agencies in the subdistrict in December 1988. There are three licensed and approved home health care agencies in Subdistrict IB. Subtracted from the four agencies needed in December 1988, one additional agency could be added. The addition of Home Care to the home health market will not significantly affect existing providers. Home Care projects it will deliver 3,800 visits in its first year of operation and 7,000 visits in its second year. A large percentage of those visits are attributable to population growth alone. If the state home health use rate of 1.9 is applied to the 4,588 population growth expected by 1990, an additional 8,717 home health visits will be generated. That growth alone will meet the volume of visits projected by Home Care. Home Care will do new procedures and will educate existing providers and physicians to the availability and desirability of using new services provided by Home Care. This will cause an increase in the local use rate. Approval of Home Care's application will increase the overall market for home health services. Dr. Ehrman is a highly trained and experienced physician. Dr. Ehrman has been instrumental in improving the nature and delivery of health care in his medical specialty and community. He has improved the way blood smears are done at the hospital lab and improved the administration of blood bank at the local hospital. He has organized and taught nurses about chemotherapy and developed a tumor board. He helped get radiological procedures improved. Dr. Ehrman has developed new and innovative practices in his office and has assisted patients in obtaining appropriate Medicare reimbursement for services and drugs. Northwest adduced evidence that it operates very close to its Medicare cost caps; however, Northwest pays out much of its revenue to related organizations in the form of management, consulting, and computer fees. For example, in the 1986 cost reporting period, Northwest paid $17,783 to related organizations. In 1985-86, Northwest provided 2,818 home health aide visits at a cost of $19.29 pea visit. In 1986-87, Northwest paid $76,849 to related organizations with shared members of their boards. Northwest provided 3,406 home health aide visits in 1986-87 at a cost of $28.95 per visit. These related organizations are for-profit entities. Open-ended management and administrative contracts with related organizations allow management to add expenses in order to reach the cost caps each year. If management and administrative fees were backed out of Northwest's "costs," it would be well below its cost caps. As Northwest's visits have increased, administrative, general, and other expenses also have increased (1985-86: $91,708; 1986-87: $198,635). However, the direct costs associated with providing the nursing care for those visits have decreased (1985-86: $89,281; 1986-87: $81,71). Thus, the increase in visits did not result in any overall cost- efficiencies or savings, but in an increase in money paid out as administrative expenses. There is no relationship between number of visits and cost per visit once an agency is beyond the volume needed to cover its minimal operating costs. An increase in number of visits does not necessarily result in lower costs per visit. An analysis of hospital utilization by Medicare reveals that the rate of use in District I is higher than both the Florida and national average. Analysis of the local nursing home use rate reveals it is 68 percent higher than the statewide nursing home use rate. This is in spite of the fact that Walton and Okaloosa Counties have more nursing home beds than other areas of the State and the beds in these counties are at 95 percent occupancy. Analysis of the home health use rate for Walton and Okaloosa Counties reveals that it is approximately 40 percent lower than the statewide use rate. Many nursing home placements and hospital admissions could be avoided if appropriate home health care were available and utilized. For example, a home health service could start antibiotics in the nursing home for patients who had received the medication before, rather than admit the patient to the hospital to start the treatment as is currently done. The proposed agency will not decrease the number of visits by existing agencies because of (1) the increase in population, (2) the shifts to home health care from acute care facilities and nursing homes, and (3) the increase in the types of home health care available. The application contains Home Care's projection of income and expenses for the first two years of operation. See Figure 7, Page 22 of the application. Evaluation of costs for a two year period shows that they are reasonable. The assumptions about payor mix, utilization projections, gross charges per visit type, salaries, inflation, depreciation, marketing, advertising, administrative expenses, bad debts/charity, travel expenses, depreciation, costs of medical supplies, and gross revenues made in the feasibility study were reasonable. The projections of revenue from visits and from medical supplies are reasonable and their sum constitutes gross revenue. Deductions for contractual allowances and bad debt/charity are reasonable and when deducted from gross revenue they determine net revenue. Dr. Kolb, an expert in health planning, supervised the preparation of the financial feasibility projections contained in the application. The methodology used by Dr. Kolb was reasonable, appropriate, and supported by the facts. Dr. Kolb conservatively estimated reimbursement to arrive at contractual allowances. Subsequent to her preparation of the pro forma and the filing of the application, the Legislature increased by 100 percent the amount Medicaid reimburses for home health services. Medicare has also subsequently increased its cost services. This increases the range of reimbursement available to the Petitioner and makes Dr. Kolb's predictions of financial success more viable. The amount of $22,600 is reasonable for the cost of this project. Equipment costs of $7,600 include office equipment and the lease- purchase of a computer terminal. The computer will be used for billing and for tracking patient problems. The depreciation expense is derived from an assumption of five years' depreciation on $7,600 worth of office equipment, When deductions from revenue are subtracted from gross revenue, net revenue is approximately $284,700 in the second year. Home Care has the capital to fund this project. Individual expenses on the expense column on the pro forma include salaries, contract services, administrative expenses, transportation, marketing and advertising, medical supplies, and depreciation. Administrative salaries and benefits are based on the assumption that in the first year there will be three administrative full time equivalents ("FTE"): an administrator, a nurse supervisor, and a clerical person. In the second year, this will increase to three and a half FTE's. The salaries for these positions in year two are $28,350 for the administrator, $22,050 for the nurse supervisor, and $28,800 for one and a half clerical personnel. In addition, an 18 percent fringe benefit figure is computed. Salary assumptions are based on area wage levels. Both the salary assumptions and the number of FTE's and salaries are reasonable. A breakdown of total per visit costs is depicted on HCA X-26. The expenses for contract visits represent the cost per visit in each of the listed categories. The contract rates in year one are: home health aide - $8.25; speech pathologist - $30.00; medical/social worker - $25.00; occupational therapist - $30.00; skilled nurse - $13.75; and physical therapist - $30.00. Medical supplies are assumed to be $1.00 per visit in the rest year and are inflated by 5 percent in the second year. This assumption is reasonable. Although not required, Petitioner has allocated funds for advertising and marketing which are not allowable expenses in computing reimbursable expenses; however, this will help in informing the public and medical professionals about the availability of home health services. The transportation expense is based on $.21 per mile which is reimbursed to employees. This is a reasonable assumption. Administrative expenses include rent ($12,000), telephone ($4,800), insurance ($5,000), postage ($2,000), office supplies ($3,000), legal and accounting fees ($4,000), dues ($500) , and licenses ($500). Most expense items are inflated 5 percent for the second year. The expense and inflation assumptions are reasonable. In order to test the reasonableness of the assumptions contained in the pro forma, Dr. Kolb compared the projected costs in the second year to Medicare cost limitations. Home Care's projections are 28 percent below the Medicare cost limits for 1987. Home Care could have $78,000 more in expense and still be below its Medicare cost limits. In both his private office practice and in his DME company, Dr. Ehrman tries to ensure that underserved groups receive medical services. Although there is a large medically indigent population in the area Dr. Ehrman serves, he does no financial screening in his office. Dr. Ehrman is a participating provider in Medicare. This means that he has agreed in advance to accept Medicare assignment for his services. Dr. Ehrman is also a Medicaid provider. Three to five percent of his patients are Medicaid. The assumption that Home Care will have the same financial policies which are reflected in Dr. Ehrman's practice is reasonable. The assumption that Home Care will provide three percent Medicaid and three percent indigent home health visits is reasonable. Home Care's project is financially feasible on both an immediate and long term basis.
Recommendation Having determined, based upon the facts adduced at hearing, that there is a need for another home health care agency and that the applicant meets the statutory criteria, it is RECOMMENDED that the Department of Health and Rehabilitative Services approve Certificate of Need Number 4911. DONE and ORDERED this 1st day of July, 1988, in Tallahassee, Florida. STEPHEN F. DEAN 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 1st day of July, 1988.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner J & J seeks a Certificate of Need to establish a new home health agency in the Tampa Bay area to serve the residents of Hillsborough, Pinellas, Pasco, and Manatee Counties for an estimated project cost of $85,000. All necessary funding for the project is to be supplied by petitioner's parent, Johnson and Johnson. It is the expressed intent of J & J to provide only specialized patient services in the home to those patients who are acutely ill and in need of intensive or intermediate level clinical services in lieu of hospitalization. J & J intends to serve early hospital discharge patients who require more than single follow-up or maintenance care after discharge. It does not seek to provide maintenance-level care to patients, and would refer such patients to another home health agency. J & J does not intend to become a part of hospital rotation lists utilized to refer the less acutely ill homebound patient to a home health agency. J & J proposes to hire full-time clinical specialty certified registered nurses to provide services to ten general categories of patients. The specific diagnoses or treatment modalities which J & J expects to provide include cerebrovascular accident (CVA or stroke) with and without paralysis, oncology and chemotherapy, hyperalimentation, enteral therapy, respiratory therapy, intravenous antibiotics, other nutritional services and neuro-ortho. These proposed services are intended to be a replacement for more expensive in- hospital health care. J & J intends to accept only those patients within the above classifications who are sick enough to require home health care in lieu of hospitalization, and not those who can be treated strictly on an outpatient basis. The key factor for acceptance of a patient by J & J is not the diagnosis of the patient, but is the patient's acuity level. J & J has an ongoing research program to develop additional clinical specialty home health services based upon physician input, technical developments end patient needs. One of its reasons for establishing a home health agency in the Tampa Bay area is because J & J's national corporate headquarters are to be located in Tampa and this proximity would facilitate its research and development efforts. J & J has staffed its existing home health agencies in Texas and California, and proposes to staff its Tampa agency, with full-time nurses with acute care experience. Orientation continuing education programs for nurses are planned. The nurses are to be either certified as clinical specialists or develop their clinical expertise through J & J's own internal privileging program. The proposed new agency, as do the existing Texas and California agencies, will have its own pharmacist, therapists, dieticians, social workers and certified home health aides. It will also operate its own pharmacy and will provide and deliver durable medical equipment and supplies. Nurses will be on duty and/or on call 24 hours a day, seven days a week. As noted above,' J & J seeks to serve those patients who require special expertise in their care. Planning for discharge will begin during the patient's hospitalization and there will be a patient screening process before a patient is accepted. An assessment of the patient's home and family life will be made to determine that conditions are suitable for treatment and recovery at home. A registered nurse is to be assigned as the "primary nurse" to coordinate the patient's plan of care with the clinical specialist, therapists and physician. The patient's physician is to be given a weekly report of the patient's progress. An elaborate charting and recordkeeping system is anticipated and is provided at J & J's existing home health agencies. A prospective, con current and retrospective quality assurance program is to be instituted which involves a quarterly internal review and a utilization review by physicians. Based upon statistics which illustrate that 26,800 patients for every one million population group are discharged annually in the ten classifications which J & J seeks to serve, J & J predicts it can treat 1,430 patients per year in the four- county area. These figures are based on nationwide statistics and are not site-specific to the four-county area. J & J presently owns and operates three existing agencies in Texas and California. Certificates of need for home health agencies are not required in those states. The Dallas/Ft. Worth center opened on April 4, 1983, and had, as of the time of the hearing in this matter, a daily patient census of 70. The Houston center opened on April 11, 1983, and had a daily patient census of 60. The daily patient census at the Los Angeles center, which opened on July 6, 1983, was 60. These existing agencies also accept only specialty care patients who can receive services in lieu of hospitalization. The Texas centers have rejected as many as 47 percent of their referrals because the patients either did not meet the medical criteria for the J & J system, because of their home situation or, in some instances, because of financial reasons. In California, the charge for a visit by a registered nurse is $75.00, while the charge for a therapist visit is $65.00. The charges in both Texas centers are, and the proposed Florida center will be, $65.00 for a registered nurse's visit and $55.00 for a therapist's visit. All these charges are higher than the current cap or limit for Medicare reimbursement. The Petitioner's projected cost for an R.N. visit is $52.40. This cost is higher than the current Medicare cost cap for skilled nursing services. After the Florida four-county agency becomes fully operational, J & J projects that only 23 percent of the patients it serves will be Medicare patients. It is anticipated that the remaining patients will be primarily private pay, privately insured or self-insured patients who will be attracted to the J & J program because of its cost-savings potential. The existing operations in Texas and California serve 60 to 70 percent Medicare patients. These percentages are expected to decline due to J & J's efforts to educate and convince private reimbursers to use J & J's services in lieu of hospitalization. A large public relations firm has been retained by J & J to communicate with insurers end the medical community regarding the benefits of clinical, specialized home health care, especially as a replacement for hospital care. The patient mix of most of the existing licensed home health agencies in the four-county area is in excess of 95 percent Medicare. A license and certificate of need are only required under Florida law for home health agencies which serve Medicare patients. At least some of the existing agencies have accordingly severed their operations into those which serve and those which do not serve the Medicare patient. J & J does not believe it would be feasible to open its four-county agency as an unlicensed and uncertificated agency to serve only private pay patients because it believes that licensure will be helpful in convincing private insurers to use its agency. Also, a patient may begin his treatment as a non-Medicare patient, but bay later qualify for such benefits, and J & J desires to provide a continuity of treatment. Although J & J's proposed charges and costs are higher then the Medicare reimbursement system currently allows, J & J will attempt to obtain a waiver of the Medicare cap by demonstrating the highly specialized nature of the services it provides and by illustrating that J & J's home health care is in lieu of more expensive hospital care. Although J & J does not plan to serve all patients regardless of their ability to pay, it has and will continue to provide care to indigent and medically indigent patients. Approximately 20 such patients have been served in the existing agencies in Texas and California. There are approximately thirteen licensed home health agencies in Hillsborough, Pinellas, Pasco end Manatee Counties. Eleven of these agencies are members of FAHHA, a voluntary association whose membership is comprised of home health agencies licensed by the State of Florida. Though some of the existing agencies have expanded their operations by the opening of new submits in other areas, there have been no Certificates of Need issued to any new home health agency in the four-county area since 1978. The intervenor Gulf Coast provides home health services in Pinellas, Pasco and Hillsborough Counties, as well as Hernando County, through six different offices. In addition to providing maintenance and homemaker services to its patients, Gulf Coast provides most, if not all, the same specialty services proposed by J & J. Their patients include CVA patients with and without paralysis, oncology patients of which two are receiving I.V. chemotherapy at home and several hyperalimentation patients. Gulf Coast provides enteral and respiratory therapy, as well as I.V. antibiotic services. Its staff, which includes approximately 90 professionals, 140 ancillary staff and 50 contract personnel, includes socialists in the areas of pulmonary nursing, enterostomal therapy, oncology and psychiatric nursing. Gulf Coast has recently started an I.V. certification program for its nurses. Approximately one-third of the nurses have bad a year or more of prior experience in critical care units. A registered nurse is on-call 24 hours a day. Quality control assurances include monthly utilization review, both in-house and by a physician. Gulf Coast makes arrangements with local vendors and suppliers for all durable medical equipment and pharmaceutical supplies needed by its patients. It has experienced an annual growth in its average daily census of between 15 and 20 percent, and its administrators feel that it has the capacity to expand its services, even with its present staff, in the event of greater demand for the more specialty-type services proposed by J & J. Gulf Coast's current Medicare cost cap for registered nursing services is approximately $48 to $50 per visit. Its actual costs for such services, for which it is reimbursed, are approximately $37 or $38 per visit. The Intervenor Manasota is one of six licensed home health agencies in Manatee County. All its patients are Medicare patients, and some 70 percent of its referrals are hospital referrals from the two existing hospitals in Manatee County-- Manatee Memorial Hospital and Blake Hospital. In addition to maintenance level and homemaker services, Manasota has provided more specialized services to patients including nasogastric, gastrostomy, stomal, enterostomal and I.V. antibiotic therapy. It has the staff and capacity to provide chemotherapy and hyperalimentation, but has not bed any physician request for those services for their patients. Manasota has experienced a significant decline in the number of new patients it has admitted end in its average daily census. This appears to be related to the reduction in the number of discharges from Manatee Memorial Hospital and the fact that Blake Hospital owns its own home health agency. The decrease in patient census et Manasota has resulted in an increase in its cost per visit from $32.50 to $41.00 per visit. The Medicare cost cap for Manasota is approximately $44.30. Manasota has the capacity to expand to serve an increased number of Medicare patients. Blake Home Health is affiliated with Blake Hospital in Manatee County, and receives 75 percent of its referrals therefrom. It is the policy of Blake Hospital to refer all discharged hospital patients who require home health care to Blake Home Health unless the attending physician has specifically designated a different agency. Blake is available to serve its patients 24 hours a day end has access to the hospital pharmacy. It presently renders services in the areas of enteral, stomal end parenteral therapy and handles cerebrovescular cases. While nurses are available to Blake Home Health to perform I.V. antibiotic therapy and chemotherapy, Blake has never been requested to perform such services. Independent Home Health is an existing licensed home health agency located in Clearwater, and was recently purchased by Morton Plant Hospital. Independent presently provides and has performed all the specialized, home health services proposed by J & J. It operates 24 hours a day, with a nurse on call after 5:00 p.m. Its quality assurance program involves a monthly nursing audit and quarterly utilization review by a physician. Its charge for nursing services is $40 per visit. Independent has the ability to expand to provide further services. Global Home Health Services, Inc. has five offices in the four-county area, with a total average daily census of approximately 400. Global performs almost all of the specialized services proposed by J & J and has never had a request for services in those categories that it was unable to fulfill. The number of patients receiving home chemotherapy and hyperalimentation is very few, due to lack of demand for such services. It is open seven days a week, 24 hours a day. Global charges $47.00 per nursing visit, and makes all arrangements for the ordering and delivery of supplies, durable medical equipment and pharmaceuticals. Global has the ability, even with its present staff to serve 20 or 305 more patients and to expand the range of services it presently provides. The Visiting Nurses Association of Hillsborough County (VNA) is a public non-profit home health agency that serves any patient regardless of age, race or ability to pay. It provides all the services which J & J proposes to offer, although only about 3 percent of its total patients receive these specialized services. The VNA has its own continuing education programs and also conducts training programs for other home health agencies, specifically in the areas of I.V. chemotherapy and I.V. antibiotics. VNA offers 24-hour services, and has the ability and capacity to expand to meet any increased need or demand for home health services. Its cost per nursing visit is about $29, and it charges $35 per visit. Its average patient census 1as increased from 212 in 1980 to 720 in 1983. The existing agencies rely heavily on referrals from hospital rotation lists. None of the existing agencies about which evidence was adduced at the hearing have their own pharmacy or durable medical equipment or supply services. Many agencies, if not most, use some independent contractor, therapists on an as-needed basis. While each of the existing agencies experienced a growth in their average daily census in the Veers between 1980 and 1983, some agencies experienced a slight decrease in the number of patients and visits during the six months immediately prior to the hearing. Increased home health utilization in the future is suggested due to the new Medicare reimbursement system for hospitals. This system is based upon diagnostic-related groups (DRG's) and the amount of reimbursement is based upon the average length of stay for a given diagnosis, regardless of the patient's actual length of stay. The former system reimbursed hospitals for their actual costs of treating a patient. The DRG system will provide hospitals with the financial incentive to discharge patients at the earliest possible point. It can be expected that demand for home health care services for more acutely ill early discharge patients will increase. Officials responsible for discharging patients from Tampa General Hospital and St. Joseph's Hospital in Tampa were of the opinion that the existing home health agencies in Hillsborough County were doing a fine job in providing follow-up care of both chronically ill patients end those patients who are acutely ill with a good prognosis. While these persons were in favor of the adequate provision of more advanced and intensive home health care, they believe that their current needs are being met by the existing agencies.
The Issue The issues presented concern the question of the Petitioner's entitlement to amend its license to expand its geographic service area to include Hillsborough and Manatee Counties with a base of operation being its existing offices in Pinellas County.
Findings Of Fact Petitioner is a home health care provider in Florida. Subsequent to April 30, 1976, it applied for and was granted a statement of need to serve patients in Pinellas County, Florida. Statement of Need No. 450 was issued on July 13, 1976. At that time, Global was not requesting opportunities to offer service for patients in other counties within the district, those outlying counties being Pasco, Hillsborough and Manatee. Consequently, the focus of the review related to Pinellas County, notwithstanding the fact that the reviewing agency, Florida West Coast Health Planning Council, Inc. had as its responsibility consideration of health care needs in the aforementioned four counties. Although the license that was granted to the Petitioner as a result of the Statement of Need did not on its face limit the geographic area of service, the license opportunity only pertained to Pinellas County. The license from the Respondent for the Pinellas service was issued in September 1976, following the grant of the Statement of Need by the local HSA. Petitioner's Exhibits No. 22 and No. 41, admitted into evidence describe this Statement of Need review process and evidence the fact that the review only encompassed Pinellas County. In 1977, Petitioner indicated to the Respondent that it had an interest in serving patients in Pasco County, on the basis of a perceived need for home health care services for those patients. At about this time, Petitioner also expressed an interest in serving patients in Hillsborough and Manatee counties. (The Petitioner did not provide home health services in Manatee and Hillsborough Counties prior to April 30, 1976, nor did it have a Medicare Provider Number issued by the United States Department of Health and Human Services, formerly Health, Education and Welfare, prior to that date). Out of this process litigation occurred and in the course of the conflict, the request to serve patients in Hillsborough and Manatee Counties was dropped. The effect of the Petitioner's dismissal of its request to operate in Manatee and Hillsborough Counties did not foreclose future efforts to expand its service to Hillsborough and Manatee patients based upon the outcome of the 1977-78 proceeding nor did that proceeding establish the right of the Petitioner to serve the Hillsborough and Manatee patients. The outcome of the litigation was an expansion of the Petitioner's license opportunity to include patients in Pasco County, without the necessity to obtain a Certificate of Need to operate in Pasco County. The expansion of services into Pasco County was not in keeping with the Statement of Need which had been issued for Pinellas County. The reason for granting the license in Pasco County was premised upon the Petitioner's reliance on specific permission which had been given by the Respondent to the Petitioner to operate in Pasco County, which permission was later disclaimed and finally reinstated by a formal Section 120.57(1), Florida Statutes, hearing. In essence, the license was afforded Petitioner upon the theory of equitable estoppel. Intervenor's composite Exhibit No. 2, admitted into evidence contains the Recommended Order and Final Order related to the Pasco County expansion of services. Subsequent to the expansion referred to in the previous paragraph, Global requested recognition of two subunits to be placed in Pasco County. One was to be located in the New Port Richey/Port Richey area and the other was to be located in the Zephyrhills/Dade City area. The application may be found as Respondent's exhibit No. 2, admitted into evidence. This expansion was the subject of Certificate of Need review both at the local level by the Florida Gulf Health Systems Agency and by the Respondent in its office of Community Medical Facilities. The State Agency Action Report related to this application may be found as Respondent's Exhibit No. 4, admitted into evidence and contains review comments for all four counties in the related health service area, namely Pinellas, Pasco, Manatee and Hillsborough; however, the primary emphasis of the project review pertained to Pasco and Pinellas Counties. Following review, proposed agency action in the way of the issuance of a Certificate of Need was to the effect that the two subunits should be granted Certificate of Need No. 2072. A copy of that proposed agency action (certificate) may be found as Respondent's Exhibit No. 5, admitted into evidence. This proposed agency action granting a Certificate of Need for two subunits was challenged by the present Intervenor leading to a joint stipulation for settlement between the present parties to this action related to the Pasco County subunits. A copy of the joint stipulation may be found in Petitioner's Exhibit No. 25. That joint stipulation was accepted by the Secretary of the Department of Health and Rehabilitative Services through the entry of a final order on April 25, 1983, and per the order the Petitioner was left with one subunit, Certificate of Need No. 2072 for a Zephyrhills office in Pasco County. The subunit Certificate of Need did not contemplate service expansion into Manatee and and Hillsborough Counties from the remaining office. Independent of Petitioner's efforts to seek the subunit recognition, it determined to expand its service area into Hillsborough and Manatee Counties. In particular, these plans began to take shape in late 1982. The intended expansion does not entail the establishment of any offices or other plant, separate and apart from those in Pinellas and Pasco Counties as recognized with the issuance of the initial Statement of Need 450 and the Certificate of Need 2072, respectively. It is intended that Global provide the services in Hillsborough and Manatee Counties from its existing offices in Pinellas County. In the present hearing, the Petitioner has not indicated an intention to use the Pasco/Zephyrhills offices as the base of its operations in Hillsborough and Manatee Counties. Petitioner holds the opinion that the expansion into Hillsborough and Manatee Counties from its Pinellas County parent home health agency offices would not require Certificate of Need review. Consequently, it believes that it would be entitled to make that expansion simply by complying with other license requirements related to such expansion. In the alternative, Global urges that should a Certificate of Need be necessary before the expansion of service into the new counties, review has been performed upon the occasion of the issuance of the Statement of Need 450 and/or the issuance of the Certificate of Need No. 2072 for the subunit in Pasco County. Global also believes it is entitled to an amendment of its license allowing the expansion based upon its impression that similar permission has been granted other home health providers. After requesting provision of appropriate forms to accomplish the amendment to its license to allow expansion of services into Hillsborough and Manatee, there followed a series of letters between the parties, to include preliminary comments by the Respondent's staff members, some favorable to Petitioner's position, leading to an April 29, 1983, letter from Jay Kassack, Director, Office of Licensure and Certification, found as Petitioner's Exhibit No. 26, which advised the Petitioner that it was denied its expansion of service based upon failure to show evidence of compliance with Certificate of Need requirements set forth in Chapter 381, Florida Statutes, and Rule 10-5, Florida Administrative Code, and a subsequent letter of May 6, 1983, from Thomas J. Konrad, Administrator, Community Medical Facilities, Office of Health Planning and Development, found as Petitioner's Exhibit No. 29, which also denied the request for expansion based upon the inability to utilize the Statement of Need as a basis for expansion into Hillsborough and Manatee Counties, in that criteria of need had not been applied to Hillsborough and Manatee Counties by the Health Systems Agency when it reviewed and issued the 1976 Statement of Need. In the face of the denial of its request for licensure, the Petitioner sought and was provided this formal hearing. Based upon the belief that the necessary permission would be given to expand its service area into Hillsborough and Manatee Counties but prior to final decision by the agency on that request, Petitioner hired six additional nurses and began the development of training aids and other related matters dealing with the expansion of its service area at a cost of approximately $60,000. Those nurses could not be used to attend other patients already being served by the Petitioner. The agency had not promised that the license request would be granted and Global's understanding of the opportunities afforded by its existing license and Statement of Need and Certificate of Need recognition, together with the history of other applicants making similar requests for expansion did not entitle the Petitioner to undertake this development of services and expect to be granted permission to expand upon a theory of estoppel. In pursuing its hiring practices prior to the opportunity for the agency to speak finally to the request for expansion, Global did so at its own risk and did so not based upon sufficiently specific facts from the Department related to this application request to cause a change in its position after relying on those representations. The impetus for changing its position was provided by the applicant premised upon its presumptions related to the agency's response to the request for expansion, without allowing the agency the opportunity to review and announce its decision in this case. This circumstance is as contrasted with the 1977-78 case in which Global was allowed to expand its operations into Pasco County based upon the agency's initial action of condoning operations in Pasco County and then attempting to retract that permission. On this occasion, the agency has never countenanced the expansion of services into Manatee and Hillsborough Counties. From Respondent's point of view, the license denial is premised upon the use of an item referred to as "home health agency review matrix," a copy of which is found as Petitioner's Exhibit No. 1, admitted into evidence. In particular, reference is made to that portion related to expansion of a service area based upon the use of a Statement of Need. The language of that section says, "HSA Statement of Need remains valid. May expand HHA only in those counties in which criteria of need were applied by HSA." In essence, as indicated in the May 6, 1983, correspondence from Konrad, Petitioner's Exhibit No. 29, the Department was of the opinion that the criteria of need and the recognition of Petitioner by issuance of a Statement of Need No. 450, pertained only to Pinellas County. That perception is correct. A review of the record submitted to include the exhibits and testimony leads to the conclusion the criteria of need were not applied to examine counties other than Pinellas County when the Statement of Need was issued to the Petitioner. Therefore, according to the Department, Petitioner may not expand into Hillsborough and Manatee Counties without further Certificate of Need review related to Hillsborough and Manatee Counties. The Department began to use the matrix in March 1983 in its efforts to create an overview of its responsibilities in considering Certificates of Need and licensure related to home health care agencies. At the time of the final hearing in the instant case, the matrix served as a guide for considering requests to establish new home health agencies, to expand service areas and to establish subunits, depending upon the prior history of the home health agency as being "grandfathered" as a holder of a Medicare Provider Number from HEW prior to April 30, 1976; the holder of Statement of Need issued between 1975 and July 1977 or the holder of a Certificate of Need. The matrix assumes that the expansion of service area is an event requiring Certificate of Need review unless in the Statement of Need situation, as described, review criteria of need have been applied in the area where the home health agency intends its expansion. By contrast, in the instance of the grant of an original Certificate of Need for a new home health agency, there is a presumption that review has been made in all counties prior to the issuance of the Certificate of Need, therefore expansion may be made from that original facility into counties within that service area without the necessity of seeking a further Certificate of Need before offering services in outlying counties within the service area which were not being served before. The matrix makes no specific provision for the expansion of services from a subunit such as the Pasco County subunit held by the Petitioner. That question is not at issue in that the Petitioner does not seek expansion from its Pasco County subunit, so it is not necessary to address whether such expansion is allowed in keeping with the recognition of the subunit. The four county review involved in that recognition and grant of Certificate of Need and amended license, may not serve the secondary purpose of substituting for the criteria of need review contemplated in the Statement of Need process wherein criteria of need had to be examined in the subject counties in order to allow an expansion without the benefit of a Certificate of Need. Recognition of a subunit by the grant of a Certificate of Need is acceptance of a home health agency's base of operation through a semiautonomous entity and each successive subunit, according to the matrix, must undergo Certificate of Need review. Having refused to allow the recognition by issuance of a Certificate of Need for one subunit to form the basis for recognizing an additional subunit in the same county, notwithstanding the area wide review of criteria of need involved with the initial subunit, as expressed in the matrix, it follows that the subunit recognition of the Petitioner's Pasco County Operation not only may not form the basis of expansion, even if offered for that purpose, but may not serve to establish substituted data related to criteria of need in Hillsborough and Manatee Counties that was not forthcoming in the original review for the facility in Pinellas County at the time of the issuance of the Statement of Need. Assuming that the expansion of service from the original home health agency facility in Pinellas County as recognized through the Statement of Need process, without the establishment of a new home health agency, or subunit or fixed plant, by providing home health services in the residence of the patients in Hillsborough and Manatee Counties as delivered by employees of the petitioner is an activity which must undergo Certificate of Need review, the Department's utilization of the matrix to insure that a project undergo examination through the use of criteria of need is reasonable. Recognition of this treatment of the issue of review takes into account the distinction between the presumptions related to the review process in the Certificate of Need analysis by the Department in which full service area review for all counties is contemplated as contrasted with the possibility that the Statement of Need process by the local Health Planning Agency may have been accomplished on less than a full service area review, as was the situation with Global. Given this distinction, the matrix is not found to be at odds with the Legal Opinion 82-2, authored by Staff Attorney, James M. Barclay, dated March 9, 1982, in which significance is placed upon the fact that in the Certificate of Need review process health service area wide review is made and therefore expansion within the service area from the original facility is acceptable given the area wide review related to the proposed home health agency. The memorandum and matrix pertaining to Certificates of Need are consistent. A copy of the memorandum is found as Petitioner's Exhibit No. 3, admitted into evidence. The memorandum does not, from a review of its language and statement of applicable statutes and rules, address the Statement of Need circumstance. Petitioner has alluded to the agency's alleged inconsistent treatment of its request for expansion and amendment to its license allowing services to be offered in Manatee and Hillsborough Counties from its Pinellas County facility, compared to other home health agencies. Materials related to those other requests may be found in Petitioner's Exhibit Nos. 34-39, 41 and 42, admitted into evidence. All of those requests by home health agencies are consistent with the present denial, with the exception of Roberts Nursing. This consistency pertains to the fact that certain expansions were allowed due to special circumstances such as the need to provide service to patients in DeSoto County based upon the abandonment of patients by an ongoing health care provider, special circumstances related to certain counties in North Florida that were being served by Georgia health care providers and the fact that expansion in some instances was based upon the existence of a Certificate of Need as opposed to Statement of Need. The Roberts' situation is either the product of a mistake or is contrary to the present process of analysis of requests for expansions on the basis of Statements of Need. Petitioner has not shown that the expansion without Certificate of Need made by Roberts was pursuant to a contrary policy choice that was applied to Petitioner. On the other hand, there is some testimony that the Roberts' situation was possibly allowed based upon the belief that Roberts was expanded on the basis of a Certificate of Need as opposed to a Statement of Need, when in fact Roberts, like Global, held only a Statement of Need. Whatever the explanation, the treatment of the Roberts' request does not cause the grant of a license to Petitioner. One of the other home health care providers who sought expansion opportunities as found in Petitioner's Exhibit No. 38, admitted into evidence, was Independent Home Health Services, Inc., which was denied its opportunity based upon the agency's assertion that the Statement of Need originally granted that provider only looked at need for Pinellas County and expansion into Pasco County would require a Certificate of Need. Finally, Global has not asserted its entitlement to licensure based upon proof that it has satisfactorily addressed the criteria of need dealing with home health care offered in Hillsborough and Manatee Counties as such, related to a presentation separate and apart from the review process that may have been pursued prior to the present controversy. If it is the intention of the Petitioner to seek a license based upon satisfactorily addressing criteria of need, in substance, related to the offering of services in Hillsborough and Manatee Counties, that showing has not been successfully made on this occasion.
The Issue Whether the applications for certificate of need numbers 8380, 8381, 8382 and 8383, filed by Petitioners RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., ("IHS of Florida,") and Putnam Home Health Services, Inc., meet, on balance, the statutory and rule criteria required for approval?
Findings Of Fact Care First The Proposal Care First, the holder of a non-Medicare-certified home health agency license, was established in March of 1996. Owned by Mr. Freddie L. Franklin, Care First is the successor to another non-Medicare-certified home health agency also owned by Mr. Franklin: D. G. Anthony Home Health Agency ("D. G. Anthony"). Established in May of 1995, D. G. Anthony provided over 10,000 visits in its first 10 months of operation mostly in Leon and Wakulla Counties, pursuant to a contract with Calhoun-Liberty Hospital Association, Inc. Very few of the 10,000 patients were referred to D. G. Anthony by Calhoun-Liberty; they became D. G. Anthony's patients through community-based networks, including physicians, created through the efforts of Mr. Franklin and D. G. Anthony itself. D. G. Anthony was dissolved in 1996. Both its patient census and its staff of 45 were absorbed by Care First. D. G. Anthony's contract with Calhoun-Liberty was substantially assumed by Care First so that it provided service to Medicare patients as Calhoun-Liberty's subcontractor. From the point of view of the federal government, the Medicare patients served by Care First were Calhoun-Liberty's patients, even those who had not been referred to Care First by Calhoun Liberty and who had been referred from other community sources. Care First, therefore, was simply a sub- contractor providing the services on Calhoun-Liberty's behalf. The contract was terminated effective December 1, 1996. Calhoun-Liberty was free to terminate Care First with 30 days notice, a peril that motivated Mr. Franklin to seek the CON applied for in this proceeding. With the termination of the contract, Care First ceased serving Medicare patients, "because Mr. Franklin did not want to enter into another subcontractor arrangement because of all the issues and problems," (Tr. 934,) associated with such an arrangement. Mr. Franklin is involved with nursing homes as the administrator at Miracle Hill Nursing Home in Tallahassee. He is an owner of Wakulla Manor Nursing Home in Wakulla County, and he owns a 24 bed CLF, Greenlin Villa, also in Wakulla County. Miracle Hill has the highest Medicaid utilization of any nursing home in District 2. Both Miracle Hill and Wakulla Manor are superior rated facilities. On the strength of Mr. Franklin's extensive experience with community-based organizations and health care services, as well as Care First's succession to D. G. Anthony and other historical information and data. Care First decided to proceed with its application. In the application, Care First proposes to establish a home health agency that, at first, will serve primarily Franklin, Gadsden, Jefferson, Leon, Liberty and Wakulla Counties. It plans to expand into Madison and Taylor Counties in its second year of operation. Five of these eight counties have high levels of poverty; six of the eight are very rural, with the population spread widely throughout the county. Ninety-six percent of Care First's patients are over age Minority owned, approximately 65% of the patients are members of minorities. Many of the patients live in rural areas and are Medicaid recipients or are uninsured low income persons who do not qualify for Medicaid but cannot afford home health care. Since it will be serving the same patient base as a Medicare-certified agency, Care First has committed to the provision of 7% of its visits to Medicaid patients and 1% of its visits to patients requiring charity/uncompensated care. Care First projects 18,080 visits in its first year and 29,070 in its second year. Care First will promote efficiency through the use of a case management approach. Each patient will be assigned a case manager who will act as the patient advocate to provide care required and to identify and assist the patient with access to other "quality of life" enhancing services. Care First proposes an appropriate mix of services, including skilled nursing, physical therapy, speech and language therapy, occupational therapy, home health aide services and social services. Care First estimates its total project cost at $25,808. Of this amount, $2,000 is indicated as "start-up cost", with nothing allocated to salaries. Care First indicates no "capital projects" other than its proposal for the home health agency in District 2. Care First's proposal would be funded from a $60,000 bank line of credit. Projected Utilization Potential patients will be able to gain access to Care First through several avenues, including physician referral, hospital referral, nursing home discharge, assisted living referrals from community agencies and organizations such as Big Bend Hospice and through private referral. In addition, there are several natural linkages to the community for Care First. Wakulla Manor and Miracle nursing facilities offer Care First's services to discharged residents in need. Very often, residents and families choose Mr. Franklin's agency because they are familiar with him, staff or the quality of care provided. Residents of Greenlin Villa, owned by Mr. Franklin, frequently chose Care First when in need of home health agency services. Mr. Franklin's civic, church, and community involvement is impressive. He is president of the Florida Health Care Association, chairman of the board of the Tallahassee Urban League, superintendent of the Wakulla County Union Church Group, and serves on the advisory board for the Allied Health Department for Florida A&M University. In the past, he has served on the Board of Trustees of Tallahassee Community College. He was accepted as an expert in long-term care administration in this proceeding based in part on his service on the Governor's Long Term Care Commission. Miracle Hill has held a "Superior" licensure rating for the last ten consecutive years. It is the highest rating awarded by the AHCA licensure office and is intended to blazon the high quality of care provided by the facility. Although reported through Calhoun-Liberty, very few of D. Anthony's and Care First's past referrals have been generated through that affiliation. Rather, they have come through community contacts and getting the referrals from "talking with physicians," (Tr. 922), in Tallahassee and the surrounding areas, many of whom Mr. Franklin has gotten to know through his post as Administrator of Miracle Hill Nursing Home. By far, it is through physician referrals that Care First receives most of its patients. Care First's physician referral list includes 47 doctors who referred patients to D. G. Anthony since May, 1995. These doctors practice in urban areas and some have rural clinic offices which they staff on certain days of the week. Physicians are willing to refer patients to Care First because of the quality of care which has been provided by Care First, as well as the reputation of its owners. The Care First application included letters of support from eight physicians who have referred patients to Care First in the past and state that they will continue to support Care First with referrals in the future. Among the letters included are those from Dr. Earl Britt, a practitioner of internal medicine and cardiology in Tallahassee, and Dr. Joseph Webster, who practices internal medicine and gastroenterolgy in Tallahassee. Many of the patients of these two physicians are elderly. Dr. Britt's patients often have chronic hypertension or heart disease, are diabetic or suffer strokes. These two physicians provided over half the total number of patient referrals to D.B. Anthony and Care First. Dr. Britt and Dr. Webster established through testimony that Freddie Franklin and Care First have an excellent reputation for provision of quality of care and enjoy significant support among physicians within the service area. Moreover, Dr. Britt, although based in Tallahassee, stressed the importance of Care First's proven ability to provide home health services in the rural setting both from the standpoint of understanding the needs of the rural patient and from being able to travel over rural terrain in order to deliver services. (Tr. 1151, 1152, 1154). Approximately 11,500 visits were performed by D. G. Anthony staff from the period of May 1995, through April 1996, before they became the staff of Care First. Since the agency has established a presence in the district and has physician and other referral mechanisms in place, it is reasonable to project that Care First will continue to grow and will experience between 18,000 and 20,000 visits in its first year and 28,000 to 31,000 visits in year two as a Medicare-certified home health agency. These projections stem from the historical and very recent monthly growth of D. G. Anthony, as well as demand it is experiencing from Franklin and Jefferson Counties, two counties it does not serve regularly at present but plans to serve regularly in the future. The reasonableness of Care First's projections is bolstered by the conservative number of visits per patient the projections assume, 35, when typically Medicare-certified agencies average at least 35 visits and as many as 60 visits per patient. Care First's utilization projections are reasonable. It enjoys an excellent reputation for quality of care and ability to deliver services. Together with its predecessor, D. G. Anthony, it has a proven track record and has benefited from a referral network that remains in place. These factors, together with the conservative assumptions upon which its projected utilization is based demonstrate that its projected utilization is reasonable. Financial Feasibility of Care First The total project cost for the Care First agency is projected to be $25,808. The majority of the costs are reasonable for this type of health care project. The majority of the project development costs, the application fee and much of the cost of the consultant and legal fees, have already been paid by Care First. Care First's Schedule 2 was prepared in conformance with the requirements of the agency and accurately lists all anticipated capital projects of Care First. The necessary funding for the Care First project will come from Care First's existing $60,000 line of credit with Premier Bank, in Tallahassee. This method of funding the project is reasonable, appropriate, and adequate. Care First has demonstrated the short term financial feasibility of its project. Care First's schedule 6 presents the anticipated staffing requirements for its home health agency. The staffing projections are based upon the historical experience of D. G. Anthony and Care First, taking into consideration the projected start-up and utilization of the agency. The projected salaries are based upon current wages being paid to Care First employees, adjusted for future inflation. Care First's schedule 6 assumptions and projections are reasonable, and adequate for the provision of high quality care. The staffing proposed by Care First is sufficient to provide an RN or an LPN and an aide in each of the eight counties Care First proposes to serve in District 2. Care First's schedule 7 includes the payor mix assumptions and projected revenue for the first two years of operation. Medicare reimburses for home health agency services based upon the allowable cost for providing services, with certain caps. The Care First revenues by payor type were based upon the historical experience of D. G. Anthony and Care First, as well as the preparation of an actual Medicare cost report. The Care First payor mix assumptions and revenue assumptions are reasonable. Care First's projection of operating expenses in Schedule 8A is also based on the historical experience of D. G. Anthony and Care First, as modified for the mix of services to be offered and the projected staffing requirements. The use of historical data to project future expenses adds credibility to the projections. Care First's projected expenses for the project are reasonable. The Care First application presents a reasonable projection of the revenues and expenses likely to be experienced by the project. Care First has reasonably projected a profit of $8,315 for the first two year of operation. Care First's proposal is financially feasible in the long term. As the result of its community contacts, Care First has been offered the use of donated office space in Franklin, Jefferson, Wakulla, and Gadsden counties. The use of donated office space will decrease the cost of establishing a physical presence and providing services in those counties since Care First will not have a lease cost for a business office and a place to keep supplies. Quality of Care Through the experience of D. G. Anthony, Care First has identified the particular needs of the community it served. This experience has been carried over into Care First's provision of services. In the 9 months of Care First's existence at the time of hearing, it provided quality of care. Its predecessor, D. G. Anthony, also provided quality of care. While Care First's experience is relatively limited, there is no reason to expect, based on the experience of both Care First and its predecessor D. G. Anthony, that quality of care will not continue should its application be granted. IHS of Florida The Application IHS of Florida is a wholly-owned subsidiary of Integrated Health Services, Inc. ("IHS") formed for the specific purpose of filing CON applications. IHS operates other home health agencies under other subsidiary names. Pernille Ostberg is a senior vice president of the Eastern Home Care Division of Symphony Home Care Services, Integrated Health Services. In that capacity she oversees nearly 195 operations in six states, including Florida. Her operations include home health agencies, durable and medical equipment distributions, and infusion therapy offered by pharmacists. Under Ms. Ostberg's guidance, IHS has grown to its current roster of 195 agencies in only three years, from a beginning of only five agencies. IHS first acquired Central Park Lodges, primarily a nursing home company which also owned five home health agencies. Once these agencies became Medicare certified, IHS made a corporate decision to acquire additional Medicare certified home health agencies. Beginning approximately three years ago, IHS undertook a series of acquisitions which included Central Health Services, Care Team, ProCare/ProMed, and Partners Home Health. More recently, IHS has acquired the Signature Home Health and Century Home Health Companies. And, immediately prior to the final hearing in this matter, IHS acquired First American Home Health Care, making IHS the fourth largest provider of home health services in America. Of all the home health agencies overseen by IHS, 95% are Medicare certified, and 62-63 are located in Florida. IHS now has a presence in all districts except District 1 and 2. IHS personnel also have extensive experience in starting up new home health agencies. IHS personnel have opened over 40 locations across the United States. IHS employees have extensive experience bringing new home health agencies through successful surveys by the Joint Commission on the Accreditation of Hospital Organizations ("JCAHO") recommendations. Of 18 branches personally taken through initial survey by IHS's Pernille Ostberg, none were recommended to change their operations and none were cited for a deficiency. IHS has recently opened, licensed, and certified new home health agencies in AHCA Service District 5, 6, and 10. They have also received licensure in District 7, 8, and 11. Based on the extensive expensive of IHS personnel, a start up home health agency typically experiences 8,000 - 15,000 visits per first year. Opening a new program requires two months for licensure. It will require a registered nurse for three months to make certain all manuals are in place and that quality personnel are recruited. After achieving licensure, one must wait for a certification survey, which may take as long as six months. The three IHS home health agencies that became certified recently have experienced 200 visits in the first month, a good sign of growth. IHS' umbrella organization for home health organizations is Symphony. Most of their home health companies retained their original names. Other IHS home health companies include ProCare, Central Health Services, Partners Home Health, Nurse Registry, and First American. IHS of Florida has applied for applications in other districts. This applicant filed applications in District 7, 8 and 10 and each were approved. IHS of Florida's CON application number 8382 was prepared by Patti Greenberg with the significant input of IHS and IHS of Florida's operational experts. Ms. Greenberg has prepared 75-100 CON applications, 20-25 of which sought approval for Medicare Certified Home Health Agencies. Each of these prior applications had been approved or otherwise reached settlement before litigation. The Proposed Project Once the needs analysis was complete, IHS examined geographic issues within the 14 county district. IHS examined where the populations required home health agencies and what niche of the market IHS could expect to achieve. Projected visits were determined by examining month by month, how this agency would grow. This projected utilization was subdivided among sub-visit types. Existing IHS home health agencies visit mix (skilled nursing as opposed to home health aide or therapy visits) was used to estimate skill type of the projected total volume. The projected utilization was also subdivided by payor class. This payor class projection was derived specifically for District 2, its poverty levels and its managed care penetration. In the aggregate, IHS projects 7,650 visits in year one and 17,100 visits in year two. This projection is reasonable and achievable. Witnesses for the Agency agreed that IHS of Florida's projected number of visits was "definitely attainable". Past and Proposed Service to Medicaid Patients and for Medically Indigent The payor class analysis allowed IHS to conclude it should condition its approval of its application under the performance of 5% Medicaid and 1% charity care. The balance of the population served by an IHS Medicare Certified Home Health agency would be covered by Medicare. The condition is important as it is a requirement which, if not achieved, will subject IHS of Florida to fines and penalties by the agency. Improved Accessibility The applicant will improve the efficacy, appropriateness, accessibility, effectiveness and efficiency of home health services in District 2 if approved. IHS of Florida will provide good quality of care, should its application be granted. Quality of Care Through competitive forces, the applicant's approval will also improve the quality of care offered by home health agencies in District 2. The approval of IHS of Florida's application will also comply with the need evidenced by the extent of utilization of like and existing services in District 2. Economies from Joint Operations Certain economies derived from the operation of joint projects are achieved by IHS of Florida's proposal. IHS has a home office and corporate umbrella which oversees all of its operations for home health services. This master office offers economies of sale by sharing resources across a wide array of home health agencies in Florida and other states. Thus, the incremental expense for corporate overhead is reduced as compared to a free-standing home health agency. Additionally, this national oversight provides better economies to provide the most recent policies and procedures, billing systems, and other systems of business operation. Financial Feasibility IHS of Florida has the resources to accomplish the proposed project. As demonstrated on schedule 1, and schedule 3 of IHS exhibit 1, the budget for the project is only $144,000. This budget includes all appropriate equipment for both the initial and satellite offices. Budgeted amounts include all required lease expenses, equipment costs and even start-up costs such as salaries for the recruitment of training and staff prior to opening. In total, $52,000 of pre-opening expenses are projected, which is reasonable. IHS of Florida filed applications for other home health agency start-ups in three different districts. The applicant had more than $180,000 in cash on hand and an additional $226,000 assured from a commitment letter from IHS which was also contained in the application. A letter of commitment from Mark Levine, a director and executive vice president of IHS, indicated IHS will provide $250,000 in capital for this specific project. Additionally, IHS will provide up to $1 million in working capital loan to assure no cash flow problems ever arise. A similar letter of commitment appears in each of the CON applications which IHS of Florida has filed. IHS has committed to fund each of the CON applications applied for by IHS of Florida. Each of these letters of commitment for the various CON applications sought by this applicant are on file with the AHCA. In total, the applicant projects $600,000 in capital commitments assured. IHS' balance sheet, reveals access to $60 million in cash and cash equivalent. The record clearly demonstrates an ability of IHS to fund all capital contributions required by the applicant. The current assets of IHS approximate $240 million. In addition to having cash in the bank, IHS is a growing concern and is, in fact, a Fortune 500 company that is publicly traded on the New York Stock Exchange. IHS generates revenues which exceed its annual expenses. In the last year, IHS derived $30 million more than it experienced in expenses. The application is financially feasible in the short- term. IHS' application is also feasible in the long-term. IHS of Florida's utilization projections are reasonable. Budgeted staffing and salaries are reasonable. The cost limit calculation and reimbursement calculation by payor source, which is provided in great detail in Schedule 5 of IHS of Florida's application, is reasonable. Projected expenses associated with this project were reasonably calculated based on the actual experience of other IHS Home Health operations. The reasonableness of these costs are also demonstrated when compared with the cost per visit by existing agencies in District 2. In fact, IHS of Florida predicted it would be a lower cost provider than the expected cost of existing agencies at the time IHS of Florida's operations would begin. IHS of Florida's proposal will have a healthy, competitive effect on the cost of providing services by other providers. Putnam The Proposal Putnam proposes to establish a Medicare-certified home health agency with its primary office located in Bay County. Bay County was selected as the primary office based upon the locations of existing and approved agencies in District 2, the aggregate utilization of each, and the number of individuals aged 65 and over distributed among the existing District 2 counties and agencies. Mr. Alan Anderson is Putnam's sole stockholder, Director, and President. Under the ownership and administration of Alan Anderson, Putnam has provided Medicare-certified home health services in AHCA District 3 continuously since 1986. Mr. Anderson is also the sole owner, director, and president of Anderson Home Health, Inc., a Medicare-certified home health agency serving AHCA District 4 since 1992. Anderson Home Health's CON was obtained by Putnam through the same process undertaken by the prospective applicants in this proceeding. Putnam's District 3 agency has successfully served District 3 residents since 1986 at first through its Palatka office, then growing to its current size of four offices. In District 4, Anderson Home Health, Inc. has also experienced successful operations having grown from its principal office in Duval County to a total of four offices. Putnam's District 3 home health agency began with the original office located in Palatka, followed by offices opened in Gainesville, Ocala and Crystal River. Anderson Home Health, Inc.'s District 4 operation began with the original office located in Jacksonville; the second office was opened in Daytona Beach, followed by the opening of the third office in Orange Park; and the fourth office was opened in Macclenny. Putnam's District 3 agency is JCAHO accredited "with commendation." As part of CON application No. 8383, Putnam has agreed to certain conditions upon award. First, the proposed project will locate its primary office in Bay County. Putnam also conditions its approval with the provision that 0.25% of its admissions will be persons infected with the HIV virus. Four percent of its patients will be Medicaid or indigent patients. Finally, Putnam has conditioned its approval upon the provision of various special programs such as high tech home health services, a volunteer program, and the establishment of a rural health care clinic. History or Commitment to Provide Services to Medicaid and Indigent Patients For Medicare reimbursement purposes, Putnam proposes to maintain a Medicare-only agency and private sister agency which provides services to non-Medicare patients. The private sister agency will provide service to the Medicaid and indigent patients. The costs of providing services to these non-paying or partial paying patients will be absorbed by the agency as a contribution to the community. The establishment of a private sister agency to handle the non-Medicare patients is common in the home health industry. As a condition in the application, Putnam will accept up to 3.0% Medicaid patients. Although it stated in its application that it would accept between .5%-1.0% indigent patients, its conditioning of the application on 4.0% Medicaid and indigent patients would necessitate that it accept at least 1.0% indigent (if not more, should the Medicaid patients fall below 3%) in order to meet the 4.0% Medicaid and indigent care condition. The percentages proposed by Putnam are consistent with the statewide average (approximately 95% Medicare) and the District average (approximately 92.1% Medicare). Bay County's average of Medicare patients is approximately 96.4% Medicare. To meet the 4.0% Medicaid and indigent condition, Putnam's average of Medicare patients might have to be less than the Bay County average but not by much. Certainly, meeting the condition is achievable. The agency's position is that Putnam's Medicaid/indigent commitment is not a ground for denial of the application. Quality of Care Putnam has continuously owned and operated a licensed Medicare-certified home health agency in District 3 since 1986 and has been JCAHO accredited with commendation status since 1994. In an effort to continuously provide quality care, Putnam has developed a comprehensive set of policies and procedures to guide its staff, its physicians, volunteers, patients, as well as patients families. No evidence was presented to suggest that Putnam does not have a history or ability to provide quality care. Availability of Resources, Including Health Manpower, Management Personnel and Funds for Capital and Operating Expenditures Putnam has provided Medicare-certified home health service to the residents of District 3 for ten years. Putnam will be able to share its existing personnel and operations expertise with the proposed District 2 agency. Administrative, Managerial, and Operational Personnel Putnam intends to utilize existing administrative personnel in the start up and overall operation of the proposed agency. These management personnel include the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Data Processing Director, Director of Volunteers, Personnel Director. These experienced personnel will be available to provide valuable management support to the proposed agency. The proposed agency will be operated by an administrator who will report directly to Putnam's CEO, Alan Anderson. The agency's administrator will be actively involved in budget preparation, physician relations, community education, and preparation for regulatory agency surveys. The proposed agency will rely upon the demonstrated experience of key personnel in its initiation. Ms. Nora Rowsey, experienced in the start-up phases of home health agencies, will personally supervise and implement the start up phase of the proposed District 2 agency. Putnam intends to hire individuals to work within the proposed agency who already have experience in the provision of the necessary services. Current employees of Putnam's as well as contract personnel of the District 3 agency have indicated a willingness to provide services in Bay County once the application is approve. Funding and Capital Resources Putnam projects the total costs of initiating the proposed agency to be approximately $70,000. Putnam has simultaneously applied for two other Medicare-certified home health agencies, in Districts 6 and 7. Each of these projects area also projected to cost approximately $70,000. Putnam, therefore, has projected costs associated with all three projects of approximately $210,000. Additionally, there is a $10,000 contingency cost related to the District 3 offices bringing the total expenditure for all capital projects of $220,000. Putnam's application includes two letters from First Union National Bank of Florida which substantiate that there are funds on hand to finance all of Putnam's capital expenditures, including the District 2 proposed agency. As of April 18, 1996, Putnam's bank account had a twelve month average balance of $245,949.02. As of April 18, 1996 the accounts of both Putnam and Anderson Home Care Inc., had a combined twelve month average balance of $676,656.93. The evidence established that these funds exist and are available for all proposed capital projects. In the two years prior to hearing, Putnam showed sound management, significant growth, and a strong financial position. It continues to do so. In an interoffice memorandum dated May 28, 1996, from Roger L. Bell to Richard Kelly, Health Services and Facilities Consultant, Putnams' financial position was described as follows: The current ratio of .62 indicates the current assets are not adequate to cover short term liabilities. The long term debt to equity and equity to assets ratios are very weak. This, along with the negative equity make a weak financial position. The profit margin at .1% is also very weak, and raises some concern with the applicant's ability to cover operating expenses . Putnam Ex. No. 4. This criticism was answered by Putnam. The agency may not have considered certain factors applicable to a predominantly Medicare-reimbursed home health agency. Putnam's current liabilities are payable in a longer term than the receivables are collectible. Furthermore, with provision of 98% Medicare services, which is solely cost reimbursed, there remains only two percent of the operation left to make a profit. A .1% profit from the small amount of insurance and private pay patients indicated financial health. Putnam, moreover, is a viable operation because of its historical success, its knowledge of the industry, its expansion to six locations, its growth in staff, and its growth in patient visits. Putnam has the resources available to provide the necessary administrative, managerial, and operational manpower needed by the proposed home health agency. AHCA's financial criticisms are unfounded; Putnam has on hand the capital necessary for the accomplishment of the proposed project. Putnam has the experience and know-how to make the proposed project work in District 2's rural areas. Financial Feasibility Putnam has the resources to implement this project if approved. Putnam has the same capability that existed when three offices were opened during the period from April 1992 through February 1993, and the same resources when four offices were opened in 1995. In every instance, the new offices were started up with cash on hand from operation. Mr. Anderson, Putnam's President and sole shareholder and director, testified that he spends much time in the financial area of the operations. As of November 29, 1996, after deducting all accounts payable, Putnam has a cash balance of approximately $390,000. Anderson Home Health, Inc. had a balance of approximately $425,000. Mr. Anderson testified that the First Union letters in the application at pages 231 and 232 were correct and that Putnam is in even better shape now than when the letters were written. Putnam is financially feasible in the short term. AHCA contends Putnam's project is not financially feasible in the long term because the projected visits stay the same in the second year and because it does not project a profit in year two of operation. This fails to take into account Putnam's performance over the past ten years which, as the agency conceded at hearing, is an important consideration . Mr. Anderson purchased Putnam in 1986. At that time the agency had a single office in Palatka doing 4,000 visits. Following Mr. Anderson's purchase of the agency it had grown to over 55,000 visits and close to a hundred employees. After the success experienced by Mr. Anderson in Palatka, Putnam filed a CON application for District 4, with a proposed principle site in Jacksonville. The District 4 CON was approved by the agency--without any concerns for financial feasibility nor with any concerns for Putnam's cash flows. Without having any experience or referral sources in Jacksonville, Putnam began doing approximately 7,000 visits. The number of visits jumped to 45,000 in the second fiscal year, 123,000 in the third fiscal year, and as of September 30, 1996 the Jacksonville office performed 158,000 visits. Aside from the extraordinary growth experienced in the Palatka and Jacksonville offices, already discussed, Putnam has opened rural offices also doing very well. The Macclenny office in rural Baker County had over 15,000 visits in the first twelve months and is currently averaging over 1800 visits. The Crystal River office in rural Citrus County made over 12,000 visits in its first year and is currently doing approximately 1400 visits a month. Every new office opened by Putnam or Anderson Home Health since 1991 has been break even or better. Putnam has a proven track record for the successful and profitable operation of new Medicare-certified home health agencies. Putnam's project is financially feasible in the long term. Utilization Projections The application sets forth reasonable utilization projections. Based on Putnam's utilization in the past, there is no reason to believe the projections set forth in the application are or unreasonable or will not be achieved. Impact on Costs Putnam is a high tech provider of home health services and will provide some services not currently available or available only in a limited number of agencies. The impact of approval of Putnam's application on costs in the District will be minimal due to the reimbursement issues associated with Medicare which is cost based. RHA A Not-for-Profit Corporation in District II RHA is not-for-profit corporation whose purpose is to provide a continuum of care to the community. All profits are returned to its nursing homes or agencies as a way of continuing to build the programs. RHA owns two nursing homes in AHCA District II; Riverchase Care Center in Gadsden County and Brynwood Center in Jefferson County. If approved, RHA is proposing to locate its Medicare certified home health agency in existing space within the Riverchase and Brynwood nursing facilities. Both of these facilities are managed and operated by HealthPrime, Inc., a company which operates approximately 40 facilities in 13 states. While RHA is technically the owner and therefore applicant for this CON, HealthPrime would operate the proposed Medicare certified home health agency within the nursing homes. RHA's home health agency would have two offices. The office located in the Riverchase facility would serve Gadsden, Liberty, Franklin, Gulf, Wakulla, Jackson, Calhoun, Washington, Holmes and Bay Counties. The office located in the Brynwood facility would serve Leon, Jefferson, Madison and Taylor Counties. Financial Feasibility The only questions raised by AHCA concerning RHA's financial feasibility went to the ability of RHA to fund this project in conjunction with other CON projects listed on Schedule 2 of its CON application. The largest project on Schedule 2 of RHA's application was a CON application for a 20 bed addition to Riverchase Care Center. At hearing it was determined that since the filing of the instant home health CON application, the 20 bed application had been withdrawn, was no longer viable, and was not being pursued by RHA. Once AHCA's financial expert learned that the 20 bed addition to the Riverchase Care Center had been administratively withdrawn and that its costs should therefore no longer appear on Schedule 2, questions about the financial feasibility of the project were resolved. RHA's project was shown to be financially feasible in the short term based upon the financing commitment of HealthPrime. RHA proved that its assumptions and projections made in its financial analysis are reasonable. These assumptions were based on actual experience in the operation of similar skilled nursing facility based home health agencies, as well as prior experience of other home health agencies in their first two years of operation. RHA's proposed project shows a net income in years one and two and is financially feasible in both the short and long term. Availability and Access of Services To the extent that the number of people needing home health care will increase in the future, there is need for new providers of home health services to provide such availability and access. RHA's willingness to condition its application on service to AIDS, indigent and Medicaid patients can only improve the availability and access to services in the district. In addition, RHA's approval to provide nursing home based home health services is unique to the provision of home health services in District II. Efficiency RHA's proposal, which would place its home health agency within its nursing homes, is unique among the applicants in this proceeding. Such an arrangement provides not only an efficient continuum of care to the patients, it also provides efficiencies and cost savings in the sharing of resources. RHA's proposed project is cost effective because it utilizes existing space and equipment in its nursing homes. Skilled nursing home based Medicare certified home health agencies are specifically recognized by the Federal Medicare program in their cost reports. Home health reports are filed as a part of the nursing home cost report and there is an allocation of the nursing home's cost to the home health agency. This benefits both the provider and the Medicare program through cost savings. RHA's cost per visit to the Medicare program of $48 will be substantially less than the District II average of $66 per visit projected for the time RHA will be operational under the applied- for CON. RHA's proposed project will have no impact on its costs of providing other health care services. Appropriateness and Adequacy RHA proposes to provide the entire range of home health services throughout the district. Given the project need in the planning horizon, RHA's proposal is more than adequate to meet the demand for such services. Quality of Care An applicant's ability to provide quality care is another important factor in statutory and rule criteria. RHA and HealthPrime have shown, through operation of their nursing homes in Florida, all of which have superior ratings, that they have the ability to provide quality health care. In addition, HealthPrime, which will actually operate the home health agency, has experience operating four other nursing home based home health agencies. HealthPrime will utilize its quality assurance programs already in place in its other home health agencies and will seek JCAHO accreditation of this proposed agency. By combining a home health agency with its existing nursing homes, RHA will improve the case management of its patients by providing vertical integration of its services in a continuum of care. Such continuum of care provides a stability in personnel and providers that are working with the patient. Economies and Improvements from Joint or Shared Services As previously discussed, RHA's unique proposal to operate a nursing home based home health agency not only offers a continuum of care for the patient, it also provides fiscal economies to the agency as well as the Medicare program. Resource Availability Based on RHA's experience of hiring personnel for its existing nursing homes in the district, there will be no problem in hiring sufficient personnel for RHA's agency. Fostering Competition The addition of other Medicare certified home health agencies in a district consisting of 10 counties and only 23 providers will promote increased competition and more options for patients. Findings Applicable to All Four Applicants No Fixed Need Pool The agency has no rule methodology to determine the need for Medicare-certified home health agencies. The agency's most recent home health need methodology was invalidated in Principal Nursing vs. Agency for Health Care Administration, DOAH Case No. 93-5711RX, reversed in part, 650 So.2d 1113 (Fla. 1st DCA 1995). There is, therefore, no numeric need determination, or "fixed need pool", established by the agency applicable in this proceeding. District 2 AHCA District 2 is composed of 14 counties. The applicants propose to concentrate their service in various, different parts of the district. Local and State Health Plan Preferences District 2 Health Plan Services to Medicaid and Medically Indigent The first preference under the District 2 Health Plan provides a preference to applicants with a history of providing services to Medicaid or medically indigent patients or commitment to provide such services in the future. Mr. Franklin of Care First has such a history. He is an owner of Wakulla Manor, which had a Medicaid occupancy rate of 88.09% for the period of July-December, and the administrator of Miracle Hill Nursing Home which had a Medicaid occupancy rate of 95.74% for the same period. In the face of such a record, Care First’s commitment of 7% Medicaid and 1% uncompensated/charity patients might seem to pale. But it is a significant commitment, given the nature of the home health agency business, and one upon which Care First agrees its application should be conditioned. IHS conditioned its application on 5% Medicaid and 1% charity care. Putnam conditioned its application on an “Indigent and Medicaid participation equal[ling] 4.0%.” Putnam Ex. No. 1, pg. 51. Putnam, moreover, proposes a Medicare-only agency. Establishment of a private sister agency, a practice common in the home health care industry, will allow Putnam to provide service to the Medicaid and indigent patients separate from its Medicare-only agency. RHA has provided a high percentage of Medicaid/charity days at its Riverchase facility (92.10%) and at its Brynwood facility (90.24%). In addition, RHA is willing to condition its CON on the provision of a minimum of 1% of annual visits to indigent care and 5% to Medicaid. Service to Unserved Counties. Preference 2 states that “[p]reference should be given to any home health services CON applicant seeking to provide home health care services in any county within the District which is not presently served by a home health agency.” There are no counties within District 2 that are not presently served by a home health agency. Service Through a County Public Health Unit Preference 3 states that “[p]reference should be given to a home health services CON applicant seeking to develop home health care services to be provided through a county public health unit in the district in order to more adequately serve the elderly and medically indigent patients who are isolated or unable to travel to permanent health care sites." Of the four applicants, only IHS of Florida’s application is conditioned on working with public health units. IHS has experience working with public health units, working with them currently in Martin County, Manatee County and Broward County. Nonetheless, IHS of Florida will not be providing its services “through” a public health unit. Public Marketing Program Preference 4 states, “[p]reference should be given to a home health services applicant who has a history of providing, or will commit to provide, a public marketing program for services which included pamphlets, public service announcements, and various other community awareness activities. These commitments should be included on the granted CON as a condition of that CON.” Care First currently markets its services to the community and commits to a public marketing program in the future as a condition of its CON. IHS of Florida committed to performing at least one community awareness activity per calendar quarter as a condition of its application. It also indicated, moreover, that it would work to develop public service announcements and marketing programs with the help of public health units or any other appropriate vehicle. The latter indication, however, was not made a condition of the application. Putnam provides educational services to the community, its employees, patients and patients’ families, including the provision of pamphlets, and presenting audio and video tapes as appropriate to the patient and their families. Putnam, however, did not condition its application on a commitment to a public marketing program or commit to such a program in any other way in its application. RHA stated it would accept a condition on its CON to provide a public marketing program for services, including pamphlets, public service announcements and other community awareness activities. It did not reflect such a condition on the “Conditions” page of the application, but, given its statement that it would accept such a condition, there is nothing to prevent the agency from imposing such a condition should it grant RHA’s application. Access Requirements Preference 5 is, “[p]reference should be given to a home health services CON applicant who agrees, as a condition of the CON, to meet the following access requirements for each county in which services are provided: 1) 24 hour local telephone call (or toll-free) contact. 2) 24 hour call/response capability. 3) Maximum on one (1) hour response time following call. Care First currently meets the requirements of Preference 5 in the counties in which it now provides services, and has committed to continue to meet these requirements as a Medicare certified home health agency in all counties in which it will provide services. Care First has made as conditions of its CON, provision for 24-hour accessibility by answering service and installation of a toll-free access line and maintenance of a log of calls during the hours the agency is closed, including documenting of response time to each call. IHS of Florida conditioned grant of its CON on a 30 minute response time, and 24-hour phone availability on a toll-free hot line. Putnam presently provides the services in this preference in its District 3 Medicare certified home health agency and agrees to meet this preference within 90 days of initiating services. It did not, however, make a commitment to meet this preference on the “conditions,” page of its application. There is nothing to prevent the agency from making Putnam’s CON, if granted, conditional upon compliance with this preference. RHA has agreed to have its CON conditioned to meet the access requirements of Preference 5. 2. State Health Plan Service to Patients with AIDS The first preference under the State Health Plan is that “[p]reference shall be given to an applicant proposing to serve AIDS patients.” All four applicants are committed to serving AIDS patients. Full Range of Services. Preference 2 of the State Health Plan is “[p]reference shall be given to an applicant proposing to provide a full range of services, including high technology services, unless these services are sufficiently available and accessible in the same service area." There are currently 11 hospital-based Medicare certified home health agencies in District 2. Several of them provide the high tech services which are sometimes needed by discharged hospital patients. Very few referrals for high tech care have been received by D. G. Anthony or Care First since May, 1995, and there is no indication such services are not available in District 2. Care First has identified, however, an unmet need for the pediatric and pre-hospice home health agency services and has conditioned its application on the provision of those services to the community. IHS of Florida proposes, among other high tech services, infusion therapies, pain management therapies and chemotherapy. There is no evidence, however, that these therapies are not available in District 2. The same is true of Putnam as to the high tech therapies it proposes to provide. There is no evidence that they are not available in District 2. Although RHA indicated in its application that it intended to provide the entire range of services that a home health agency can provide, again, there is not evidence that they are not available in District 2. Disproportionate Share Provider History Preference 3 is “[p]reference shall be given to an applicant with a history of serving a disproportionate share of Medicaid and indigent patients in comparison with other providers within the same AHCA service district and proposing to serve such patients within its market area." Care First, having been formed in March, 1996, did not have a history of providing Medicaid and indigent patients. Care First has committed to 7% of its visits to Medicaid patients, well above the average of existing District 2 agencies of 2-3% Medicaid. Care First has committed to 1% of its visits to charity/uncompensated care. IHS of Florida has committed to 5% Medicaid and 1% charity care. Like Care First, IHS of Florida, as a newly formed corporation, does not have a history of serving a disproportionate share of Medicaid/indigent care patients. Putnam’s commitment is 3% to Medicaid and 1% to charity care. This commitment will be met through its sister home health agency and not the Medicare-certified home health agency for which the CON is sought. RHA has committed to set aside 5% total annual visits to Medicaid patients and 1% of annual visits to indigent care. It has a history of providing a disproportionate share of services to Medicaid patients at its two skilled nursing facilities in District 2, Riverchase Care Center in Quincy and Brynwood Center in Monticello. Underserved Counties Preference 4 is [p]reference shall be given to an applicant proposing to serve counties which are underserved by existing home health agencies. The rural areas of District 2 are traditionally underserved. Putnam will serve Bay County, an underserved county; the three other applicants will serve rural areas of more than one county in District 2. Consumer Survey Data Preference 5 is "[p]reference shall be given to an applicant who makes a commitment to provide the department with consumer survey data measuring patient satisfaction." Care First has committed to providing such data to the agency. IHS of Florida will maintain a data base of results of patient satisfaction surveys and make them available to the agency, just as it already does. Putnam will make available to the agency the results of surveys similar to surveys measuring patient satisfaction Putnam has already developed. Putnam has conditioned its application on providing these surveys to the agencies as well as surveys measuring physician satisfaction. RHA has cited on its “Conditions” page, “. . . (it) will provide the Agency for Health Care Administration with consumer survey data.” Quality Assurance Program and Accreditation The State Health Plan’s Sixth Preference is “[p]reference shall be given to an applicant proposing a comprehensive quality-assurance program and proposing to be accredited by either the National League for Nursing or the Joint Commission on Accreditation of Healthcare Organizations." Care First included in its application a copy of its Quality Assurance Program which has been in use since May, 1995. The program meets the state and federal licensure and certification requirement and the stringent requirements of JCAHO. Moreover, Care First has conditioned its application upon JCAHO accreditation. IHS of Florida submitted documentation regarding its Quality Assurance Program through initiatives such as Total Quality Management and Continuous Quality Improvement. It will seek accreditation from JCAHO within one year of receiving its CON. Putnam, an existing home health agency in District 3 since 1986, has over the years developed and refined a comprehensive quality assurance program which is above the industry standard. The District 3 agency, using its quality assurance program, has attained its JCAHO accreditation “with commendation,” a distinction received by less than 4% of all applicants. Putnam will seek accreditation from JCAHO for its District 2 operation within one year of receiving its CON. RHA is willing to condition its CON on the provision of a comprehensive quality assurance program and accreditation by the JCAHO. Need 1. Numeric Need Since there is no published fixed need pool applicable to this proceeding, the parties, other than the agency, developed their own methodologies for determining numeric need. Each of the methodologies employed by the parties was reasonable. After taking note of the statistics for actual patient visit growth in District 2 from 1991 to 1994, Michael Schwartz began with a conservative number of 60,000 new patient visits per year, a number half of the growth for the lowest growth year of that time period. Multiplying that number times the three horizon years of 1994-97 equals 180,000 new patient visits from 1994 which yields a need for 5.2 agencies. The reasonableness of numeric need in excess of four is supported by other factors. After the filing of the four applications at issue in this proceeding, there are two fewer Medicare-certified home health agencies with certificates of need in District 2. At the same time, home health care visits have been on the increase not only in the district as discussed, above, but in the state as well. Statewide, home health care visits grew from 18 million to 22 million between 1991 and 1994. The utilization of home health care agencies is increasing because of population growth and an increase in the number of visits per patient. The amount of time spent by patients in the hospital is decreasing. The decrease translates into increased need by patients for visits from home health agencies. The need for home health is going to continue to increase because it is a cost-effective alternative to nursing home placement and hospital care. From 1991 to 1994, the number of home health visits more than doubled: from 369,396 to 869,893. This trend continued in 1995. The recent significant growth in the utilization of home health agencies in District 2 is expected to continue. The growth is attributable not only to a population increase in the district but to increase in the use rate for home health agency services as well. The growth in use rates can be explained, in part, by the increase in the senior population (65 and older) and the pressure exerted by managed care for earlier hospital discharges and home health agency services as a viable alternative in some cases to inpatient treatment. The senior population in District 2 is reasonably expected to grow approximately 8% in the five years after 1996, with 15% growth expected reasonably in the 75 to 84 year old population and even higher growth, 25%, in the population over 84 years old. 2. Other Indications of Need Local physicians have experienced difficulty arranging for the existing home health agencies to provide services to patients located in remote areas of District 2. Specialized groups, such as AIDS patients, would, in all likelihood, benefit from additional home health agencies in District 2. Furthermore, a study conducted by IHS of Florida showed that the district has an unusually high rate of diabetes and in four counties has a diabetes death rate 100% greater than the statewide average. Well Springs home health agency is one of the two Medicare-certified home health agencies to cease providing Medicare-certified home health services after the four applicants in this proceeding filed the applications at issue here. Well Springs was licensed in all 14 counties of District 2 and had physical locations in Franklin, Gadsden, Bay, Leon, Liberty, Taylor and Madison Counties. It had a significant share of the District 2 Medicare certified home health agency market with 13.1% of the 1994 visits, the second highest in the District. With Well Springs discontinuing Medicare-certified home health agency services, a void was left for such services in District 2, particularly in those counties in which Well Springs had a physical presence.
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 Nos. 8380, 8381, 8382 and 8384 to RHA/Florida Operations, Inc., Care First, Inc., Home Health Integrated Health Services of Florida, Inc., and Putnam Home Health Services, Inc., respectively. DONE AND ENTERED this 9th day of June, 1997, in Tallahassee, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1997. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 Jerome W. Hoffman, General Counsel Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5403 Richard Ellis, Esquire Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308-5408 W. David Watkins, Esquire Watkins, Tomasello & Caleen, P.A. 1315 East Lafayette Street, Suite B Tallahassee, Florida 32301 Mark Emanuel, Esquire Panza, Maurer, Maynard & Neel NationsBank Building, Third Floor 3600 North Federal Highway Fort Lauderdale, Florida 33308 Paul Amundsen, Esquire Amundsen & Moore 502 East Park Avenue Tallahassee, Florida 32301 Theodore E. Mack, Esquire Cobb Cole & Bell 131 North Gadsden Street Tallahassee, Florida 32301
Findings Of Fact This proceeding involves certificate of need (CON) application No. 4912 by Home Health Care of Bay to establish a Medicare-certified home health agency to serve Bay County Florida. Home Health Care of Bay's CON application was timely filed on December 15, 1986. Home Health Care of Bay's application was deemed complete on March 2, 1987. On April 30, 1987, DHRS preliminarily denied Home Health Care of Bay's CON application based on a determination that: There was no need demonstrated by Home Health Care of Bay for an additional home health agency in Bay County. Home Health Care of Bay is owned by Mark Ehrman, M.D. Dr. Ehrman is a board-certified internist, hematologist, and oncologist. Dr. Ehrman has been in private practice in Fort Walton Beach, Florida, since November, 1984. Prior to 1984, Dr. Ehrman was involved in the organization and delivery of medical services, the teaching of medicine, and the practice of medicine in Canada. Home Health Care of Bay will serve all patients regardless of race, income, sex, ethnic background, religion, or physical handicap. Home Health Care of Bay will provide 3 percent Medicaid and 3 percent indigent home health visits. Dr. Ehrman, both in his office and in his durable medical equipment (DME) company, goes to great lengths to ensure that indigent persons receive medical services. Dr. Ehrman, in his office practice, provides medical services to all persons regardless of their ability to pay. He is a participating physician in Medicare, Medicaid, and other insurance programs. Dr. Ehrman's participation in these programs and his determination not to screen patients financially has increase access to medically underserved patients. Dr. Ehrman's private practice includes approximately 5 percent Medicaid patients. In the past, home health agencies have tended to focus on acute medical problems. The traditional model for home health care has been to shorten an acute hospital stay for a discrete problem. Even chronically ill patients still came to the hospital when they had an acute episode. There has been little focus on avoiding hospitalization. There is now a shift in home health care which attempts to avoid hospitalization in appropriate cases. Dr. Ehrman, in treating patients at home, has become involved with sophisticated triage procedures, home pain management, and other procedures which maximize a patient's time outside the hospital. Such procedures allow patients to remain safely and comfortably in their homes. Procedures which can be safely done in the home include the starting of I/V morphine drips or I/V antibiotics. These procedures have traditionally not been done in the home. Nationally, and in Bay County, several factors are causing a shift to home health use. First, pressure is being applied in the form of reimbursement mechanisms to reduce the expense of institutional care. Patients are discharged from the hospital sooner and there is more pressure to use home health services. Second, an increased incidence of chronic illnesses, such as AIDS, will increase the use of home health services. The incidence of AIDS and AIDS related diseases will continue to increase and has obvious implications for increased home health usage. Home health care will make "hospital-like" care more available and less expensive for AIDS patients. Third, health consumers want to maintain the quality of their lives and remain at home as long as possible. HOME HEALTH CARE OF BAY'S PROPOSAL Home Health Care of Bay will provide medical personnel services in the disciplines of registered nursing, certified home health aides, occupational therapy, speech therapy, physical therapy, and medical/social work. These services will be provided to Medicare, private insurance, and indigent patients. Home Health Care of Bay will provide traditional home health services and many "high-tech" services which currently are not available at all or are not routinely done in Bay County. Such services include the transfusion of blood and blood products, professional pain management, the drawing of arterial blood gases, the care of Groshong and Hickman catheters, and the care of subcutaneous pumps and subcutaneous venous access devices. Home Health Care of Bay's proposed services will be utilized by many different types of patients, including renal patients, chronic pulmonary patients, chronic heart disease patients, and cancer patients. Home Health Care of Bay will provide health care services to AIDS patients. Petitioner's Exhibit 5 contains a complete list of services which Home Health Care of Bay will provide. Home Health Care of Bay's services will be available 24 hours a day, 7 days a week. This is an important commitment because home health care patients need services regardless of the time of day or day of the week. Even more important than the discrete list of services that Home Health Care of Bay will provide is the integration of all these services into one agency. In that way, patients are not shuttled from place to place; their care can be organized and integrated for maximum benefit. This integration will be accomplished by formulation of a plan of therapy which will include evaluation by a social worker and a physician in order to deal with the patient's total needs. Home Health Care of Bay's commitment to a total integration of patient services is evidenced by its plan to provide 4 percent of its visits in the medical/social work category. Such services are important in providing comprehensive care. The provision of medical/social work services will help patients and their families identify both medical and non- medical needs. Once such needs are identified, the patients and families can be channeled to the appropriate services, agencies and resources. Home Health Care of Bay will provide the physician with direct and timely communication about the patient. This will include daily delivery of complete medical records. Such a service is crucial in order to provide home care to patients with complicated problems. Home Health Care of Bay has a budget line item for marketing of $21,000 in the first year and $18,000 in the second year of operation. This money will be used to change the perception and pattern of home health use. Patients and doctors will be made aware of the availability of new home health services and the integration of those services with existing services. Home Health Care of Bay's marketing effort will overcome the reluctance of some physicians to utilize home health services. The demographics of the subdistrict of Bay County were analyzed and compared to the demographics of District II. The analysis shows that from 1986 to 1989, 3,076 persons 65 and over will be added to the population of Bay County. This represents a growth rate of 21.5 percent in Bay County compared to a district growth rate of 12.4 percent. Of the elderly growth in District II of 7,355, approximately 40 percent of such growth is occurring in Bay County. Forty percent (40 percent) is a high percentage in a 14 county district and indicates that the elderly population in Bay County is growing at a very rapid rate. Elderly persons are the most frequent users of home health services. Thus, rapid population growth is occurring in the segment of the population most in need of home health services. STATUTORY CRITERIA 1/ Consistency With State Health Plan Home Health Care of Bay`s proposal was reviewed for conformity with the State Health Plan and is consistent with that plan. The 1985-1987 Florida State Health Plan states: Home health agencies provide nursing, health aid, therapy and other kinds of services to patients in their homes. This allows individuals to remain at home rather than use more expensive institutional care to recover from acute illness or to manage chronic conditions. The State Health Plan further states: Home health services can be a cost effective form of long term care for the elderly and the infirm. The provision of home health services proposed by Home Health Care of Bay will provide residents of Bay County with a lower cost alternative to institutionalized long term care as referenced in the above State Health Plan excerpts. The State Health Plan also addresses the unwillingness of many providers to serve the medically needy: Medicare is the largest payor for home health care to the elderly, though some private insurers and Medicaid both cover home health services. Policy makers are increasingly concerned about providers' willingness to serve Medicaid recipients and medically indigent Floridians. Home Health Care of Bay has committed to provide at least 3 percent Medicaid and 3 percent indigent visits. Such a commitment will greatly increase access of medically underserved groups. Approval of a provider who accepts a significant portion of Medicaid patients will encourage current providers to accept such patients in order to retain their Medicare and private referrals. Physicians and discharge planners are much more willing to refer to an agency that will care for all their patients. The State Health Plan contains the following objective: OBJECTIVE 1.5.: 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. The methodology utilized by Home Health Care of Bay to project need maximizes competition consistent with economies of scale by allowing additional providers to enter the market while maintaining existing agencies at a size at which they can operate efficiently. Consistency With Local Health Plan Home Health Care of Bay's proposal was reviewed in relation to the 1986 District Two Health Plan and is consistent with that plan. The local health plan contains a section on long-term care services, including home health services. This section contains a numerical methodology to determine need. That methodology indicates a need for an additional agency in Bay County. The local health plan also contains priorities for home health services. Priority C states that: Priority will be given to home health services applications who have a history of providing, or will commit to provide, services to Medicare, Medicaid and medically indigent patients. Dr. Ehrman, the owner of Home Health Care of Bay, has a record in his practice of providing services to all payor groups. He has committed to continue to do so in his home health agency. Priority D of the Local Health Plan states: Priority will be given to home health services applicants who have a history of providing, or will commit to provide, a public marketing program for their services which includes pamphlets, public service announcement and various other community awareness activities. Home Health Care of Bay has budgeted for and committed to an extensive marketing program. A marketing priority is unusual in a local health plan and indicates an awareness of the need to educate the public about home health services. Determination Of Need DHRS currently has no rule governing the need for home health agencies. A historical summary of the regulation of home health agencies in Florida is described in a memorandum prepared by Ms. Marta V. Hardy. Ms. Hardy was the Deputy Assistant Secretary for Regulation and Health Facilities, DHRS, from September 1984 through June 1987. Ms. Hardy was responsible for all CON decisions and was the ultimate decision-maker in regard to the preliminary denial of Home Health Care of Bay's CON. In the fall of 1984, DHRS attempted to promulgate a rule to replace the invalidated Rule of 300. This proposed rule was based on a use rate methodology, but was invalidated in a rule challenged proceeding in 1985. After the invalidation of the proposed rule, DHRS implemented an interim policy which it used to review home health agencies. This interim policy is reflected in the "Bob Sharpe memo," dated May 15, 1986. The interim policy was applied to home health agency application beginning with the first batching cycle in 1986. The interim policy utilized a variation of the previously invalidated rule and attempted to correct the problems which caused the proposed rule to be found invalid. The interim policy is a use rate/population methodology which projects the number of Medicare enrollees using home health services in the future. This number is multiplied by the average number of visits per Medicare home health user. The total number of visits is divided by an agency size of 9,000 visits to yield the gross number of agencies needed. The total number of licensed and approved agencies is subtracted from the gross need number to yield the net number of agencies needs. The interim policy phased in the needed agencies over a three year period. DHRS defended the interim policy in circuit court when the Florida Association of Home Health Agencies (FAHHA) sought to stop DHRS from using the policy. DHRS defended the interim policy in December, 1986, before the First District Court of Appeal. Use of the interim policy resulted in the approval of 23 home health agencies. DHRS abandoned its interim policy sometime in the fall of 1986. No notice was given to the public or to interested parties that a change in DHRS policy had occurred. DHRS published no document rescinding the Sharpe memo. Only after applications were filed in the second batching cycle of 1986, were applicants informed that DHRS had changed its interim policy. Applicants in the December, 1986, batching cycle, including Home Health Care of Bay, were asked for an unlimited extension of time within which DHRS could render a decision. Applicants who refused 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. In only one instance was a CON granted after abandonment of the interim policy. This occurred in Franklin County, where no home health agency existed at the time of that approval. DHRS' new "policy" was not developed by DHRS health planners. The "policy" put the burden of proof on the applicant to demonstrate an unmet need. Such a demonstration would be difficult to make. The Office of Community Medical Facilities, the office within DHRS responsible for preliminary CON review, reviewed Home Health Care of Bay's application using the "policy" based on "the thirteen statutory criteria." Such a review required Home Health Care of Bay to prove need by demonstrating an unmet need. However, as evidenced by the Office of Community Medical Facilities' 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 virtually impossible for an applicant to meet. Ms. Joyce Farr was the DHRS employee responsible for the review of Home Health Care of Bay's application and for the development of the related State Agency Action Report (SAAR). The SAAR was the only work product Ms. Farr prepared in regard to Home Health Care of Bay's application. Ms. Farr has never been qualified as an expert witness in the home health area. Ms. Farr has no formal education in health planning and is unfamiliar with Medicare reimbursement. Ms. Farr does not consider herself to be an expert in financial feasibility projections, staffing, or quality of care. Ms. Farr is not in a policy-making position at DHRS. Ms. Farr was given no instructions by her superiors as to how to review Home Health Care of Bay's application. DHRS presented the testimony of Ms. Farr to attempt to explain how Home Health Care of Bay's application was reviewed. Ms. Farr was tendered and accepted, not as an expert health planner, but as an expert in "CON review." Ms. Farr articulated the standard she used to determine need: [I]f an applicant or residents of a county or community resources of a county or just about any organization basically says that there is an unmet need, meaning that there is no home health services available or there is an accessibility problem where certain groups are not being served -- certain services are not being offered -- I become aware of it by their simply documenting, "I cannot get home health services," like CAPS [Capitol Area Community Aging Agency] that said, "They aren't serving these people. We need somebody in here to serve these people." That would show that there was an unmet need. Unless an applicant, or community resource, could demonstrate an accessibility problem, no need existed according to Ms. Farr. Ms. Farr did not review the Medicare cost reports of current providers to determine the services they provided prior to recommending denial of Home Health Care of Bay's application. Ms. Farr reviewed utilization data of current providers for only one year. Ms. Farr did no analysis of the types of visits provided by existing providers. Ms. Farr looked only at the total number of visits. The only information Ms. Farr utilized in regard to the type of visits being provided was information given to her by existing providers. In determining that no need existed for medical/social work services, Ms. Farr relied on the list of social service agencies included in the local health plan, but did no analysis as to what services such agencies offered. Ms. Farr determined that no Medicaid access problem existed in Bay County based on information current providers gave her. She did not verify these representations with the Medicaid office. Ms. Farr did no charge comparison in her review. At the time of her review, Ms. Farr did not know when a new competitor last entered the market in Bay County. Ms. Farr did not address Objective 1.5 of the State Health Plan in her review. She was unaware of Objective 1.5 until it was pointed out to her in deposition. Ms. Farr utilized no planning horizon in determining need, though she admitted that one of the purposes of CON review is to plan for future health needs. Ms. Farr's review of Home Health Care of Bay's application was deficient for several reasons. First, Ms. Farr's review did not look at a projection of future need. It did not analyze demographics or utilize a planning horizon. It contains no elements of a needs analysis. A mere review of what currently exists misses the point of health planning. Second, in making a determination of no need, Ms. Farr relied solely on comments of existing providers who told her that there was no need for a competing agency. Dr. Deborah Kolb, vice-president of Jennings, Ryan, Federa & Co., participated in the preparation of Home Health Care of Bay's CON application. In preparing the needs assessment portion of the application, Dr. Kolb reviewed the State Health Plan, the Local Health Plan, utilization data, home health CON decisions, and services offered by current providers. The need methodology which appears in Home Health Care of Bay's application is contained in Dr. Kolb's expert report. The methodology appearing in her report and the application was the interim policy in use by DHRS at the time the application was filed. This was the methodology in the Bob Sharpe memo. Home Health Care of Bay will provide home health services to the residents of Bay County. Bay County is in DHRS Service District II. According to the 1986 District II Health Plan, District II is composed of 14 separate subdistricts. Each subdistrict is composed of one county. Bay County is a reasonable service area for Home Health Care of Bay. Dr. Kolb utilized a two-year planning horizon to project the need for home health agencies. This is a reasonable planning horizon. Table 3 of Dr. Kolb's report analyzes need on a district-wide basis. Two time frames, July, 1988, and January, 1989, are shown because Home Health Care of Bay's application was filed in December, 1986. Two years from that date would be December 1988. The official population projections from the Governor's Office focus on July and January of each year. Use of the two project dates straddles the December, 1988, planning horizon. The population numbers of District II for 65 and over are 62,546 for January, 1988, and 63,558 for January, 1989. The 1984 Medicare use rate, which is an estimate of the number of Medicare home health visits per elderly person in Florida for 1984, is multiplied by the projected elderly population to arrive at a projected number of visits. The number of projected visits in Table 3 of 118,565 in July, 1988, and 120,483 in January, 1989, is a result of multiplying the use rate by the projected population. To determine the number of agencies needed, the projected number of visits is divided by optimal agency size. This calculation yields a gross agency need of 13 agencies in the district in July, 1988, and January, 1989. The number of licensed and approved agencies, 12, is subtracted from gross need, 13, to yield net need of one (1) agency in July, 1988, and January, 1989. Dr. Kolb utilized 9,000 for the optimal agency size figure. This is consistent with the interim policy and with data which suggests that is where economies of scale occur. An optimal agency size of 9,000 appears in the Local Health Plan methodology. Table 4 of Dr. Kolb's report presents the same analysis as Table 3, described above, on a subdistrict basis to determine where the one agency found to be needed in District II should be located. Use of the same methodology results in a gross agency need of three. The two existing agencies are subtracted from the gross need of three to yield a net need for one agency in July, 1988, and January, 1989, in Bay County. The methodology described above is a reasonable one for determining need. The methodology utilizes a common health planning approach. It is the same methodology used by DHRS as an interim policy. It is the same type of methodology used by DHRS in planning for other types of health services. Beyond the numerical analysis discussed above, other factors indicate the need for an additional home health agency in Bay County. Bay County has a very low home health use rate and a very high nursing home use rate. The Bay County home health use rate is 1.5 visits per person 65 years and older. The Bay County use rate is significantly lower than the state use rate of 1.89. This disparity indicates a gap between real need and historical utilization. At the same time, Bay County has a nursing home use rate of 41 beds per thousand elderly compared to a state rate of 23 beds per thousand. Additionally, the occupied nursing home beds per thousand elderly is much greater in Bay County than in the state. In the state there are 21.3 occupied beds per thousand elderly. The utilization of Bay County's nursing home beds is approximately 75 percent greater than utilization in the state as a whole. These statistics suggest an inappropriate allocation of resources between home health care services and more expensive institutional nursing home services. Nursing home utilization would decrease with more sophisticated home health care. Many people are inappropriately institutionalized in nursing homes and could be cared for at home. From a medical perspective, Dr. Ehrman was of the opinion that an additional home health agency was needed. Availability, Quality Of Care, Efficiency, Appropriateness, Accessibility, Extent Of Utilization, And Adequacy Of Like And Existing Services There are currently two Medicare-certified home health care agencies serving Bay County. One way to evaluate agency performance is to analyze the mix of services and the number and types of visits being provided. Current providers have concentrated heavily on providing nursing and aide visits. Of approximately 18,000 visits provided each year, approximately 16,000 visits comprised the nursing and aide categories. Neither provider did any specifically medical/social work visits in 1985 or 1986. Additionally, the total number of visits delivered to the residents of Bay County has remained constant in 1985 and 1986. Bay County's constant use rate illustrates the need for more education in regard to home health services. While current providers do certain high tech procedures if directed to by a doctor, current providers are not committed to consistently doing high tech procedures. High tech services are not the most profitable. Their margins are often low and it is more economically beneficial for current providers to provide aide services. Transfusions, initiation of I/V antibiotics, continuous infusion of morphine, pain nursing, and catheter care are all services which existing agencies have rarely done or do with great difficulty. Without doing such procedures as a regular basis, competency is difficult to maintain. Bay Home Health Care Agency d/b/a Home Health of Panama City (Home Health of Panama City) is a free-standing home health agency and has been in business for 11 1/2 years. Home Health of Panama City does no Medicaid visits. Bay Medical Center Home Health receives referrals from Home Health of Panama City because Home Health of Panama City does not take Medicaid or indigent patients. Home Health of Panama City does no medical/social work visits. Home Health of Panama City has no money budgeted for marketing. Bay Medical Center Home Health is a hospital based home health agency. It functions as a department of Bay Medical Center, an acute care hospital located in Panama City, Florida. In the past two years, Bay Medical Center Home Health has provided no medical/social work visits though some of those services were provided by nurses during nursing visits or by other departments of Bay Medical Center. Bay Medical Center Home Health does not currently provide care of certain high tech devices such as the Denver pleuroperitoneal pump or the subclavian pump. Its staff would have to be trained to provide such care. Bay Medical Center Home Health has never given blood transfusions or cared for a Denver shunt. Bay Medical Center Home Health has a very low number of average visits per patient (6.8) when compared to the state average of 30 visits per patient. Bay Medical Center Home Health does a low percentage of Medicaid visits. In 1986, Bay Medical Center Home Health was reimbursed for 120 Medicaid visits out of a total of 3,280 Medicaid-reimbursed visits provided in District II. A comparison of reimbursed Medicaid visits provided by Bay Medical Center Home Health to District II as a whole demonstrates a Medicaid access problem. In 1986, Bay County had 25 percent of the district's population and 16 1/2 percent of the district's Medicaid eligible. Yet only 3.7 percent of the district's Medicaid-reimbursed home health visits were provided in Bay County. If services were Medicaid accessible, the number of Medicaid visits would be closer to the Medicaid percent of the population. Bay Medical Center Home Health Care's Medicaid visits represented only 1 percent of their total visits for 1986. When Home Health of Panama City's zero (0) Medicaid visits is considered, out of all home health visits provided in Bay County only 0.7 percent were Medicaid visits. Approximately 25 percent of Dr. Ehrman's patients from the Panama City area are Medicaid or indigent. This evidences a need for more Medicaid services. Bay Medical Center Home Health has no line item for marketing and advertising. Ability of the Applicant To Provide Quality of Care Dr. Ehrman is a highly trained and experienced physician. While in Canada, Dr. Ehrman established a hematology and oncology health care delivery system in Montreal. This system is still in existence and working well. Dr. Ehrman has been instrumental in improving the delivery of health care in his practice area. He has established tumor boards at local hospitals and provided many new procedures and devices in the home. Dr. Ehrman has raised the level of awareness on the part of other practitioners in his area as to a team approach to the delivery of services. This has increased the type of home services now available. Dr. Ehrman has responded to the needs of his patients for a multi- disciplinary approach to oncology by associating a clinical psychologist. This person deals with the psychological needs of the cancer patients seen by Dr. Ehrman. Dr. Ehrman has been instrumental in beginning many new and innovative practices in his office. For instance, he administers chemotherapy to Medicare patients in his office. He accomplished this by arranging with local pharmacists to mix and supply chemotherapy drugs. Dr. Ehrman will work with these same pharmacists in Home Health Care of Bay. Dr. Ehrman is involved in a durable medical equipment company. Many new devices and treatments were first used in the area by Dr. Ehrman's company. Dr. Ehrman has been a leader in the community in keeping up with new home health care developments. Home Health Care of Bay will have adequate staff on a full-time basis and add staff as utilization increases. Dr. Ehrman currently contracts with two nurses who are well trained and have over 1,000 hours of in-service training. Home Health Care of Bay is committed to keeping up with state-of-the- art home health care services and will add new services as they are developed. Availability and Adequacy of Alternatives There are no realistic alternatives to the establishment of a new home health agency. The alternative of nursing home care is not satisfactory. Most persons would prefer home care to nursing home care when at all possible. The alternative to home care which is currently being used is to shuttle the patient from the emergency room to the hospital to the doctor's office. Eventually the patient drops out of the system or settles for a lower level of services. Availability of Resources, Including Health Manpower, Management Personnel and Funds for Capital and Operating Expenditures . . . Extent to Which the Proposed Services Will Be Accessible to All Residents The staffing requirements for Home Health Care of Bay are shown on Table 11 of the application. That staffing plan is reasonable. Home Health Care of Bay will have a full-time administrator at a salary of $27,000. A capable administrator can be recruited at that salary. Home Health Care of Bay will employ a full-time nurse supervisor at a salary of $21,000. A nurse supervisor can be hired at that salary. Home Health Care of Bay will employ a full-time clerical person at an annual salary of $16,000. A clerical person can be hired at that salary. The above salaries and Home Health Care of Bay's ability to recruit such persons is reasonable based on Dr. Ehrman's experience employing similar personnel in his office. Home Health Care of Bay will hire contract staff to provide skilled nursing services, physical therapy services, speech therapy services, occupational therapy services, medical/social work services, and home health aide services. Such persons can be contracted with to provide the type of services Home Health Care of Bay proposes based on discussions with such persons. Dr. Ehrman currently contracts with two nurses in Ft. Walton Beach to provide nursing services similar to those proposed by Home Health Care of Bay. Such services are provided mainly to non-Medicare patients and the arrangement has worked very well. Funds for Capital and Operating Expenditures Project costs are depicted on Table 25 of the application. The costs are reasonable. Home Health Care of Bay can be started for $22,600. Immediate and Long-Term Financial Feasibility of the Proposal At hearing, DHRS admitted the short-term financial feasibility of Home Health Care of Bay's proposal. The statement of projected income and expense in Figure 7 of the application and on page 14 of Dr. Kolb's report was prepared under Dr. Kolb's supervision. The majority of assumptions on which the pro forma is based have been stipulated to by DHRS as reasonable assumptions on which to base a financial projection. The only assumptions not admitted by DHRS relate to utilization and payor mix. DHRS, however, introduced no evidence that refuted the reasonableness of these assumptions. The utilization projection used to calculate gross revenue in the pro forma was 3,800 visits in 1988 and 8,500 visits in 1989. The utilization projections are reasonable based on the agency's demographic base and Dr. Ehrman's commitment to education and marketing. The projection of costs and charges depicted on page 45 of the application is reasonable based on Dr. Ehrman's current office experience. The number of visits is multiplied by the charge per visit type to calculate gross revenue. This calculation yields a gross revenue of approximately $200,000 in year 1 and $462,000 in year 2. The payor mix for Home Health Care of Bay is found on Table 7 of the application. Home Health Care of Bay predicts 3 percent Medicaid visits, 80 percent Medicare visits, 14 percent private pay and insurance visits, and 3 percent indigent visits. The pay mix projections are reasonable based on the mix of patients Dr. Ehrman currently sees. Ms. Farr admitted that the projections were reasonable. The difference between Medicare and Medicaid reimbursement and full charges results in the contractual allowances figure. Bad debt and charity deductions were calculated based on 3 percent indigent and 3 percent Medicaid visits. Deductions from gross revenue, which are funds not received because of contractual allowances, bad debts, or charity, are subtracted to yield net revenue. Deductions from revenue are approximately $38,000 in year 1 and $135,000 in year 2. Net revenue is approximately $162,000 in year 1 and $327,000 in year 2. The second portion of the pro forma lists expenses. This list contains all the expenses expected for a new home health agency. All the expenses listed are reasonable. The pro forma shows a loss of $28,505 in the first year and a profit of $13,207 in the second year. Home Health Care of Bay has the equity to sustain a loss in the first year. In the second year of operation, based on the above assumptions, expenses are $314,000 and net revenue is $327,000 for a net income of $13,000. These projections indicate that the project is financially feasible in the long term. Table 26 on page 41 of the application presents the project timetable anticipated when the application was filed. Any delay in this timetable due to this litigation will not materially change the projections or commitments contained in the application. Impact of the Proposal on Costs of Providing Health Services, Including Effects of Competition and Improvements in Financing and Delivery of Health Services Which Foster Competition and Services To Promote Quality Assurance and Cost Effectiveness The introduction of a new home health agency into the Bay County market will stimulate competition. Such competition will stimulate growth in competitors and increase the overall level of services. Approval of a new competitor where there has been no new competition for nine to ten years will put pressure on providers to provide a wider range of services as well as higher quality services. Ms. Young, administrator of Bay Medical Center Home Health, admitted that if Home Health Care of Bay's CON is approved, her agency might begin educating physicians in regard to available services, rather than waiting for physicians to request a service. As the current providers testified, as agency visits go up or down, the number of staff required can be adjusted without incurring unreasonable costs. Current providers have control over their costs and staffing. Home Health Care of Bay's charges are competitive. In some areas, such as skilled nursing and home health aide, Home Health Care of Bay's charges are lower than current providers' charges. Price competition allows competition for private pay patients. Impact The addition of Home Health Care of Bay to the home health market will not significantly affect current providers. Studies have indicated that new entrants into the home health market do not significantly affect existing providers. The elderly population of Bay County is growing rapidly. When the 1984 home health use rate is applied to elderly population growth between 1986 and 1989, approximately 5,800 new visits are attributable to population growth alone. Home Health Care of Bay projects it will deliver 3,800 visits in its first year of operation and 8,500 visits in its second year. Thus, a large percentage of those visits are attributable to population growth alone. Home Health Care of Bay's marketing and education programs will raise the local use rate and generate more visits. Dr. Kolb analyzed the financial impact of Home Health Care of Bay's project on current providers. Her analysis considers a worst case scenario and assumes that current providers' visit levels will be affected by the introduction of a new provider. The analysis then calculates the financial impact on current provider. In order to do this, Table 11 calculates the average cost per visit from existing agencies' 1985 Medicare cost reports. Home Health Care of Panama City's average cost per visit is $37.18. Bay Medical Center Home Health's average cost per visit is $41.76. The Medicare program pays agencies the lower of Medicare cost caps or actual costs. The current providers in Bay County are well below the Medicare cost caps and so will be paid their actual costs. Table 11 calculates the difference between actual agency costs and Medicare cost caps. Home Health of Panama City was 18 percent below its cost caps. Bay Medical Center Home Health was 24 percent below its cost caps. Thus, Home Health Care of Bay could provide the number of visits it projects and even if all those visits came from existing providers, the current providers could still operate at a level of cost that would be Medicare reimbursable. The approval of Home Health Care of Bay's application will not have a significant adverse impact on existing providers.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order granting CON No. 4912 to Home Health Care of Bay County, Florida, Inc., to establish a Medicare-certified home health agency in Bay County, Florida. DONE AND ENTERED this 17th day of December, 1987, in Tallahassee, Florida. DIANE K. KIESLING 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 17th day of December, 1987. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 87-2151 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Home Health Care of Bay County, Florida, Inc. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3); 5(4); 7-10(5-8); 12-16(48- 52); 18(53); 19 & 20 (54); 21(55); 24-27(56-59); 28- 31(59-62); 37-52(9-24); 54-57(25-28); 58-77(28-47); 78-89(63-74); 91-102 (75- 86); 104-114(87-97); 116-129(97-110); 130(110); 131(111); 133-135(112); 136- 139(113); 140 & 141(114); 142-153(115-126); 154-163(126-135); 165-175(136-146); 179-182(147-150); 183(150); 184 & 185(151); 186(152); 187 & 188(153); 189- 191(154); 192 & 193(155); 194 & 195(156); 196(157); 197(158); 200-203(159-162); 207(163); 209(164); 210(165); 212-218(166-172); and 219-225(172-178). 2. Proposed findings of fact 17, 32-36, 53, 90, 103, 115, 132, 164, 176- 178, 198, 199, 204-206 and 211 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 22, 23 and 208 are rejected as being unsupported by the competent, substantial evidence. Proposed findings of fact 4 and 11 are rejected as being unnecessary and/or irrelevant. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Health and Rehabilitative Services Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1 & 2); 2(3); 6(Footnote 1); 7(148) and 13(4). Proposed findings of fact 3-5, 8-12, 14-40, 43-45 and 47-53 are subordinate to the facts actually found in this Recommended Order. Proposed finding of fact 42 is rejected as being unsupported by the competent, substantial evidence. Proposed findings of fact 4 and 46 are rejected as being unnecessary and/or irrelevant. COPIES FURNISHED: Byron B. Mathews, Jr., Esquire Vicki Gordon Kaufman, Esquire McDermott, Will and Emory 101 N. Monroe Street Tallahassee, Florida 32301 Theodore E. Mack, Esquire Assistant General Counsel Department of Health and Rehabilitative Services Regulation & Health Facilities Ft. Knox Executive Center 2727 Mahan Drive Tallahassee, Florida 32308 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
The Issue Whether or not the Petitioner is entitled to be issued a Certificate of Need to establish a home health agency to serve Putnam County, Florida.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, post-hearing memoranda and the entire record compiled herein, the following relevant facts are found. Family Center Home Health Care, Inc. (Petitioner), filed an application seeking to establish a home health agency to serve Putnam County, Florida. Ms. Felice M. Knotts, R.N., M.S.N., is the person who completed the application for the issuance of a Certificate of Need on behalf of Petitioner. Ms. Knotts has been a registered nurse since approximately 1966, and is a Doctoral candidate for a degree in Health Services Administration. The application was referred to the North Central Florida Health Planning Council, Inc., pursuant to Sections 381.493-.499, Florida Statutes, for review and comments. The Health Systems Agency (HSA) staff, its project review committee and its Board of Directors each recommended denial to the Department of Health and Rehabilitative Services of a Certificate of Need with the Board recommending denial by a vote of 23 to 0. Need for the proposed project is to be measured against standards found in the Local Health System's plan and Chapter 10-5, Florida Administrative Code, pursuant to Section 381.494, Florida Statutes (1979). By letter dated October 27, 1981, Petitioner was advised by the Respondent that her proposal to establish a home health agency in Putnam County had been reviewed by the North Central Florida Health Planning Council, Inc., and was denied on the basis that the proposed project was inconsistent with the HSA's health system plan and Chapter 10-5.11 (14), Florida Administrative Code. In addition, the two (2) current home health agencies operating in Putnam County, even if combined, do not reach the average daily census maximum of three hundred (300) which is required for the establishment of another home health agency. As stated, currently there are two (2) home health agencies licensed to serve Putnam County, Upjohn Health Services and Central Florida Home Health Services. During 1980, Upjohn served six (6) patients and Central Florida Home Health Services served one hundred sixty-two (162) patients. Upjohn found demand insufficient in Putnam County to establish a sub-unit. At the time that Petitioner's application was reviewed by the Department of Health and Rehabilitative Services, Upjohn had a case load of five (5) patients while Central Florida had a case load of ninety-five (95). During the hearing herein, representatives of each agency indicated that it had sufficient capacity to meet future demands. Standard 1-1 in the Health System's plan requires that the need for new home health agencies be based on home health use rates, projected population and a minimum volume of 1,200 patients per year per agency. Based on current regional use rates of six (6) patients per 1,000 population and the projected population in 1985 of some 56,800 people in Putnam County, 341 Putnam County residents would need home health care during 1985. By use of this standard, the need could exist for less than one-third (1/3) of a single home health agency. Petitioner sought to introduce into evidence a chart which would purportedly show the need as required pursuant to Chapter 10-5, Florida Administrative Code. The chart was based on Ms. Knotts' contact with numerous physicians who practice in the subject area and purportedly recorded their responses in a document designated as Petitioner's Composite Exhibit No. 3. Based on the fact that none of the physicians who purportedly relayed information to Petitioner was present to testify during the course of this hearing, information contained in petitioner's survey is hearsay. As such, that information is not, standing alone, reliable or sufficient to support a basis for which a finding of fact can be made. Chapter 120.58(1)(a), Florida Statutes. Rule 10-5.11(14)(b), Florida Administrative Code, provides that a Certificate of Need for a proposed new home health agency shall not be issued until the daily census of each of the existing home health agencies or sub-units providing services within the health service area of the proposed new home health agency has reached an average of three hundred (300) patients for the immediate preceeding calendar quarter. That rule also allows for need to be shown for a proposed new home health agency by demonstrating mitigating and extenuating circumstances as follows: That the population of a proposed service area is being denied access to home health care services because existing agencies are unable to provide service for all persons in need of home health care or that approval of the new home health agency would foster cost contain ment for all providers in the health service area. Based on the above, it is concluded that the two (2) currently licensed home health agencies in Putnam County have not obtained the average daily census of three hundred (300) patients. Likewise, there was no substantial competent evidence that the population of Putnam County is being denied home health services or that creation of Petitioner's home health agency would foster cost containment for all providers in the health service area. In this regard, officials from the existing two (2) currently licensed home health agencies testified to the extensive under-utilization of existing services which would likely have the effect of increasing charges because of the duplication of under-utilized services which cannot be demonstrated to be cost-effective. Based thereon, I shall recommend that the Petitioner's application to create a home health care agency be denied.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent, State of Florida, Department of Health and Rehabilitative Services, enter a final order denying Petitioner's application for the issuance of a Certificate of Need to establish a home health agency to serve Putnam County, Florida. RECOMMENDED this 20th day of August, 1982, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of August, 1982.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Gulf Coast Home Health Service of Florida, Inc. is an existing licensed provider of Medicare-certified home health services in Pinellas County. The parties have stipulated that Gulf Coast has standing to participate as a party in this proceeding. Metro Home Health Care, Inc. is a proprietary agency owned by Ann Durham, Robert Carver and John Timp, a Certified Public Accountant. Metro was incorporated in November of 1984 and has been operating as a home health agency since June of 1985. It currently provides facility staffing with nurses, nurses' aides and mental health workers, and also takes private duty calls from hospitals. Due to the fact that so many patients who are in need of home health care are elderly and eligible for Medicare, referring hospitals and physicians attempt to utilize those home health agencies which are Medicare-certified. Metro proposes to expand its services to provide treatment to Medicare patients, and thus filed an application for a Certificate of Need in December of 1985. A home health agency in Florida must obtain a Certificate of Need from HRS before it can be licensed and become eligible to receive Medicare reimbursement. As the agency is already operational, there is no cost associated with this project. Metro realizes that there is a lag time between the provision of services to Medicare patients and Medicare reimbursement for such services. In order to avoid interest costs, Metro proposes to utilize the profits from its current staffing services to support its home health care program, in lieu of using a commercial line-of credit. Metro believes, however, that lines of credit with banking institutions can be acquired if operational funds are needed in the future. Metro has encouraged and supported the training and continuous education of its staff by providing information and funds for courses offered in the community. It intends to continue this practice. Metro proposes to provide skilled nursing services, physical therapy services, occupational therapy services, speech therapy services, IV therapy, rehabilitative services, social services and home health aid services. Some of these services will be obtained on a contractual basis, as opposed to in-house staffing, depending upon the need for and utilization of such services. Metro proposes to provide two percent of its services to Medicaid patients and two percent of its services to indigent patients during the first year after obtaining a Certificate of Need. During its first year as a Medicare-certified provider, it is anticipated that Metro will provide approximately 75 percent of its services to Medicare patients, 10.5 percent to private pay patients, 10.5 percent to third-party payor patients and 4 percent to Medicaid and indigent patients. In its second year, Metro proposes an aggregate of five percent of its services to be offered to Medicaid and indigent patients. By the end of its first decade, the intent is to have incrementally increased the level of service to indigent and Medicaid patients to ten percent. Metro's current charges for skilled nursing care are in the median range of charges by other home health agencies in the area. Charges for this service range between $40.00 and $60.00, and Metro charges $47.00 per visit. While Metro's Director, a registered nurse, did not have intimate knowledge of the bookkeeping, interim payment reports, cost reports, record keeping or computerization required by Medicare, one of the owners of Metro is a Certified Public Accountant. Since the filing of the Certificate of Need application, the owners of Metro have met with an assigned intermediary for the Medicare program, and they have discussed the completion of forms, patient claims and annual reports, as well as the Medicare reimbursement system. The Medicare program reimburses providers at a rate which represents the lowest of either costs, charges or the Medicare cap for the service provided. Thus, there is little or no profit element in the provision of Medicare services. However, Metro will realize a positive net income through the provision of services to Medicare, private, third party payor, Medicaid and indigent mix of patients proposed for the first year of operation. This is true even with a tripling of the amount of calculated contractual allowances set forth in Metro's application. The figures and projections contained in the pro forma statement of revenues and expenses included in Metro's Certificate of Need application are outdated and some of the utilization estimates may be exaggerated. However, Metro is of the opinion that its existing profits which have greatly increased since the date of its application, will enable it to operate in a financially feasible manner on both an immediate and long-term basis. Metro desires to offer Medicare services so that it will be competitive with other agencies which do so and can receive a fair share of referrals. Hopefully, more referrals will include more private pay and insurance covered patients, which will produce greater profits. The reimbursement rate for services to Medicaid patients is even lower than for Medicare patients, though it has recently been raised. The per visit reimbursement rate for Medicare purposes can be negatively affected by increasing the number of Medicaid and indigent patients served. It would not be financially feasible for a home health agency which served only Medicare patients to provide Medicaid and indigent services. When HRS initially reviewed Metro's application, it utilized an invalid methodology to determine the need for additional home health services in Pinellas County. HRS no longer utilizes this methodology and did not attempt to do so during the final administrative hearing. HRS does not presently have any methodology pursuant to rule or policy for projecting numeric need for new home health agencies. Instead, it looks at the general statutory criteria applicable to Certificate of Need review for all health care services. There were no numeric need methodologies for home health care services offered at the final hearing. While neither the State Health Plan nor the local District Health Plan specifically address or identify the need for home health agencies, both plans emphasize the improvement of access to the medically underserved. There are approximately 29 licensed and approved Medicare-certifed home health agencies in District 5, which includes Pinellas County.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED THAT Metro Home Health Care, Inc. be GRANTED a Certificate of Need to operate a home health agency in Pinellas County, with the condition that a minimum of two percent of total visits be provided to Medicaid patients and two percent of total visits be provided to indigent patients. Respectfully submitted and entered this 5th day of November, 1987, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3556 The proposed findings of fact submitted by the parties have been accepted and/or incorporated in this Recommended Order, except as noted below: Petitioner Gulf Coast: 9. Rejected as contrary to the evidence. 10, 11. Rejected as irrelevant and immaterial. 13-15. Rejected as irrelevant and immaterial. 17. Rejected as irrelevant and immaterial. 22. Rejected as hearsay. 23-27. Rejected as irrelevant and immaterial. 29-30. Rejected as irrelevant and immaterial. 31. Partially rejected. It must be assumed that goals in the State and District Plans reflect need. 36. Rejected as contrary to the evidence. Last sentence accepted. 38. Rejected as contrary to the evidence. 39 & 41. Rejected as too broad a conclusion to be drawn from the evidence. 45. Second sentence rejected as hearsay. 50, 51, & 53. Rejected, not supported by sufficient evidence. Last sentence accepted only if private pay or insurance-covered patients are not considered. Last sentence accepted only if private pay or insurance-covered patients are not considered. 60. Accepted only-if it is assumed that the percentage of care rendered to private pay or insurance-covered patients decreases. 62 & 63. These factual findings are accepted, but are incomplete in that they fail to recognize the importance of becoming a Medicare-certified provider in order to also obtain referrals of non-Medicare patients. 64-73. These "findings of fact" are addressed in the Conclusions of Law. Respondent HRS: p. 3, last full sentence Accepted only if it is assumed the agency serves only Medicare patients. p. 4, last sentence of first full paragraph Rejected as not supported by competent evidence. Respondent Metro: The "proposed recommended order" submitted on Metro's behalf does not contain proposed findings of fact, and is more in the nature of closing argument. Consequently, it is not possible to render specific rulings upon Metro's proposed findings of fact. COPIES FURNISHED: Leonard A. Carson, Esquire Carson & Linn, P.A. 1711-D Mahan Drive Tallahassee, Florida 32308 John Rodriguez, Esquire Assistant General Counsel 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32399-0700 Ann Durham, Director Metro Home Health Care, Inc. 10707 66th Street North Pinellas Park, Florida 33565 R. S. Powers, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Conclusions M2 22) ON 228 DOAH NO: 10-1502 AHCA NO: 2010000783 RENDITION NO.: AHCA-12- © l¢23°5S-OLC CASE NO: 10-515PH AHCANO: 2010005631 DOAH NO: 10-9952 AHCA NO: 2010009639 Having reviewed the attached Notices of Intent to Deem Application Incomplete and Withdrawn from Further Review, Administrative Complaint, and Notice of Intent to Deny, and all other matters of record, the Agency for Health Care Administration (“the Agency”) finds and concludes as follows: Filed June 21, 2012 3:49 PM Division of Administrative Hearings 1. The Agency has jurisdiction over the above-named Provider (“the Provider”) pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Notices of Intent to Deem Application Incomplete and Withdrawn from Further Review, Administrative Complaint, Notice of Intent to Deny, and Election of Rights forms to the Provider. (Composite Ex. 1) The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Provider shall pay the Agency an administrative fee of $500.00 in connection with AHCA No. 2010009638 and $6,000.00 in administrative fines in connection with AHCA No. 2010005631. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case numbers should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 ORDERED in Tallahassee, Florida, on this AO day of , 2012. Elt¥abeth Dydek, Secretary Agency for Health Care Administration
Other Judicial Opinions 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 of 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. 2 CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below- lay of Ly 2 , 2012. named persons by the method designated on this Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Facilities Intake Unit (Electronic Mail) Finance & Accounting Revenue Management Unit (Electronic Mail) D. Carlton Enfinger, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Alba M. Rodriguez, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Michael P. Gennett, Esquire Akerman Senterfitt 1 Southeast 3rd Avenue, Floor 25 Miami, Florida 33131-1700 (U.S. Mail) Yehia Abdelmonem, Administrator National Nursing Pool, Inc. 1620 West Oakland Boulevard Oakland Park, Florida 33311 (U.S. Mail) June C. McKinney Administrative Law Judge Division Of Administrative Hearings (Electronic Mail) Gwe DIS te, 1 FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CHARLIECRIST THOMAS W. ARNOLD GOVERNOR. " Better Health Care for all Floridians SECRETARY Jamuary 24, 2010 “CERTIFIED MAIL / RETURN RECEIPT REQUESTED Certified Article Number “:" ADMINISTRATOR ; a ae National Nursing Pool Inc PhO S901 3848 4934 S3bb nse Number: 20743096 1620 W Oakland Park Blvd, Ste ¥ SENDERS RECORD | Oakland Park, FL 33311 remem e #: 2010000783 NOTICE OF INTENT TO DEEM APPLICATION INCOMPLETE AND WITHDRAWN FROM FURTHER REVIEW Your application for license is deemed incomplete and withdrawn from further consideration pursuant to Section 408.806(3)(b), Florida Statutes, which states that “Requested information omitted from an application for licensure, license renewal, or change of ownership, other than an inspection, must be filed with the agency within 21 days after the agency’s request for omitted information or the application shall be deemed incomplete and shall be withdrawn from further consideration and the fees shall be forfeited’’. You were notified by correspondence dated July 28, 2009 to provide further information addressing identified apparent errors or omissions within twenty-one days from the receipt of the Agency’s correspondence. Our records indicate you received this correspondence by certified mail on August 4, 2009. As this requested information was not timely received by the Agency, your application is deemed incomplete and withdrawn from further consideration. The outstanding issues remaining for licensure are: 1. The applicant did not name an administrator for the home health agency. No resume or name for the administrator was submitted in response to the omission letter. The administrator isa required position for home health agencies. Kurt Joseph, one of the sellers, sent a letter dated December 28, 2009 and received by the Agency on January 8, 2010 stating that he was stepping down as the administrator. Mr. Joseph had been the administrator of record; however, his name was never entered in the application as the administrator. The pertinent statutes and rules that apply include the following; Section 400.462 (1), Florida Statutes (F.S.), “Administrator” means a direct employee, as defined in subsection (9), who is a licensed physician, physician assistant, or registered nurse licensed to practice in this state or an individual having at least 1 year of supervisory or administrative experience in home health care or in a facility licensed under chapter 395, under part II of this chapter, or under part I of chapter 429.” Section 408.806 (1), F.S., “An application for licensure must be made to the agency on forms furnished by the agency, submitted under oath, and accompanied by the appropriate fee in order to be accepted and considered timely. The application must contain information required by authorizing statutes and applicable rules...” Section 400.476 (1) (a), F.S., “ADMINISTRATOR.-- 2727 Mahan Drive,MS#34 Tallahassee, Florida 32308 Visit AHCA online at http://ahca.myflorida.com EXHIBIT 1 National Nursing Pool Inc January 24, 2010 (a) An administrator may manage only one home health agency, except that an administrator may manage up to five home health agencies if all five home health agencies have identical controlling interests as defined in s. 408.803 and are located within one agency geographic service area or within an immediately contiguous county. If the home health agency is licensed under this chapter and is part of a retirement community that provides multiple levels of care, an employee of the retirement community may administer the home health agency and up to a maximum of four entities licensed under this chapter or chapter 429 which all have identical controlling interests as defined in s. 408.803. An administrator shall designate, in writing, for each licensed entity, a qualified alternate administrator to serve during the administrator's absence.” Section 59A-8.003 (10) (a) through (c), Florida Administrative Code (F.A.C.), “A home health agency has the following responsibility in terms of hours of operation: (a) The home health agency administrator and director of nursing, or their alternates, must be available to the public for any eight consecutive hours between 7:00 a.m. and 6:00 p.m., Monday through Friday of each week, excluding legal and religious holidays. Available to the public means being readily available on the premises or by telecommunications. (b) When the administrator and the director of nursing are not on the premises during designated business hours, a staff person must be available to answer the phone and the door and must be able to contact the administrator and the director of nursing by telecommunications. This individual can be a clerical staff person. (c) Ifan AHCA surveyor arrives on the premises to conduct an unannounced survey and the administrator, the director of nursing, or a person authorized to give access to patient records, are not available on the premises they, or the designated alternate, must be available on the premises within an hour of the arrival of the surveyor. A list of current patients must be provided to the surveyor within two hours of arrival if requested.” 2. The applicant’s alternate administrator/director of nursing left the agency while the application was still under review. The applicant stated that the alternate director of nursing would assume the position of director of nursing until a replacement could be found in a letter to the Agency dated August 27, 2009. The response to the omission letter was received August 24, 2009 and contained the resume for the individual that left the home health agency as the proposed alternate administrator/director of nursing. No replacement resume was ever submitted. Their application did contain the name of an RN Delegate. The applicant was requested in the omission letter to submit a resume for the RN Delegate. Since the applicant did not send in a resume, it was not possible to determine if the individual named to be the alternate director of nursing was the RN Delegate and if that individual qualified for the position. The pertinent statutes and rules that apply include the following; Section 408.806 (1) F.S., “An application for licensure must be made to the agency on forms furnished by the agency, submitted under oath, and accompanied by the appropriate fee in order to be accepted and considered timely. The application must contain information required by authorizing statutes and applicable rules...” Section 400.462(10), F.S., "Director of nursing" means a registered nurse who is a direct employee, as defined in subsection (9), of the agency and who is a graduate of an approved school of nursing and is licensed in this state; who has at least 1 year of supervisory experience as a registered nurse; and who is responsible for overseeing the professional nursing and home health aid delivery of services of the agency.” tr National Nursing Pool nc January 24, 2010 Section 59A-8.0095(2), Florida Administrative Code (F.A.C.), “ Director of Nursing. (a) The director of nursing of the agency shall: 1. Meet the criteria as defined in Section 400.462(10), F.S.; 2. Supervise or manage, directly or through qualified subordinates, all personnel who provide direct patient care; 3. Ensure that the professional standards of community nursing practice are maintained by all nurses providing care; 4. Maintain and adhere to agency procedure and patient care policy manuals; and (b) If the administrator is not a physician or registered nurse, the director of nursing shall: 1. Establish service policies and procedures in compliance with Chapter 64E-16, F.A.C., and state health statutes and administrative rules pursuant to Section 381.0011(4), F.S., which generally conform to recommended Centers for Disease Control (CDC) and Occupational Safety and Health Agency (OSHA) guidelines for safety, universal precautions and infection control procedures; 2. Employ and evaluate nursing personnel; 3. Coordinate patient care services; and 4. Set or adopt policies for, and keep records of criteria for admission to service, case assignments and case management. (c) The director of nursing shall establish and conduct an ongoing quality assurance program which assures: 1. Case assignment and management is appropriate, adequate, and consistent with the plan of care, medical regimen and patient needs; 2. Nursing and other services provided to the patient are coordinated, appropriate, adequate, and consistent with plans of care; 3. All services and outcomes are completely and legibly documented, dated and signed in the clinical service record; 4. Confidentiality of patient data is maintained; and S. Findings of the quality assurance program are used to improve services.” 3. The applicant was requested to provide a resume for the alternate administrator. The resume submitted was for the individual that left the home health agency on August 27, 2009, four days after the receipt of the response to the omission letter. No replacement resume for the alternate administrator was received. The pertinent statutes and rules that apply include the following: Section 400.462 (1), F.S., “Administrator" means a direct employee, as defined in subsection (9), who is a licensed physician, physician assistant, or registered nurse licensed to practice in this state or an individual having at least 1 year of supervisory or administrative experience in home health care or in a facility licensed under chapter 395, under part II of this chapter, or under part I of chapter 429.” Section 400.476 (1) (a) Staffing requirements; notifications; limitations on staffing services. (1) ADMINISTRATOR.-- (a) An administrator may manage only one home health agency, except that an administrator may manage up to five home health agencies if all five home health agencies have identical controlling interests as defined in s. 408.803 and are located within one agency geographic service area or within an immediately contiguous county. If the home health agency is licensed under this chapter and is part of a retirement community that provides multiple levels of care, an employee of the retirement community may administer the home health National Nursing Poo! Ine January 24, 2010 agency and up to a maximum of four entities licensed under this chapter or chapter 429 which all have identical controlling interests as defined in s. 408.803. An administrator shall designate, in writing, for each licensed entity, a qualified alternate administrator to serve during the administrator's absence. Section 408.806 (1), F.S., “An application for licensure must be made to the agency on forms furnished by the agency, submitted under oath, and accompanied by the appropriate fee in order to be accepted and considered timely. The application must contain information required by authorizing statutes and applicable rules...” Section 59A-8.0095 (a) 2., F.A.C., Administrator. (a) The administrator of the agency shall: 2. Designate, in writing a direct employee or an individual covered under a management company contract to manage the home health agency or an employee leasing contract, pursuant to Section 468.520, F.S., that provides the agency with full control over all operational duties and responsibilities to serve as an on-site alternate administrator during absences of the administrator. This person will be available during designated business hours, when the administrator is not available. Available during designated business hours means being readily available on the premises or by telecommunications. During the absence of the administrator, the on-site alternate administrator will have the responsibility and authority for the daily operation of the agency. The alternate administrator must meet qualifications as stated in Section 400.462(1), F.S. Section 59A-8.003(10), F.A.C., “A home health agency has the following responsibility in terms of hours of operation: (a) The home health agency administrator and director of nursing, or their alternates, must be available to the public for any eight consecutive hours between 7:00 a.m. and 6:00 p.m., Monday through Friday of each week, excluding legal and religious holidays. Available to the public means being readily available on the premises or by telecommunications. (b) When the administrator and the director of nursing are not on the premises during designated business hours, a staff person must be available to answer the phone and the door and must be able to contact the administrator and the director of nursing by telecommunications. This individual can be a clerical staff person. (c) Ifan AHCA surveyor arrives on the premises to conduct an unannounced survey and the administrator, the director of nursing, or a person authorized to give access to patient records, are not available on the premises they, or the designated alternate, must be available on the premises within an hour of the arrival of the surveyor. A list of current patients must be provided to the surveyor within two hours of arrival if requested. 4. The applicant did not send evidence of current insurance. They submitted a binder which indicates an intent to purchase insurance. The pertinent statutes and rules that apply include the following; Section 408.806 (1), F.S., “An application for licensure must be made to the agency on forms furnished by the agency, submitted under oath, and accompanied by the appropriate fee in order to be accepted and considered timely. The application must contain information required by authorizing statutes and applicable rules...” Section 400.471 (3) (a) (b), F.S., “In addition to the requirements of s. 408.810, the home health agency must also obtain and maintain the following insurance coverage in an amount Wallonal INUTSINg roa! ine January 24, 2010 of not less than $250,000 per claim, and the home health agency must submit proof of coverage with an initial application for licensure and with each application for license renewal: (a) Malpractice insurance as defined in s, 624.605(1)(k). (b) Liability insurance as defined in s. 624.605(1)(b).” 5. The applicant did not submit a Certificate of Status as requested in the omission letter. The pertinent statutes and rules that apply include the following: Section 408.806 (1) F.S., “An application for licensure must be made to the agency on forms furnished by the agency, submitted under oath, and accompanied by the appropriate fee in order to be accepted and considered timely. The application must contain information required by authorizing statutes and applicable rules. ..” Section S9A-8.004 (2), F. A.C., “A corporate applicant shall identify the state of incorporation, its legal name, its business name, and the names and addresses of corporate officers and directors, the name and address of each person having at least a 5% equity interest in the corporation. For initial and change of ownership applications and corporate name changes, a current certificate of status or authorization pursuant to Chapter 607, F.S., is required.” 6. The applicant has two outstanding fines that have not been paid. Complaint # 2009002480 for a Quarterly Report not submitted in July 2008 and Complaint # 2009004830 for repeat survey deficiencies is outstanding and has not been paid. A license cannot be issued if there are any outstanding fines to be paid by the home health agency. The pertinent statutes and rules that apply include the following; Section 408.831 Denial, suspension, or revocation of a license, registration, certificate, or application.-- (1) In addition to any other remedies provided by law, the agency may deny each application or suspend or revoke each license, registration, or certificate of entities regulated or licensed by it: (a) Ifthe applicant, licensee, or a licensee subject to this part which shares a common controlling interest with the applicant has failed to pay all outstanding fines, liens, or overpayments assessed by final order of the agency or final order of the Centers for Medicare and Medicaid Services, not subject to further appeal, unless a repayment plan is approved by the agency; or (b) For failure to comply with any repayment plan. 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. January 24, 2010 SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Dy pet ? Ninarcd. Anne Menard, Manager Home Care Unit ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION RE: National Nursing Pool Inc CASE NO: 2010000783 ELECTION OF RIGHTS This Election of Rights form is attached to a proposed Notice of Intent to Deem Incomplete and Withdraw from Further Review of the Agency for Health Care Administration (AHCA). The title may be Notice of Intent to Deem Incomplete and Withdraw from Further Review or some other notice of intended action by AHCA. An Election of Rights must be returned by mail or by fax within 21 days of the day you receive the attached Notice of Intent to Deem Incomplete and Withdraw from Further Review or any other proposed action by AHCA. If an Election of Rights with your selected option is not received by AHCA within twenty- one (21) days from the date you received this notice of proposed action, you will have given up your right to contest the Agency’s proposed action and a final order will be issued. (Please reply using this Election of Rights form unless you, your attorney or your representative prefer to reply according to Chapter 120, Florida Statutes (2006) and Rule 28, Florida Administrative Code.) Please return your ELECTION OF RIGHTS to: Agency for Health Care Administration Attention: Agency Clerk 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Phone: (850) 922-5873 Fax: (850) 921-0158 PLEASE SELECT ONLY 1 OF THESE 3 OPTIONS: OPTION ONE (1) I admit to the allegations of facts and law contained in the Notice of Intent to Deem Incomplete and Withdraw from Further Review, or other notice of intended action by AHCA and | waive my right to object and have a hearing. I understand that by giving up my right to a hearing, a final order will be issued that adopts the proposed agency action and imposes the proposed penalty, fine or action. OPTION TWO (2) I admit to the allegations of facts contained in the Notice of Intent to Deem Incomplete and Withdraw from Further Review, or other proposed action by AHCA, but I wish to be heard at an informal proceeding (pursuant to Section 120.57(2), Florida Statutes) where I may submit testimony and written evidence to the Agency to show that the proposed administrative action is too severe or that the fine should be reduced. OPTION THREE (3)____—Ssd:s dispute the allegations of fact contained in the Notice of Intent to Deem Incomplete and Withdraw from Further Review or other proposed action by AHCA, and I request a formal hearing (pursuant to Section 120.57(1), Florida Statutes) before an Administrative Law Judge appointed by the Division of Administrative Hearings. PLEASE NOTE: Choosing OPTION THREE (3), by itself, is NOT sufficient to obtain a formal hearing. You also must file a written petition in order to obtain a formal hearing before the Division of Administrative Hearings under Subsection 120.57(1), Florida Statutes. It must be received by the Agency Clerk at the address above within 21 days of receipt of this proposed administrative action. The request for formal hearing must conform to the requirements of Rule 28- 106.201, Florida Administrative Code, which requires that it contain: 1. 2 oa 3. 4, 7. 8. The name and address of each agency affected and each agency’s file or identification number, if known; Your name, address, and telephone number, and the name, address, and telephone number of your representative or lawyer, if any; An explanation of how your substantial interests will be affected by the Agency’s proposed action; A statement of when and how you received notice of the Agency’s proposed action; A statement of all disputed issues of material fact. If there are none, you must state that there are none; A concise statement of the ultimate facts alleged, including the specific facts you contend warrant reversal or modification of the Agency’s proposed action; A statement of the specific rules or statutes you claim require reversal or modification of the Agency’s proposed action; and A statement of the relief you are secking, stating exactly what action you wish the Agency to take with respect to its proposed action. (Mediation under Section 120.573, Florida Statutes, may be available in this matter if the Agency agrees.) License type: Home Health Agency License number: 20743096 Licensee Name: National Nursing Pool Inc Contact person: Address: Name Title Street Telephone No. and number City Zip Code Fax No. Email (optional) I hereby certify that I am duly authorized to submit this Notice of Election of Rights to the Agency for Health Care Administration on behalf of the licensee referred to above. Signed: Date: Print Name: Title: STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, AHCA No.: 2010005631 v. Return Receipt Requested: 7002 2410 0001 4236 3876 NATIONAL NURSING POOL INC. d/b/a NATIONAL NURSING POOL, INC., Respondent. ADMINISTRATIVE COMPLAINT COMES NOW the State of Florida, Agency for Health Care Administration (“AHCA”), by and through the undersigned counsel, and files this administrative complaint against National Nursing, Pool Inc. d/b/a National. Nursing Pool Inc. (hereinafter “National Nursing Pool, Inc.”), pursuant to Chapter 400, Part III, and Section 120.60, Florida Statutes (2009), and herein alleges: NATURE OF THE ACTION 1. This is an action to impose an administrative fine of $6,000.00 pursuant to Section 400.484, Florida Statutes (2009), \, for the protection of public health, safety and welfare. —— - JURISDICTION AND VENUE 2. AHCA has jurisdiction pursuant to Chapter 400, Part III, Florida Statutes (2009). 3. Venue lies pursuant to Rule 28.106.207, Florida Administrative Code. PARTIES 4. AHCA is the regulatory authority responsible for licensure and enforcement of all applicable statutes and rules governing home health agencies, pursuant to Chapter 400, Part III, Florida Statutes (2009), and Chapter 59A-8 Florida Administrative Code. 5. National Nursing Pool Inc. operates a home health agency located at 1620 W. Oakland Park Blvd, Suite 302, Oakland Park, Florida 33311. National Nursing Pool Inc. is licensed as a home health agency under license number 20743096. National Nursing Pool Inc. was at all times material hereto a licensed facility under the licensing authority of AHCA and was required to comply with all applicable rules and statutes. COUNT I NATIONAL NURSING POOL INC. FAILED TO ENSURE THAT THE CLINICAL RECORD WAS AVAILABLE, ACCURATE, AND COMPLETE. SECTION 400.491, FLORIDA STATUTES (CLINICAL RECORDS STANDARDS) CLASS III. 6. AHCA xre~alleges and incorporates paragraphs {1) through (5) as if fully set forth herein. 7. National Nursing Pool Inc. was cited with one (1) Class III deficiency as a result of certification surveys conducted on March 26, 2010 and May 10, 2010. . 8. A certification. survey was conducted on March 26, 2010. Based on clinical © record -review, observation, and interview, it was determined that the Home: Health Agency (HHA) failed to ensure the clinical record was available, accurate, and complete for 5 of 11 sampled patients as evidenced by no clinical record available in the home for Patients #6 and #9; oxygen treatment not documented on the plan of care for Patient #8; medication record not available in the clinical record for Patient #4; and 3 weeks of clinical records not available for review for Patient #11. The findings include the following. 9. Patient #4 was admitted to the HHA on 02/27/10 with _ diagnoses to include cerebral palsy and quadriplegia. Review of ‘the Plan of care reveals the patient is on 5 medications. Revitw of the clinical record revealed no medication record for review documenting the medications indications for use and side effects. 10. An interview was conducted with the HHA's Assistant Director of Nursing on 03/25/10 at approximately 3:30 PM who stated he used the HHA’s Intake Information Form dated 02/22/10 to generate the plan of care but has. not got around to completing the HHA's Medication Record sheet. 11. Patient #6 was admitted to the HHA on 07/30/09 with a diagnosis of diabetes, schizophrenia, and wound to the right ankle. Review of the Physician ordered plan of care includes a Home Health Aide to visit the patient 2 times a day, 7 days a week, to assist with activities of daily living. Additionally the patient is receiving skilled nursing services 6 days a week. for wound care to the right ankle. . 12. During an in-home visit, conducted on 03/24/10 at 10:45 AM, at.the patient's home in an Assisted Living Facility (ALF), the clinical record was requested for review from the ALF Administrator and the ALF Administrator stated he has never seen a chart for this patient but. checked the shelf where all the other Home Health Agency charts were stored and was unable to locate the patient's chart. . 13. He then proceeded to check, in the ALF record and the patient's quarters but no chart was located. An.'interview was 4 conducted with. the HHA Administrator on 03/24/10 at approximately 1:00 PM and he was unable to explain why the patient did not have a chart in the ALF.- 14. The HHA Administrator during the interview on 03/24/10 at approximately 1:00 PM stated there should be a chart in the home because the patient is receiving wound care and if the nurse’s schedule changed the next nurse would have to be able to know what the treatment was. 15. Patient #8 was admitted to the HHA on 07/27/09 with diagnoses. to include failure to thrive, respiratory distress, and tracheostomy. Review of the plan of care reveals the patient is receiving skilled nursing care 16 hours a day Monday through Friday, and 12 hours on the weekend to do in part vital sign monitoring including respiratory status. 16. During a home visit, conducted on 03/25/10 at 10:50 AM accompanied by the Assistant Director of Nurses, an oxygen concentrator and oxygen was observed in the patient's room. An interview was conducted on 03/25/10 at 11:00 AM with the skilled nurse taking care of the patient who stated the patient requires oxygen at 2 liters per minute during sleeping hours with continuous oxygen saturation monitoring and she stated during the interview on 03/25/10 at 11:00 AM, the patient uses oxygen ‘prn (as needed) if the patient is having respiratory distress. 17. Review of the patient's plan of care reveals under DME (Durable Medical Equipment) and Supplies documentation of oxygen concentrator and oxygen tank. There is no evidence of documentation of amount or frequency for use. 18. Patient #9 was admitted to the HHA on 05/27/09 with a. re-certification period of 02/02/10. The principal diagnosis on the plan of care is documented as open wound and other pertinent diagnosis as paraplegia. Review of the plan of care reveals the patient is receiving Home Health Aide services 8 hours a day 7 days a week to assist with activities of daily living and a skilled nursing visit every 60 days for a complete assessment, review of medications and to reevaluate the plan of care. 19. During a home visit conducted. on 03/24/10 at 10:00 AM accompanied by the HHA Administrator and Assistant Director of Nurses the home clinical record was requested from the Home Health Aide. She stated, during an interview, on 03/24/10 at 10:00 AM that there is no chart in the home and hands in her sheets to the office. The patient stated, on 03/24/10 at 10:00 AM, during an interview, there was a chart a long time ago but s/he's not sure where it might be and the patient stated s/he did have a pressure ulcer to the buttocks area but it healed months ago. 20. An interview was- conducted ‘with the RHA Administrator on 03/24/10 at approximately 10:15 AM who stated there should be a chart in the. home so if a different Aide came in she would know what the plan of care would be. Additionally, he stated during the interview on 03/24/10 at approximately 10:15 AM, when the. nurse comes in to do an assessment they need to know if ’ there are any changes in treatment or medications. 21. Patient #11 was admitted to the HHA on 06/19/09 with diagnosis to include osteomyelitis to the right thigh requiring intravenous antibiotics 3 times daily. Review of the Physician ordered plan of care tevealed the patient was to have skilled nursing visits 2 times a day 7 days a week to take vital signs, check incision area, and check for any signs of infection; to teach patient and caregiver how to push intravenous antibiotics using sterilé technique; clean intravenous site using sterile technique and to inform the supervisor and physician of any ‘changes. 2 22. Review of the clinical record on 03/23/10 revealed no Skilled Nursing Notes available for review from 06/20/09 through 07/10/09. On 03/23/10 at approximately 2:00 PM, a request was “made to the HHA Administrator for the missing Skilled Nursing Notes for the period 06/20/09 through 07/10/09. At 5:00 PM, on 03/23/10 the HHA Administrator stated the Home Health Agency has recently gone through a staff turnover and they are still unable Bo locate the missing notes stating they may have been misfiled. - 23. An interview was conducted on 03/24/10 at 12:15 PM with the HHA Administrator who stated they are looking in storage for the missing notes. As of exit on 03/26/10 at 11:00 AM, the Skilled Nursing Notes were not forthcoming. . 24, The mandated date of correction was designated as April 25, 2010. 25. A follow-up survey was conducted on May 15, 2010. Based on record review and interview, it was determined that the Home Health Agency failed to maintain a complete and accurate clinical record for 6 of 6 sampled patients reviewed (Patient #1, #2, #3, #4, #5 and #6) as evidenced by: incomplete physician orders for oxygen for Patient #1; need for skilled care not evident for Patient #2, diet order not clarified and no evidence of documentation of BID (twice daily) HHA (Home Health Aide) visits as ordered; incomplete physician orders for Pulse Oximetry and Oxygen and an inaccurate diagnosis of Gastrostomy with lack of diet clarification for Patient #3; evidence of inaccurate HHA documentation for Patient #4; .no evidence of documentation of QID (four times daily) HHA physician visits for Patient #5 and incomplete physician's orders for Pulse Oximetry and Oxygen for Patient #6. The findings include the following. 26. Record review for Patient #1 reveals a POC dated 05/01/10 through 06/29/10 with physician's orders to include SN (Skilled Nursing) 6 hours daily. 02 (Oxygen) is listed under DME 8 ve (Durable Medical Equipment) and supplies though there is no evidence of a physician's order on the POC as to when the Oxygen is to be used, at what rate or by what means. buring an interview with the DON (Director of Nursing) on 05/10/10 at 1:15 PM, she could give no explanation. 27, Record review for Patient #2 reveals a start of care date of 01/16/09. The POC dated 03/12/10 through 05/10/10 includes physician's orders for SN twice daily to administer tube feeding and HHA (Home Health Aide) to assist with personal care needs twice daily, 7 days a week. The POC also specifies that the patient is to receive a Pure po (by mouth) diet in addition to the tube feeding. ° 28. Review of the clinical documentation reveals a caregiver teaching sheet which documents that the patient's caregiver is competent in administering the patient's tube feeding. During an interview with the DON on 05/10/10 at 1:15 PM, she was asked why a SN is needed twice daily to administer the patient's tube feeding if the caregiver is competent in the task; she responded that she does not think that the caregiver is able to administer the patient's tube feeding; she could not explain why the caregiver teaching sheet in the clinical record documents that the caregiver is competent in this task and she was asked what a "Pure po" diet is, as listed on the Pod; she - respohded that this should have been puree. 29. Further review of the HHA visit documentation reveals only 1 visit entry per day rather than the twice daily visits as ordered and the time of the visits is not documented. During the 05/10/10, 1:15 PM interview with the DON, she states that the HHA is using one visit entry to document both visits for the day; she agreed that each visit should be documented separately. 30. Record review for Patient #3 reveals a POC from 03/19/10 through 05/17/10 for SN 16 hours. daily Monday through Friday and 12 hours daily on Saturday and Sunday with physician's orders to include Tracheostomy care and administration of medications and nebulizer treatments. 31. Under DME/supplies on the POC is- listed a Pulse Oximeter and 02 concentrator and. tank. There is no evidence of a physician's order on the POC as to when the Pulse Oximeter is to be used or when the oxygen is to be used, at what rate or by what. means. This was confirmed during the 5/10/10, 1:15 PM interview with the DON. There is a diagnosis of Gastrostomy on the POC and nuteitional. requirements include Pediasure 4 cans daily. There is no evidence of documentation of a physician's order to indicate how the Pediasure is to be administered. 32. ‘During the 5/10/10, 1:15 PM, interview with the DON, she states that the patient's Gastrostomy has been closed fora while Yand the Pediasure is given by mouth and she agrees that the Gastrostomy diagnosis should have been removed from the POC. 10 Further review reveals that there is a March 2010 medication administration record in the clinical record that documents that the patient is taking medications and the Pediasure by mouth and Oxygen is administered at 2 liters per minute via trach (Tracheostomy) as needed for an Oxygen saturation level below 92%. 33. Record review for Patient #4 reveals a POC dated 04/14/10 through 06/12/10 with physician's orders for a HHA 8 hours daily Monday through Friday and 12 hours daily on Saturday and Sunday to assist the patient with personal care needs. Documentation on the POC and the medication sheet indicate that the patient takes no medications. 34. Review of the HHA visit documentation from 04/09/10 through 04/23/10 reveals indications that the HHA is just checking off boxes down the HHA visit form rather than documenting what was actually performed during the visit; ‘this is indicated by the fact that the HHA is documenting a bed bath, chair bath and shower each visit, a shave, and a pedicure each visit and a reminder to the patient to take medications each visit (there is evidence of documentation that the patient is on no medication.) This was confirmed during the. 05/10/10 1:15 PM interview with the DON. \ 35. Record review for patient #5 reveals a POC dated 04/09/10 through 06/07/10 with physician's orders for a HHA to ll assist the patient with personal care needs 4 times daily, 7 days a week. Review of the HHA visit documentation reveals only 1 visit entry per day rather than the four daily visits as ordered. 36. During the 05/10/10, 1:15 PM interview with the DON, she states that the HHA is using one visit entry to document all ‘visits for the day; she agreed that each visit should be documented separately. Continued review reveals that there is a communication note in the clinical record that the patient left for Jamaica on 04/17/10 and would be gone for 1 month. During the 05/10/10 1:15 PM interview with the DON, she was asked why the patient requires a HHA 4 x daily, if the patient is able to travel to Jamaica and she responded that the patient has never done this before and that there was some kind of family emergency. There is no evidence of documentation in the clinical record as to the reason for the patient's trip, how the patient was able to travel, who escorted the patient or how the patient's care needs would be met while away. 37. Record review for .Patient #6 reveals a POC dated 04/24/10 through 06/22/10 with physician orders for SN 24 hours daily. DME/supplies on the POC include a Pulse Oximeter and 02 _ concentrator. There is no evidence of documentation of a physician's order to specify when a pulse oximeter reading is to be done and 02 orders only specify, "as needed to maintain 02 12 saturation levels above 90%." The orders do not include the rate of oxygen administration or means. This was confirmed during the 5/10/10, 1:15 PM interview with the DON. This is an uncorrected deficiency from the survey of March 26, 2010. — 38. Based on the foregoing facts, National Nursing Pool Inc. violated Section 400.491, Florida Statutes, herein classified as an uncorrected Class III deficiency, which warrants an assessed fine of $6,000.00 pursuant to Section 400.484(2) (c), Florida Statutes. CLAIM FOR RELIEF WHEREFORE, the Agency requests the Court to order the following relief: 1. Enter a judgment in favor of the Agency for Heaith Care Administration against National Nursing Pool Inc. on Count 7 : . 2. Assess against National Nursing Pool Ine. an administrative fine of $6,000.00 on Count I for the violation cited above. 3. Assess costs related to the investigation and prosecution of this matter, if applicable. M4. Grant such other relief as the court deems is just and proper on Count I. Respondent is notified that it has a right to request an administrative hearing pursuant to Sections 120.569 and 120.57, Florida Statutes. Specific options for administrative action are set out in the attached Election of Rights. All requests for hearing shall be made to the Agency for Health Care Administration and delivered to the Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, MS #3, Tallahassee, Florida 32308. RESPONDENT IS FURTHER NOTIFIED THAT THE FAILURE TO RECEIVE A REQUEST FOR A HEARING WITHIN TWENTY-ONE (21) DAYS OF RECEIPT OF THIS COMPLAINT WILL RESULT IN AN ADMISSION OF THE FACTS ALLEGED IN THE COMPLAINT AND THE ENTRY OF A FINAL ORDER BY THE AGENCY. IF YOU WANT TO HIRE AN ATTORNEY, YOU HAVE THE RIGHT TO BE REPRESENTED BY AN ATTORNEY IN THIS MATTER Alba M. Rodrigvez,' Esq. Fla. Bar No.: 0880175 — Assistant General Counsel Agency for Health Care Administration 8350 N.W. 52 Terrace ~ #103 Miami, Florida 33166 ‘ Copies furnished to: Arlené Mayo-Davis Field Office Manager Agency for Health Care Administration 5150 Linton Blvd. ~ Suite 500 Delray Beach, Florida 33484 (U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Certified Mail, Return Receipt Requested to Administrator, National Nursing Pool Inc., 1620 W. Oakland Park Blvd. - Suite 302, Oakland Park, Florida 33311 on this 20 day of July, 2010. WLb-o) RK é Alba M. Rodrigtez, ‘Esq. neainen. ¢ U.S. Postal Service... d 3. Also complete jana é Oo Agent 3. Service Type O Certified Mal © Express Matt © Registered 2 Return Receipt for Merchandise C1 Insured Mail ~— 1. C.0.0. aah Eid eee lasaiatied (Endorsement Required) os Peat. 3331 Total Postage & Fees fd hay CERTIFIED MAIL... RECEIPT jeryis dosed Hg (Domestic Mail Onty; No Insurance Coverage Provided) dress on the reverse {1 Addressee : ® i@ card to you. 0 dack of the maiipiece, m permits. Fu P " > D. 1s delivery address different from Item 1? () Yas It YES, enter delivery address below: ©] No = . oa : a - e Retum Reclept Fee Postmark ung Pant. dae (Endorsement Required) Here : ed] FE _ Restricted Dotvery Fee ; lond Parle Tdud : > ru tu Oo Qa nw (0 Oo01 4 am y ar No20.10,. Ondedond Ya, ¥ Ps: Domestic Return Recelpt GSmin py 102595-02-M-1540 Uct 21 2019 U2:4zpm = bU13/0z9 Coatified Aricte Number 3" . , ty a, 7ob0 3903 B48 ALOE 3230 — rt ae ‘2 SENDERS RECORD # aS 0 ap Hey és Pa . . FIOROA, 5 9 fet CHARLIE CRIST ELIZABETH DUDEK GOVERNOR Better Hesith Care for all Floridians INTERIM SEGRETA fy $s 5 ; "pay iy . Yea October 3, 2010 CERTIEIED MAY a ; : ; ; _ Th) veh lip ADMINISTRATOR LICENSE NUMBER: . 20743096 NATIONAL NURSING POOL INC CASE #: 2010009639 1620 W OAKLAND PARK BLVD STE 302 OAKLAND PARK, FL 3331 NOTICE OF INTENT TO DENY The application for license renewal for Nationa! Nursing Pool Inc located at 1620 W. Oakland Park Bivd., Ste 302, Oakland Park, Fl 33311, is DENIED. The reasons for the denial is a pattem of deficient practice and individuals Who are not the owners of record attempting to renew the license of the home health agency, - The basis for this ation is pursuant to authority of 120.60 Florida Statutes (FS), 408.815 (1) (a), (hand ' (0), BS.; Section 400.474 (1) (2) (a), FS, and Section 408.807 (3) (a), F.S. which states as follows: oo 400.815 (1) (a), (€), (@), PS, (1) “in addition tothe grounds provided in authorizing statutes, : grounds that may be used by the ageocy for denying and revoking a license ..ineluds any of the following actions by a controlling interest: : : Ss . (a) False reprose tion of « material fact in the license application o orassion of any material . fact from the application. ; (c) A violation of this part, authorizing statutes, or applicable rules, (d) A demonstrated pattern of deficient performance.” 400.474 (1) (2) (a), F.S., “The agency may deny, revoke, and suspend a license and impose an administrative fine in the manner provided in chapter 120. : : : (2) Any of the following actions by a home health agency or its employee is grounds for disciplinary action by the agency: . . . (a) Violation of this part, part I.-of chapter 408, or of applicable rules.” 1. The home health agency has not demonstrated compliance with Chapter 400, Part III, F.S. and the state home health agency rules, Chapter 59A-8, F.A.C.in a combined total of four home health agency licensure and complaint surveys dating back to March of 2008,.Below are the deficiencies from the surveys which clearly demonstrate a pattem of deficient performance. : A. A survey conducted on March 11, 2008 through March 13, 2008 had three deficiencies. Non- compliance was found in the following areas: —_—_—_O ' A Cee are es 2727 Mahan Drive, MSes4 G . y Visit AHGA onilne at Tallanassee, Florida 82308 nt y ahoa.myflorida.com - Fax: . Oct 21 2010 02:420m PO14/029 National Nursing Pool Inc October 3, 2010 : H 204 The home health agency failed to conduct level 1 statewide background screening for 5 of the 8 employees sampled. The home health agency also did not have signed and notarized Affidavits of Good Moral Character for 7 of 8 employees sampled. H 302 The home health agency failed to esiablish and/or ensure the patient's plan of care was followed or that the physician Was notified thatthe plan of care could not be followed for 3 of 11 patients sampled. Included were multiple missed skilled nursing visits and multiple instances of not checking blood sugar of diabetic patients, This was a repeat deficiency. Non- compliance was found a survey in April 2005. The home health agency was fine $1,500 in 1204: The home bealth agency failed to maintain personnel files that contained signed and - . notarized Affidavits of Good Moral Character forms for 2 of 10 employees sampled. H204 is . * Tepeat deficiency from March 13, 2008: A $1,500 fine was imposed by case 2009004830. ; that a Level 1 background screen bad been requested in accordance with required time frames, Two of the files contained no evidence of a Level 1 background screening being conducted for the two new employees, ; ; . Tt should be noted that the. . C. A complaint investigation conducted on February 25,2010 found four deficiencies, one of which was a repeat deficiency from the March 13, 2008 survey. Non compliance was found: ‘in the following areas: . : : . H1302 The home health agency failed to provide the home visits withthe frequency and ; arnount of hours ordered by the physician for 4 of 9 patients sampled. When changes needed 10 be made, approve of the changes were not obtained from the physician, This was a repeat 11315 The home health agency fatled to provide staff to conduct visits according to physician's onders for 2 of 5 patients sampled. 1.320 The home health agency failed to provide the home visits with the frequency ordered. by the physician as contained in the plan of care for 4 of 9 patients sampled. #1331 The home health agency documented and billed Medicaid for additional hours of home visit care that was not ordered by the physician for 4 of 9 patients, This patiem records of these individuals contained fraudulent information with regard to the actual visits delivered. pax MEL Zt ZUlU UZ:a2pm PUD /UZYy National Nursing Pool Inc October 3, 2010 D. A home health agency licensure survey conducted on March 23-26, 2010 found five - deficiencies. In the follow up. visit conducted on May 10, 2010, one of the deficiencies was repeated and an additional new deficiency was also cited. Non compliance was found n the following areas: : : H 230 The home health agency’s registered nurse failed to ensure the physician was notified of a delay and deviation of the plan of care for 2 of 11 sampled patients, H 240 The home health agency failed to ensure RN supervisory visits were conducted for the _ home health aide for 1 of 5 sampled patients receiving home health aide visits H350 The home health agency failed to ensure the clinical record was available, accurate and complete for $ of 11 sampled patients, 11373 The home health agency's Comprehensive Emergency Management Plan did not contain how the home bealth agency would continue to provide services to patients who evacuate to special needs shelters. : #1375 The home health agency did not maintain’a current and prioritized list of patients in the event of an emergency or disaster situation. There was no information on how services ‘would be continued, what services would be provided and the patient’s medication and equipment needs In the follow up visit conducted on May 10, 2010, 1350 was uncorrected in the follow up visit and an additional deficiency H320 was cited: H 350 was uncorrected in the follow up visit conducted on May 10, 2010.Thé home health agency failed to maintain a complete and accurate clinical record for 6 of 6 sampled patients reviewed, . . H 320 The home health agency failed to ensure that the plan of care included complete Physician orders for all services required for 3 of 6 sampled patients reviewed 2. The owners of record, Kurt Joseph and Jose Urena did not apply for the renewal of the National. Narsing Pool Inc home health agency license. The proposed buyers of the house health agency, Yehia Abdelmonem and Linda Vinh submitted the upplication for renewal of the home health agency license, A change of ownership. application for this provider was deemed incomplete and _ withdrawn from further consideration on January 24, 2010, The change of ownership has not been approved by AHCA. Therefore only the owners of record can renew the home health agency The pertinent statutes and rules that apply include the following: Section 408.807 (1) through (3), Florida Statutes (.S.) - Section 400.471 (8); F.S. ‘Section 408.815 (1) (c), F.S. Section 400.474 (1)(2\a), E.S. Section 59A-8.993 (6) (a), Florida Administrative Code (F.A.C.) Section 59A-8.0086 (1) (d), A.C. - Fax: Oct 21 2010 02:42om PO16/029 National Nursing Pool Inc October 3, 2010 NAT! Pursuant to Section 120.569, F.S., you have the Tight to request an administrative hearing. In order to ; obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), BS., SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS, Anne Menard, Manag er Home Care Unit Ce: Agency Clerk, MS #3 | - Legal imake, MS #3 STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION NATIONAL NURSING POOL, INC., Petitioner, DOAH NO: = 10-1502 AHCA NO: 2010000783 vs. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. / STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, CASE NO: 10-515PH AHCANO: 2010005631 vs. NATIONAL NURSING POOL, INC., Respondent. / NATIONAL NURSING POOL, INC., Petitioner, DOAH NO: = 10-9952 AHCA NO: = 2010009639 vs. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent. / SETTLEMENT AGREEMENT State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its undersigned representatives, and National Nursing Pool, Inc. (hereinafter “National Nursing”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party.” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: EXHIBIT 2 WHEREAS, National Nursing is an applicant for a Change of Ownership for a Home Health Agency licensed pursuant to §400, Part III, Florida Statutes, and Fla. Admin. Code R. 59A-8; and WHEREAS, the Agency has jurisdiction by virtue of being the regulatory and licensing authority over Home Health Agencies, pursuant to §400, Part III, Florida Statutes; and WHEREAS, the Agency served National Nursing with a Notice of Intent to Deem Application Incomplete and Withdrawn from Further Review on or about January 24, 2010 (AHCA # 2010000783); and WHEREAS, the Agency served National Nursing Pool, Inc. with an administrative complaint on or about July 20, 2010, notifying National Nursing Pool, Inc. of its intent to impose an administrative fine in the amount of six thousand dollars ($6,000.00) (AHCA # 2010005631); and WHEREAS, the Agency served National Nursing Pool, Inc. with a Notice of Intent to Deny an application for renewal of licensure on or about October 3, 2010 (AHCA # 2010009639); and WHEREAS, National Nursing requested formal administrative proceedings by selecting Option 3 on the Election of Rights form for AHCA # 2010000783 and AHCA # 2010009639 ; and WHEREAS, National Nursing requested an informal administrative proceedings by selecting Option 2 on the Election of Rights form for AHCA # 2010005631; and WHEREAS, the parties have negotiated and agreed that the best interest of all the parties will be served by a settlement of this proceeding; and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: 1. All recitals herein are true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Upon full execution of this Agreement, National Nursing. agrees to waive any and all appeals and proceedings to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120.57(1), Florida Statutes, appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court of competent jurisdiction; and agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled, provided, however, that no agreement herein shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 4. Upon full execution of this Agreement, National Nursing agrees to pay an administrative fee of Five Hundred Dollars ($500.00) in connection with AHCA#2010009639 and an administrative fine of Six Thousand Dollars ($6,000.00) in administrative fines to the Agency in connection with AHCA# 2010005631 within thirty (30) days of the entry of the Final Order. 5. Upon full execution of this Agreement, the Agency agrees to rescind the Notice of Intent to Deny issued on October 3, 2010, and process the renewal application filed for License #20743096, which is the subject of AHCA#2010009639, and to rescind the Notice of Intent to Deem Application Incomplete and Withdrawn issued on January 24, 2010, and process the CHOW application, which is the subject of ACHA#2010000783 with an effective date of June 21, 2012. 6. Venue for any action brought to enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie in Circuit Court in Leon County, Florida. 7. By executing this Agreement National Nursing does not admit, and the Agency continues to assert, the validity of the allegations set forth in the administrative complaint and Notices of Intent referenced herein. The Agency agrees that it will not impose any further penalty against National Nursing as a result of the survey identified in the administrative complaint in AHCA#2010005631 or the Notices of Intent. However, no agreement made herein shall preclude the Agency from imposing a penalty against National Nursing for any deficiency/violation of statute or rule identified in a future survey of National Nursing which constitutes a “repeat” or “uncorrected” deficiency from surveys identified in the administrative complaint. The parties agree that in such a “repeat” or “uncorrected” case, the deficiencies from the surveys identified in the administrative complaint shall be deemed found without further proof. 8. No agreement made herein shall preclude the Agency from using the deficiencies from the surveys identified in the administrative complaint in any decision regarding licensure of National Nursing including, but not limited to, licensure for limited mental health, limited nursing services, extended congregate care, or a demonstrated pattern of deficient performance. The Agency is not precluded from using the subject events for any purpose within the jurisdiction of the Agency. Further, National Nursing Pool, Inc. acknowledges and agrees that this Agreement shall not preclude or estop any other federal, state, or local agency or office from pursuing any cause of action or taking any action, even if based on or arising from, in whole or in part, the facts raised in the administrative complaint. This agreement does not prohibit the Agency from taking action regarding National Nursing’s Medicaid provider status, conditions, requirements or contract. 9. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating the terms of this Agreement and closing the above-styled cases. 10. Each party shall bear its own costs and attorney’s fees. 11. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 12. National Nursing for itself and for its related or resulting organizations, its successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the State of Florida, Agency for Health Care Administration, and its agents, representatives, and attorneys of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, including any claims arising out of this agreement, by or on behalf of National Nursing or related facilities. 13. This Agreement is binding upon all parties herein and those identified in paragraph twelve (12) of this Agreement. 14. In the event that National Nursing was a Medicaid provider at the subject time of the occurrences alleged in the complaint herein, this settlement does not prevent the Agency from seeking Medicaid overpayments related to the subject issues or from imposing any sanctions pursuant to Rule 59G-9.070, Florida Administrative Code. 15. National Nursing. agrees that if any funds to be paid under this agreement to the Agency are not paid within thirty-one (31) days of entry of the Final Order in this matter, the Agency may deduct the amounts assessed against National Nursing in the Final Order, or any portion thereof, owed by National Nursing to the Agency from any present or future funds owed to National Nursing by the Agency, and that the Agency shall hold a lien against present and future funds owed to National Nursing by the Agency for said amounts until paid. 16. | The undersigned have read and understand this Agreement and have the authority to bind their respective principals to it. 17. This Agreement contains and incorporates the entire understandings and agreements of the parties. 18. This Agreement supersedes any prior oral or written agreements between the parties. 19. This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 20. All parties agree that a facsimile signature suffices for an original signature. THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK vosvirevig £1.25 oUbobUEbZ! BRUCK FUN URNITURE #1839 P.001/001 The following representatives hereby acknowledge that they are duly authorized to enter into this Agreement. /] YW) ! Molly MgMinstry Deputy Secretary DATED: » ov) LAKE a 6 William H. Roberts, Hsquire Deputy General Counsel Florida Bar No. 586647 DATED: eles [2 ), Carlton Enfinger, squire j Assistant General Counsel Florida Bar No,: 793450 patep:_/ 7/4 SE D L ho. mM. Aodasg Alba M. Rodriguez, Hsquire (| Assistant General Copnsel Florida Bar No. 880175 patep: _6/ |/-a// 2 Agency for Healt! Cave Administration 2727 Mahan Drive, MS #3 2 Administrator National Nursing Pool, Inc. 1620 West Oakland Blvd. Oakland Park, Florida 33311 9 vo: 6/9/ 92 orida Bar No. 97871 ~~“ Akerman Senterfitt 1 Southeast 3rd Avenue, Floor 25 Miami, Florida 33131-1700 DATED: gl hz
